Only good intentions
by Chris Mularczyk
A recent mock primary referendum held in Prudnik in the Opolskie region produced some very interesting data for pollsters and sociologists to mull over. The low turnout (27%) shows that the achieving the 50% required for the referendum to be valid will be an uphill struggle. The high support for accession (81%) indicates that large parts of the electorate are ready and willing to give the European Union a chance.
It is interesting to note the reasons why people are deciding to support the EU. The most often cited reasons are the expectation that membership in the EU will bring jobs to the country, the hope that there will be less corruption and a better judicial system and that we will enjoy better government.
The sad facts of life are that on all these accounts the voters, at least in the short and medium terms, are likely to be disappointed. The expectation that EU membership will sharply reduce unemployment is a false one. In the initial years of membership, it is more than likely that unemployment will rise as jobs in declining industries such as coal, steel and agriculture are shed. In agriculture alone it is estimated that up to one million jobs will be lost over a decade.
In truth EU membership itself cannot reduce unemployment. Only very determined economic policies targeted at reforming public finances, lowering and simplifying taxes and liberalizing labor laws could help. The fate of the economy, at least in the short term, lies in the hands of the likes of Grzegorz Kołodko and Jerzy Hausner rather than Romano Prodi and Guenter Verheugen.
Unfortunately for the country, neither Kołodko's nor Hausner's plans are likely to deliver the goods. The Kołodko plan is political suicide and will not be adopted by the government. It rightly proposes the end of indexation of pensions and benefits, simplification of income tax regulations and the scrapping of most state funds and agencies. But no party of the left will vote this through.
The Hausner package is politically more astute. It soft-pedals on state funds and agencies and keeps indexation and income tax breaks. To that it adds lower company taxation, some incentives for SME creation and development and promises to cut red tape for business. The trouble is that it just does not address the need to reform the public finances inherent in the country's accession to the EU. It ducks the key problem and therefore cannot lead to major change for the better.
The second wish of the pro-EU electorate, less corruption, is also unlikely to materialize quickly. The EU has always been about economics. Its major projects in the last two decades have been the single market and the single currency. The EU as an institution has done little to try to combat corruption in individual member states such as Greece or Italy. In the accession negotiations, it paid lip service to judicial reforms in applicant countries, but when critical reports were compiled, they were quickly shelved. The World Bank produced controversial reports on corruption here. It is interesting that the EU has not felt that this was too politically sensitive to do.
Combating corruption remains the prerogative of national governments and parliaments. How the country is doing in this respect is an interesting talking point, but not one that EU membership will have all that much influence on. At best, EU membership will at least put a cap on the number of opportunities for corrupt practices due to the application of European laws and standards. However, all of us who have been involved in EU tenders know that these procedures still leave room for mischief.
Finally, the expectation that the EU will mean better government for the country is perhaps the most naive of all. It assumes that Brussels will suddenly become responsible for governing the country. Nothing could be further from the truth. Good and bad governments are to be found throughout the member states. EU membership does impose limits through the existence of common policy areas such as a single currency and single market (positives) and the common agricultural policy (negative). And it provides certain opportunities, such as structural funds. But the way you use those limitations and opportunities depends on the ingenuity and competence of individual member state governments. There really is a world of difference between the way Greece and Ireland used their membership in the EU.
Joining the EU is a great historic moment for the country. It marks a great opportunity for future development. However, it is not a meal ticket for life. Those who do not understand that will soon be disappointed. The referendum is important, but finding the right policy mix to reform public finances and stimulate the economy is more important still.
