Businesses take government shake-up in stride

By Aleksander Nowacki

Leszek Miller's narrow victory in the parliamentary confidence vote last Friday was not wholly unexpected and it seems to have left the country's business community by and large unmoved.

"What the economy needs is clarity," said Maciej Stańczuk, president of West LB bank. "Names are unimportant, with the single exception of the president of the central bank, who is the symbol of stability, such as there is in the country."

He went on to highlight the remarkably calm reaction of the financial markets to Kołodko's resignation as a sign that no political event can surprise or worry investors in the country. What makes that reaction even more remarkable is the parting shot Kołodko fired as he stepped down.

"Moving the center of decision in the economic field away from the finance minister is nothing but a money grab," he said last Wednesday.

"The markets had priced in the danger of a higher deficit next year even before (Kołodko's remark)," said Marco Annunziata, a London-based economist at Deutsche Bank. The prognoses of more disciplined fiscal policy next year had not been given credibility by investors, he added.

"The markets no longer react to the resignation of this or that minister, nor even the whole cabinet," Stańczuk said. "They've seen it all." That indeed seems to be the general tenor of the business community's reactions.

"Looking at the markets now you'd think that we're in such shambles that nothing can surprise or upset them anymore," said Henryka Bochniarz, president of the Polish Confederation of Private Employers (PKPP). "They're so used to it, they don't even react."

The words of Wanda Rapaczynski, Agora president, can be used as the most candid summary of the situation.

"You might say that the government has become of marginal importance," she said. "And that (it) has been asking for it." Rapaczynski seemed, however, inclined to accept the result of the vote with a measure of optimism.

"Had there been a Plan B, this would have been a wholly unsatisfactory conclusion to the situation," she said. "In want of a Plan B, it's good to have got it over and done with. Now it all depends on whether (Economy, Labor and Social Policy Minister Jerzy) Hausner can get down to work quickly and come up with a workable action plan for the economy."

While a certain amount of fatalism seemed to prevail among the domestic business community, foreign commentators took a slightly more encouraging view.

"Following the referendum we feel that it (the European Union) is a far more important issue," said Martyn O'Reilly, vice chairman of the British-Polish Chamber of Commerce (BPCC). "It will drive the political situation in the right direction." He went on to say that since the referendum there has been a clear increase in the number of visits to the BPCC website.

His sentiments were echoed by Marco Annunziata.

"I don't see how the political situation, no matter how bad it gets, could offset the advantages of the referendum results," he said. "I'm sure there are some investors who are sitting on their plans right now, thinking it's not the best time to invest in Poland."

PKPP's Henryka Bochniarz struck laudatory chords when speaking of the general economic outlook.

"I admire the resilience of the private sector in this country," she said. "How can you work in this environment? Where is the economic growth, such as it is, coming from? I guess you just have to get on with it regardless (of politics) but how people manage is just astounding."

Wojciech Kozłowski, financial director at IBM, was not certain which outcome of the confidence vote would have been better.

"The government's dismissal would have caused yet another period of instability," he said. "On the other hand, with the government so deeply unpopular, its every decision gets contested. That hardly brings about stability."

Kozłowski said that until the next elections the situation would not improve. "Until then we're on a swing, not knowing what's going to hit us next," he said, adding that the current situation leads to exchange rate fluctuations.

Kozłowski also pointed out that the insecurity of decision makers brought about by the current situation has an adverse effect on the public procurement market, as officials prefer to hold back until the situation clarifies.

"What we'd like to see is clear signals coming out of the government," he said. "I'm not even asking for good news, like lower taxes, just intelligible, coherent statements."