Polish Defiance Could Help Re-boot European Union

We’ve just seen history made in Poland. Following last week’s Parliamentary elections, a single party is now in power for the first time since the 1989 communist collapse. According to most Western analysts, though, it’s the wrong party.

To many UK citizens, Poland is significant mainly as a source of courageous Second World War fighter pilots or modern-day au pairs and plumbers. There are now well over half a million relatively recent Polish immigrants living here – making them the third-biggest migrant group after the Irish and Indians.

Annual net UK immigration just hit a record 330,000, shattering David Cameron’s already broken pledge to reduce this contentious figure “to the tens of thousands”. New projections from the Office for National Statistics show the British population set to balloon from 64.6m in mid-2014 to 74.3m by 2039. Many Brits (despite our natural tolerance) are alarmed at the pace and scale of current immigration and, as a result, have a prickly attitude towards East European countries now in the European Union.

Since joining the EU in 2004, many have taken the opportunity to travel from Poland, Hungary, Slovakia and the Czech Republic to live and work in the UK – as have numerous Romanians and Bulgarians since their countries became members in 2007. Little wonder. Average per capita incomes in Romania, Bulgaria and even Poland remain at less than 40pc of the EU average. Unless there’s a drastic policy change, or Europe’s wealthier economies endure a cataclysmic collapse, high East-to-West migration will continue – including many Poles.

Beyond all that, though, Poland is Eastern Europe’s largest economy and a Nato member – making it a significant diplomatic player. The country warrants attention beyond its role as a source of migrant labour here in the UK. Poland’s GDP weighs in at around $550bn (£340bn) – similar to Sweden. Home to 37m people, the country is easily America’s most important ally among the former Soviet bloc.

It’s worth grasping, then, that Poland has just experienced an electoral earthquake. Warsaw now has, I’ve often read in recent days, “the most right-wing Parliament in Europe”. The new Polish government, more significantly in my view, has a spikey attitude towards Brussels – which could impact the UK’s attempts to alter our relationship with the EU.

Having lost power in 2007, Poland’s Law & Justice took a decisive 37.6pc of the vote in last Sunday’s election, soundly defeating the incumbent Civic Platform – which won just 24.1pc. Following the victory in the May Presidential election of Andrzej Duda, also running on a Law & Justice ticket, the party is now almost as powerful as it’s possible to be under the Polish electoral system.

Controlling 235 of the 460 seats in the Lower House of Poland’s Parliament, the new government doesn’t command the two-thirds Parliamentary majority required to alter the constitution. Given its natural affinity with some of the smaller parties, though – including a 42-seat group led by rightwing rock star Pawel Kukiz – such political drama cannot be ruled out.

Why did Poles vote so decisively for a change of government given that the economy has been doing so well? Between 1991 and 2008, Polish income per capita grew, on average and after inflation, by 4.6pc a year. The post-crisis performance, though, has arguably been even more impressive. Poland is the only sizeable EU economy, since the collapse, to have avoided recession. From 2008 onward, under Civic Platform, real per capita income has continued to rise by another 2.7pc per annum.

Even last year, despite external headwinds, not least the Russia-Ukraine conflict, Poland grew by 3.4pc – making it Europe’s fastest-growing economy. Rising disposable incomes have kept consumer sentiment buoyant, with unemployment falling below 10pc for the first time in two decades. Civic platform even managed to narrow Poland’s budget deficit – from 8pc to less than 3pc of GDP.

Yet this centre-right party is now out on its ear, trounced by a group supported, until recently, mainly by older, less educated voters from smaller towns. And now Law & Justice has a mandate unmatched in 26 years of post-Communist Polish democracy.

One reason is that Civic Platform are widely viewed as complacent and scandal-ridden. Many youngsters, in particular, felt they weren’t benefitting from Poland’s economic growth. Duda became President in May largely because the Civic Platform candidate, who began as favourite, ran a lax campaign with the air of someone sure of victory. After that, Law & Justice – and, above all, their wily veteran leader Jarosław Kaczyński – began to tap into the natural social conservatism of this overwhelmingly Catholic country.

In policy terms, despite being “right-wing”, Law & Justice is actually rather statist, so will significantly loosen fiscal policy. Ratings agency Standard & Poor’s have stated that “measures planned [by the party] could dampen investor confidence” – not least proposals drastically to lower state pension ages. Kaczyński also campaigned on a six-year cheap lending programme which many economists view as detrimental to the independence of Poland’s central bank.

Tapping into a populist vein, Law & Justice has vowed higher taxes on large corporations while doing more to help smaller Polish businesses and families. There’s also been a soft nationalist element to the party’s campaigning, including punitive taxes on banks and supermarkets, many of which are foreign-owned.

Western hawks may be reassured that Kaczyński has pledged to raise Poland’s defence spending from under 2pc to over 2.5pc of GDP, while displaying a fierce animosity towards Russia. Kaczyński has stated, in fact, that he believes Moscow was behind a 2010 plane crash in which his identical twin brother, then President Lech Kaczyński, perished along with many other top Polish politicians.

Frosty relations with Russia, though, don’t make Kaczyński the West’s man. Law & Justice stands, above all, for the independence and dignity of a sovereign Poland. Which brings us to the crucial issue of Europe. For well over a decade, Poland has been Eastern Europe’s most pro-EU country. Donald Tusk, Co-Founder of Civic Platform and Polish Prime Minister for seven years until 2014, is now ensconced as President of the European Council.

Kaczyński, in stark contrast, used Europe’s migrant crisis during this election campaign rhetorically to reconfigure his country’s relationship with Brussels. Having previously accused Germany of wanting to annexe part of Poland, he described Middle Eastern migrants as “disease ridden”. Mindful of the strong reaction he provokes, Kaczyński will stay in the shadows, having just appointed the rather more telegenice Beata Sidlow as Prime Minister. There is every chance, though, that under his influence, she could soon reverse Poland’s commitment to admit 7,000 migrants under the EU’s emergency relocation strategy.

Whether migration is the flashpoint, or EU environmental rules given Poland’s still heavy dependence on coal, Warsaw is heading for a high-profile clash with Brussels. That could influence the context in which the UK negotiates on EU membership – particularly if other typically pro-EU countries follow Poland’s example and start to show less deference.

Law & Justice won’t like any demand from Cameron to limit or delay benefit payments to EU citizens newly-arrived in the UK – as that would clearly harm some Poles. But Kaczyński will certainly welcome calls from London for more radical thinking, including treaty-change to move away from “ever closer union”. And, if even plucky Poland is now suspicious of the “European Project”, demanding back more sovereignty, that could spark similar demands from other electorates and, in turn, their governments.

Thus would Brussels’ resolve be weakened, allowing the UK to lead the charge to an EU that is looser, less federalist and, ultimately, far more legitimate and likely to survive.

http://www.telegraph.co.uk/finance/economics/11967734/Fresh-defiance-from-Poland-could-help-us-reboot-the-European-Union.html

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