Sunday, February 22, 2009

Buddy, can you spare a grosz?

Solutions put forward to stave off the worst of the global financial meltdown - now knocking angrily at the door in Poland, like some aggressive and impatient Repo Man - have split into good old fashioned rightwing and leftwing remedies. But are they all missing the point?

The deliciously named Moody ratings agency alarmed everyone last week when they published a rather moody warning that they might downgrade credit ratings of Western banks active in central and eastern Europe (CEE). Austrian banks are particularly heavily exposed after lending the region 230 billion euros, the equivalent of 70 percent of Austria’s annual GDP. If the banks went tits up in this region they could take down many of their parent banks in the West. As manager of Manchester United, Alex Ferguson once said: “It‘s squeaky bum time,” for bankers everywhere.

The zloty has sunk against major currencies over recent weeks faster than a man with a skyscraper-load of concrete in his boots. The majority of mortgages in Poland, as elsewhere in the CEE are taken out in foreign currencies. Our flat is on a euro mortgage and repayments have risen by 15 percent since last November. The majority took their loan out in Swiss francs, a plan that now looks like it had more holes in it than Emmental cheese.

After initially seeming to be getting away with it, many central and eastern European countries are now forming an orderly queue outside the doors of the World’s bank manager, the IMF, for help. Ukraine, Hungary, Belarus… There is a plan on hold for Poland, if needed.

Each month macro economic analysts sit down and key new data into computer models, press ‘send’ and watch as the screen flickers up yet another GDP growth prediction that is even more gloomy than last month’s. The government thinks maybe 2.5 percent for 2009; the World Bank this week said two percent, most independent analysts are even more moody: one percent, maybe no percent.

CEE countries inside the EU who are in the Euro Zone - Slovenia, Slovakia… - are best placed to see out the recession. Those in the EU but outside of the Euro Zone - Poland, most of them - will have a harder time but should get some protection from Brussels. Those in the CEE but outside the EU, however, appear stuffed.

The government in Warsaw looks as shocked as everyone, these days, at the pace of it all. One minister said this week that they had tried to play things down initially, because they “didn’t want to worry people.” But now the government has scrambled a package together to try and steady the ship, a bit.

Prime Minister Tusk said that if the zloty falls to 5 to the euro then his government would intervene. The day after, when the zloty didn’t fall quite that low, the finance ministry started selling euros anyway.

The pro-EU Civic Platform government have emphasised that getting into the ERM-2 mechanism as quickly as possible would help protect the zloty from such instability (although it didn’t help the pound much in the early 1990s). May or June seems to the target date.

The government has a four point strategy, apparently - bills on bank bailouts, on equity for national trading bank Bank Gospodarstwa Krajowego, on credit guarantees for businesses, and on tax relief for direct investors.

“I‘m no Obama”

But Donald Tusk warned that there would be “no massive injections” of cash into the economy. Tusk said that he was “No Obama” - as if people hadn’t actually noticed this before.

And here politicians in Poland are falling into two camps, much like the old left and right days. On the right, Donald Tusk - but in the left hand corner is Jaroslaw Kaczynski, calling for a programme of public works - a la Maynard Keynes - to protect jobs and stimulate the economy.

It’s no surprise Kaczynski is on the state borrowing and spending side of the equation. For all the emphasis on his social conservatism, he and Law and Justice have always been left on the economic front. Law and Justice, the conservative-socialists!

The World Bank report was actually much less gloomy than most. It said Poland would ride out the storm better than many in the region. But it’s still going to be rough, though not the Great Depression. There are no precedents to this. It’s something new.

And that makes me think that all the bailouts and other sticking plasters aren’t really coming to terms with what is behind this: an over producing but under consuming south Asia, and an over consuming, under producing West. This is about fundamental imbalances. But nobody seems to have a plan about that.

Saturday, February 21, 2009

Friday quiz (on a Saturday)

Q: What have former President of the Republic of Poland, Aleksander Kwasniewski (he's the one below) and World’s Most Wanted, Super Terrorist, Uber-Weird Beard and Cave Dweller, Osama bin Laden got it in common?

Answer: They are both fans of Arsenal FC!

Kwasniewski used to work in a pub opposite the old Arsenal football ground in north London and ended up going to see ‘the Gunners’ often.

Osama bin Laden was also a keen follower of Arsenal when he was in London in the 1990s. In fact, after 9/11 the club actually put him on the banned list of unwelcome spectators - like some Super Hooligan! Quite why he supported that particular club and not, say, Queen’s Park Rangers, Fulham, Chelsea or West Ham is probably down to him having the misconception that he could rearm the Muhadjeen via the Arsenal.

