How the people of Poland are kept from taking to the streets

While Poland loves to boast about westerners coming to earn money, it is less open about those from the eastern part of the continent. Propaganda serves to justify almost anything.

Anyone who wants to learn about the current economic situation in Poland will encounter curiously contradictory accounts. In the Polish mainstream media, only one image emerges: Poland has growth, has avoided the financial crisis and is up to its ears with new investment, of which the tacky skyscrapers rising up in Warsaw are proof.

Take a closer look – the investment was mostly in roads and stadiums for the Euro 2012 football championship which are now mostly unused and loss-making, while schools, libraries and school canteens are being closed. Health care is free only in theory – if you can’t pay the monthly insurance or are on benefits, it is restricted or has to be paid for. Donald Tusk and his neoliberal party, Civic Platform, have raised the pension age from 65 to 67 and recently, “to fight the crisis”, abolished the eight-hour working day. Last but not least, if it was a prospering country would two million of its people be economic emigrants?

It is true that so far Poland has introduced few overt austerity measures, benefiting from a strong industrial base closely connected to Germany, EU investment and less “financialisation” than, say, the Baltic states. However, if Poland were a land of milk and honey, the migrants would be returning after raising some money. They aren’t. So, instead, the Polish press runs frequent articles bemoaning how Spaniards, Portuguese and other citizens of crisis-ridden European countries are coming to the country to get a job – although the numbers are tiny compared to the volume of those emigrating.

While Poland loves to boast about westerners coming to earn money, it is less open about those from the eastern part of the continent: Roma, Chechens and Ukrainians are treated as second-class citizens. In Białystok, in north-eastern Poland, violent attacks on Roma camps and houses are common. A recent court case ruled that the swastika, written on the city walls and worn by neo-fascists, is legal because “it’s a famous Asian symbol of happiness”.

If the right has radicalised since the Smolensk plane crash, which killed 93 officials, including the president and many MPs, then the left is in a state of decrepitude. A “tenants’ movement” fights the evictions that blight the country and there was a very small Occupy movement. At a recent “congress of the left”, there was talk of “learning from the right” and an “alliance with the middle classes”. Yet the only large party of the left, the Democratic Left Alliance, formed by the ex-communist nomenklatura and the governing party in the 1990s and early 2000s, was reduced to 8.24 per cent of the vote in the last election. Even the recent self-immolation of a 56-year-old man in front of the prime minister’s office in protest against his and many others’ impoverishment didn’t especially shake the public. Nor did his subsequent death.

What has? When public transport fares in Warsaw went up by 60 per cent, there were protests and a petition demanding the resignation of the city’s Civic Platform mayor, Hanna Gronkiewicz-Waltz. But Poland is not yet taking a cue from the Brazilian protests – which, with their focus on hikes in transport fares and the costs of hosting the World Cup, resemble the problems Poland had after Euro 2012.

Here in Poland, propaganda serves to justify almost anything Civic Platform does – especially as we are ritually menaced with the possible comeback of the Law and Justice party. Split between neoliberals and rightwing populists, the people of Poland are successfully kept from taking to the streets.

The Warsaw skyline. Photograph: Getty Images

Agata Pyzik is a Polish writer publishing in Polish and English in many publications in the UK and in Poland, including the Guardian, Frieze and The Wire. Her main interest is (post) communist Eastern Europe, its history, society, art. She's finishing a book on postcommunism called Poor But Sexy for Zero Books. She lives in London and has a blog.

This article first appeared in the 08 July 2013 issue of the New Statesman, The world takes sides

Getty
Show Hide image

Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation