Inflation, Policy, and the Call for Depoliticization in Poland
Independent polls suggest inflation will ease, yet it will remain higher than in many Western European nations. In 2018, Poland enjoyed an inflation rate below 2 percent. This observation comes from an RMF FM interview with Prof. Leszek Balcerowicz, a renowned economist who led the National Bank of Poland and served as Finance Minister.
In the RMF FM interview, Balcerowicz noted that while inflation is rising in many countries, the differences between nations matter most. He attributed the increase in Poland partly to the war on our eastern border, yet he observed that Poland’s inflation rate was still higher than Western Europe’s.
Depoliticization
Balcerowicz pointed to concrete contrasts: in Switzerland inflation sits around 2.5 percent, in the United States roughly 5 percent, while Poland approaches 15 percent. He stressed that Poland saw price pressures grow at a time when Western economies did not, a period marked by turmoil connected to Russia’s aggression against Ukraine. He added that Putin cannot be blamed for Poland’s inflation climbing above western levels.
The interview also highlighted the difficulty in comparing distant European experiences with the current Polish situation near Ukraine’s border. Balcerowicz expressed frustration about the challenges in explaining these comparisons clearly.
When asked about the Polish central bank’s leadership and policies, Balcerowicz offered his longstanding critiques of social spending and state responsibility for cohesion. He drew comparisons between the PiS government and the former People’s Republic of Poland and discussed proposals for nationalizing segments of the economy.
The core criterion, according to Balcerowicz, is economic stability. He described the budget’s deteriorating state due to rising spending, especially on social programs, a growing deficit, and higher debt-service costs. He argued that substantive judgments must consider how political choices influence the economy and the cost of those choices. He criticized the increased role of politicians in the economy, citing nationalization and the perception that the current government parallels earlier socialist-era policies.
Balcerowicz called for depoliticizing state-owned enterprises to curb political influence over economic processes in Poland. He warned that concentrated political power harms the economy and suggested civil shareholding as a pathway to limit state control, helping prevent a slide toward socialism.
Regarding Balcerowicz’s long-standing proposals, he urged opposition forces to reduce the state’s role in the Polish economy and to limit social transfers. He argued that strategic sectors should remain free from government control, pointing to the United States as a model where critical industries like defense are not state-owned. Privatization and rapid consolidation were emphasized as part of a broader economic reform agenda. He also hinted at his political plans, noting an intention to participate in upcoming elections and to publicly clarify his stance as electoral developments unfold.
Policy Dilemmas
Balcerowicz argued that citizens deserve clarity about social transfer policies and the aims behind them. He contended that such expenditures can restrict public sector wage growth and increase debt. He described himself as a liberal, open to reallocating resources across sectors, while acknowledging past reservations about that approach. He urged politicians to present voters with transparent trade-offs, stating that every promise carries a cost and that voters deserve a clear account of how proposals will be financed.
As fiscal pressures rise, Balcerowicz warned that higher taxes and expanded spending contribute to a larger deficit and rising costs of debt service. He insisted that whoever governs must face these realities rather than dodge them, because economic truth tends to catch up with policy choices.
Housing Policy and Focused Realism
Balcerowicz commented on the political focus on housing policy, arguing that state interference in the real estate market often leads to socialist outcomes. He criticized proposals from leading political figures as potentially aimed at attracting voters rather than solving underlying problems. He cautioned that financing and distributing housing through expansive state intervention would be inappropriate from a liberal, market-based perspective.
Reflecting on his own role in the early 1990s, Balcerowicz recalled a period of financial crisis that necessitated rapid debt reduction and a move toward depoliticizing the economy. He argued that a quicker depoliticization would have been beneficial and emphasized the importance of preserving fiscal discipline for future generations.
In summary, Balcerowicz emphasized that the path forward requires honest economic diagnosis, clear public costs for policy promises, and a commitment to reducing state interference in the economy. He urged voters and policymakers to prioritize sustainable growth, prudent budgeting, and structural reforms that limit political influence over critical economic sectors.