Tuesday, February 17, 2009

Normal service will be resumed soon

Just a bit knackered…

Monday, February 09, 2009

Brutal Taliban beheading shocks Poland

“And we were so close to getting him released…,” said Foreign Minister Radek Sikorski, after confirming that Piotr Stanczak, the Polish engineer kidnapped four months ago in Pakistan, had been beheaded by the Taliban.

The now expected grisly video of the moment of death is being circulated on the internet adding to the utter horror that this type of story produces.

What’s worse, the voice of Stanczak appears calm on the video - it seems certain that he was presuming that he would soon be freed. He was just reading out a text that the Taliban had prepared for him: Poland to get out of Afghanistan; prisoners must be released…the usual stuff. They had let him shave and had given him back his normal clothes. It’s not the voice of someone who thinks they are about to die - in a most disgusting way - in only a few seconds time.

The recriminations have started: did the Polish government, the Pakistani government, do enough to get him freed? Prime Minister Tusk said over the weekend that they had never any intention to pay the ransom fee that the Taliban were demanding. But they certainly were in close contact with Pakistani special services who did have contact with the Taliban. How would Sikorski be so certain that they were so close to securing Piotr’s release?

I got a couple of nice emails at work today from Pakistanis saying how sorry they were about what happened to “Mr. Peter”, as he became known in the media over there. And I don’t think anyone in Poland blames Pakistanis for Stanczak’s death - only the deeply medieval and alienating Taliban - people who appear so brutal and not-of-this-world they may as well be aliens from Planet Weird Beard.

There will be questions of what, exactly, is Poland doing mixed up in this war, launched as part of Bush’s War on Terror. Obama has refused to use those words consecutively, but he seems even more keen than his predecessor to get sucked in, ever deeper. Is this sort of intervention ever constructive? Can you bomb and occupy a country out of the stone age? Were the Taliban so upset when the US invaded Afghanistan? Did the region become more stable as a result?

Is the Pope a Muslim?

The video is here - warning - I have not watched this all the way through - I just can’t look at this kind of thing - so I don’t know if this is the shorter version - which spares us the details - or the longer version, which doesn’t.

Monday, February 02, 2009

Make PiS, not War!

Is the leader of Law and Justice (PiS) Jaroslaw Kaczynski turning into a peace-loving hippy?

At the party’s congress at the weekend he said that Polish politics must end the squabbling that has so characterised it since 1989 and that it was time for the government and his party to “Make peace… Poles want peace.” Observers are wondering if Kaczynski has not been rollin’ and smokin’ a little too much wacky-backy, lately.

The party congress was part of a new initiative by Kaczynski to change Law and Justice’s image. And it needs to - recent poll results put PiS twenty percent or more behind Prime Minister Donald Tusk’s Civic Platform. So, whereas focus groups have been telling him that he and Law and Justice are seen as conflictual and aggressive, Jaroslaw and his merry band are now presenting themselves as people of reason, of consensus, of peace. A bit like...Barack Obama, perhaps?

But can Jaroslaw keep it up? He has been picking fights with communists, liberals, old colleagues from the Solidarity movement - and who knows; maybe even his pet cat? - for most of his life. So will the new Man of Peace image sit easily with him? Well, already he is struggling. Jaroslaw only gets out of bed in the morning to pick a few fights.

Prime Minister Tusk - who wants a cross party consensus on ways to fight the little spot of economic bother that Poland is now in, along with the rest of Planet Earth - wanted to turn up to the party congress and say a few soothing, almost presidential words a la Obama… “Now is the time when all Poles should come together...etc,” to the PiS party faithful. But Kaczynski refused to invite him to the congress, only to a side meeting after it was all over. “Civic Platform never asked me to one of their congresses,” grumbled Kaczynski today, slipping back into the old bruiser routine he does so well. “If the government wants cooperation then they have to get rid of all their propagandists…”, he spat, referring to Civic Platform’s much talked about PR machine and maybe even alluding to Janusz Palikot, who anoounced, yet again via his blog, that he was at the congress “in cognito” - although how anyone with his hair style can be “undercover” anywhere except at a blind old people’s home, is anyone’s guess.

But perhaps Jaroslaw has changed? Maybe old dogs can learn new tricks and old leopards can change their spots? Maybe his conversion to the ways of peace - a kind of Polish Dalai Lama - happened when he disappeared from the political limelight and media for more than a couple of months last year. But where did he go? Maybe to San Francisco’s Haight-Ashbury to hang out with what is left of the Grateful Dead and the rest of the flower power children generation, to toke on a few spliffs and wind daisy chains around the toes of Vladimir Putin…