Inheritance

“There will be no end to the troubles of states, or of humanity itself, until philosophers become kings in this world, or until those we now call kings and rulers really and truly become philosophers, and political power and philosophy thus come into the same hands.” We are, alas, arguably farther from rather than nearer to Plato’s ideal than we have ever been, and I doubt we’ll be any closer when Poland’s new president, Andrzej Duda assumes office on Thursday.

Be that as it may, the omens for Duda and Poland are good. According to a recent CBOS opinion poll, 48 per cent of Poles believe that he will be a better president than outgoing Bronisław Komorowski. with 22 per cent saying he would be worse. Thirty per cent did not express an opinion. Meanwhile, the economic indicators are also good, of which more anon.

Why Komorowski unexpectedly lost the presidential election in May after has been the subject of much debate. One political scientist, Dr Hubert Horbaczewski from the University of Łódź, for example, told the Polish news agency (PAP) that Komorowski had been a “colourless figure, and also one of the more partisan presidents to date”. Which is interesting because if there is one thing Duda’s former party (the president formally has to renounce party allegiance on assuming office – no, I am not convinced either) Law and Justice (PiS) has never been short of, it is partisanship.

Much will depend on the result of the general election in October which PiS also seems likely to win. When PiS last headed the government in 2005 to 2007, under prime minister Jarosław Kaczyński, his twin brother Lech was also president (until he was killed in an air crash in 2010) and the impression they tended to give was that you were either for them or against them, the idea of being the president of all Poles, regardless of how they might have voted, appearing to take second place to partisanship.

This time around, Jarosław Kaczyński, while still party leader, is taking a less prominent role than deputy party leader Beata Szydło, PiS’s candidate to be prime minister (please see Promises) if they win. As I said on Radio Poland last week (you may listen here) the challenge for the president and the PiS government (if there is one) will be to be less divisive, to run the country for the benefit of all Poles, albeit following those particular policies on which it is elected and which, one assumes, thereby command popular support. A counsel of perfection no doubt, but one worth aiming for, not least because Poland continues to be doing quite well economically.

For example, manufacturing activity rose to a four month high in July, with accelerating orders and the highest level of export orders since early 2014. A survey by Markit Economics of 300 industrial companies showed that the manufacturing purchasing managers’ index (PMI) rose to 54.5 in July from 54.3 points in June. A PMI figure above 50 indicates expansion, below 50 contraction. Output prices also increased for the first time since June 2012.

Meanwhile, Fitch Ratings has announced that Poland’s long-term credit rating has been maintained, in foreign and the domestic currencies, at A- and A respectively. “The A- rating primarily reflects the country’s good macroeconomic performance, including sound economic policies, strong GDP growth and a stable economic and financial environment. The downsides are low GDP per capita and relatively high level of foreign debt.” GDP growth accelerated to 3.4 per cent in 2014 from 1.7 per cent a year earlier thanks to the support of domestic demand and low inflation, a falling unemployment rate and favourable monetary policy. Fitch expects that the ‘general government’ deficit will remain at 2.8 percent of GDP in 2015 and decrease to 2.5 percent in 2017.

Commenting on the parties’ election plans, Fitch believes that any fiscal loosening would be limited by the institutional framework, including rules on public debt and spending rule compliance with the criteria set by the European Union, although new taxes for specific sectors – as proposed by PiS – could have a negative impact on the business environment.

Thus the question for PiS, if it wins, is whether it can rise to the challenge or whether Poland will be as the son in Machiavelli’s dictum: “A son can bear with equanimity the loss of his father, but the loss of his inheritance may drive him to despair.”

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