Analysis: Can Poland weather the crisis?

Jerzy Buzek (left) and Bronislaw Geremek: No longer partners

By Jan Repa

Poland's governing centre-right coalition has collapsed after the departure of the junior coalition partner, the Freedom Union.

Prime Minister Jerzy Buzek, of the Solidarity bloc, says he will try to continue at the head of a minority government.

The government crisis comes at a particularly sensitive time in Poland's membership negotiations with the European Union - the outcome of which could affect a number of other candidate countries.

Solidarity leader Marian Krzaklewski: Goal remains EU membership

The Solidarity-Freedom Union coalition has been running Poland since the last parliamentary elections in 1997.

Uneasy relationship

The largest of the former Soviet client states, Poland has continued its Westward course, joining Nato last year and continuing a rapid economic growth which began seven years ago.

But increased prosperity for some has coincided with job losses and uncertainty for others, especially in heavy industry and the farming sector.

While the Freedom Union has pushed for radical "pro-enterprise" reforms, the Solidarity bloc - itself a coalition of over 30 groups including trade unionists and right-wing Catholics - has taken a more "socially protective" line.

The relationship was never an easy one, with many personality clashes and policy differences.

Continuing policy objectives

Two weeks ago, the Freedom Union announced it intended to pull out its five ministers.

After more political brinkmanship, during which the Freedom Union demanded Prime Minister Buzek's replacement and a promise of greater "discipline" among the Solidarity MPs, the Freedom Union finally confirmed it was leaving the coalition on Tuesday.

In particular, this means the departure of two key ministers widely respected in the West: the Finance Minister and Freedom Union leader Leszek Balcerowicz; and Foreign Minister Bronislaw Geremek.

The coalition collapse need not entail a crisis of credibility for Poland in Brussels and the major Western capitals. Prime Minister Buzek has said his minority Solidarity government will continue the same major policy objectives as before.

EU goal

Both the Freedom Union and the main opposition party, the ex-communist Democratic Left Alliance, have offered to support the government in parliament on an ad-hoc basis.

All three political groups say the main goal remains membership of the European Union.

However, Solidarity has already said it intends to prepare what is called a "realistic" budget, which would take into account "both social and economic needs".

This sounds like a promise to relax the financial austerity which has been the hallmark of Mr Balcerowicz's policies.

The one big cloud on Poland's otherwise sunny economic outlook has been a growing balance of payments deficit, which Mr Balcerowicz pledged to reduce through curbs on public spending.

Real test

If Solidarity embarks on a spending spree, the Freedom Union and the Democratic Left Alliance could combine to reject next year's budget, precipitating early elections - which, on present opinion poll ratings, the Democratic Left Alliance would win.

Already some Polish commentators are suggesting that Mr Balcerowicz has acted hastily.

If his aim was frighten the Solidarity bloc into backing his policies and imposing tighter discipline on its own maverick factions, then that goal is probably less achievable now than when the Freedom Union was in government.

So far, financial markets and the Warsaw stock exchange have reacted calmly.

There is a feeling that Poland's economic recovery is probably sufficiently well grounded by now to weather the occasional government crisis.

If the Democratic Left Alliance does return to power in the next elections, there are unlikely to be major policy changes. After all, the ex-communists made a reasonable job of it when they were last in power between 1993 and 1997.

The real test will probably come over the next few months - especially as the EU is about to open the two most difficult "chapters" in the negotiation process - those on farming and the free movement of labour.

EU officials have suggested recently that Poland, by virtue of its size and geographical location, is the key country in the enlargement process.

That could be bad news for other front-runners such as Hungary and the Czech Republic.