One more chance?
Most Polish governmental crises have a habit of catching observers unawares. But in the case of the latest conflict, which many see as the most serious since the creation of Prime Minister Jerzy Buzek's government two years ago, it was clear for some time that the issue of tax reform was the one that Deputy Prime Minister and Finance Minister Leszek Balcerowicz had set his credibility on. What few expected to see was the degree to which this crisis could go right down to the wire; and at this time of writing, it remains unclear what the final outcome will be.
To recap, earlier this year Balcerowicz thought he had a deal cut with both Marian Krzaklewski as leader of Solidarity Election Action (AWS) and Buzek that the entire coalition would support a tax reform proposal that Balcerowicz sees as the cornerstone of sound finances over the next few years. The proposal then agreed to by the government, involved legislation that would reduce personal and corporate tax rates over the next two years, as well as introduce other reforms, mainly in the field of removal of various tax allowances. Yet as summer turned to autumn, it became clear that Parliament was not in a mood to hurry with the proposal, despite the fact that under the Constitution, tax legislative changes have to be signed into law by the president by the end of November if they are to be valid in the next calendar year. Almost everyone took their eye off the ball, and suddenly it became clear that the timetable might not be met. To make matters worse, many AWS deputies started to balk at the proposal itself, ignoring the fact that it was their own government that had proposed them.
Last week, Balcerowicz threatened the use of the political doomsday weapon: his own resignation. He has intimated at this before over other rows, but this time insiders have made it clear that this was no bluff: no tax reform, no Balcerowicz. But if Balcerowicz were to resign, does that also mean no Buzek government? A closer examination of events last week shows that support for Balcerowicz's own stance in the Freedom Union (UW), AWS's coalition partner, may be weaker than many think.
First, Balcerowicz last week was determined to make a stand on the basis of the Finance Ministry's initial proposals that had been the basis of the government's legislation, made a public statement to that effect, and called a special meeting of the leadership of the UW to sanction his position. Then a change: after the party meeting Balcerowicz kept a low profile, and it was left to other UW members, such as party secretary Miroslaw Czech, or parliamentary faction leader Jerzy Wierchowicz, to make conciliatory statements over the possibility of a compromise with AWS. Both Czech and Wierchowicz are known as being skeptical of Balcerowicz's authoritarian leadership style inside the party, and in the past have been resistant to what they perceive as Balcerowicz's tendency to turn his party into an arm of the Finance Ministry at the cost of other UW interests.
More resistance to Balcerowicz within the Freedom Union was evinced with the position taken by UW members of the Finance Committee itself. Balcerowicz had tried to conflate the committee's foot-dragging with AWS machinations, but this line of attack was undermined when it turned out that it was precisely senior UW committee members, such as Halina Goralska, who were lining up to resist the Finance Ministry's attempts at railroading reform through. Goralska and other UW deputies publicly resisted what they saw as a move to prevent discussion over a "flawed" tax bill, and one which moreover proposed changes that they saw as damaging UW support among the electorate. Ominously for Balcerowicz, it is Goralska who has been nominated as the UW's chief negotiator with AWS in hammering out a last-minute compromise deal.
The final piece of evidence that Balcerowicz may be more isolated than many believe was his cryptic comment last week that while he was prepared to leave the government, he would "in no way pressure his party to do likewise." That again reflects the resistance in the upper echelons of the UW to causing the downfall of the Buzek government at a time when opinion polls are showing that snap elections would lead to a probable annihilation of not only AWS, but also UW. If push comes to shove, many in the UW would be prepared to remain in government, even if Balcerowicz leaves.
Of course, in the long run this raises crucial questions about Balcerowicz's own future. He is a proud man, and quite prepared to leave the government if he feels that he is merely being used as a front man for policies with which he does not agree. But he may also end up leaving his party behind too. Already, there is swelling of organized opposition to him in the UW that may well mature into an attempt to elect a different leader at the UW Party Congress in spring next year. It may well be that Leszek Balcerowicz's resignation if it comes will cause more problems for UW than it will for Buzek's government.
Marek Matraszek is the Warsaw director of CEC Government Relations. He can be e-mailed at director@cec.com.pl
