Welfare State Classification: The Development of Central Eastern European Welfare
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| 5. Poland 5.1 Introduction In line with most CEE countries (see chapter 3), Poland reformed its social policy dramatically after the collapse of the Berlin Wall in 1989. However, the emergency measures which were adopted in order to ease the pain of the so called shock therapy quickly turned into a permanent substitute for fundamental systematic reforms (Inglot 2005: 363). The temporary safety net, which was created in December 1989 included (1) a new generous program of unemployment benefits; (2) a reformed system of public assistance for the poor; (3) the extension of early retirement rights and (4) a new pension system (Inglot 2005: 364). In Poland the period after the collapse of communism was characterized by high, often double digits, inflation. This resulted in the devaluation of most benefit payments which were granted by the temporary safety net. At the same time, wages began to grow, which resulted in an increasing gap between employees and people which depended on social welfare. Much discussion about pension reform and increased benefits for pensioners took place. Al though the public debate pointed clearly in the direction of significant reforms, one could observe procrastination and indecisiveness in the area of institutional change. This was mainly caused that many proposals of pension and old-age benefits reforms encountered opposition of the government. One of the most important proposals which was not accepted by the government was the elimination of the state monopoly on social security by the creation of several privately managed funds (Inglot 2005). As generally known, the communist regime eliminated individual social insurance accounts, which resulted in this state monopoly on social security. Hence, in the early 1990s the Polish government did not manage to imply any permanent institutional reforms. Also the parliamentary elections in the autumn of 1991 failed to bring a resolution to the indecisive process of social policy reform (Inglot 2005: 369). The right-wing government of Jan Olszewski continued to seek for new ways to reduce pension spending. Due the increase of unemployment, the fundability of the welfare state increasingly was topic of discussion. This development was also in line with the developments in most CEE countries. However, the government was not able to get the support of the parliament. One must keep in mind that these reform attempts only concentrated on temporary costs reductions; decisions concerning permanent institutional reform were procrastinated. Olsewski’s successor Suchocka announced a new timetable, which would accelerate the institutional changes, which included a staged restructuring of the whole system of social insurance benefits (Inglot 2005: 370). Finally in 1992 some reforms were accepted by both the cabinet and the parliament, which resulted among others in an increase of social insurance tax and the fact that all pension income became taxable for the first time. These fiscal reforms managed to stop the growing social expenditures, but the need for a decrease in social spending still remained high. Not only the pension system needed to be reformed, also a more effective unemployment program needed to be established. Much discussion was needed in order to establish these reforms (Inglot 2005). The above shows that the period between 1989 and 1993, the period following the collapse of communism, can be considered to be political instable. The need for reforms of the entire social benefit system was caused by high inflation and unemployment figures which were combined with disappointing economic growth. However, the reforms that have taken place within this period were mostly temporary, this mainly has to do with the fact long-term institutional reforms were accompanied with considerable political damage. Nonetheless, radical reforms of social insurance and entitlement programs were needed in order accomplish sustainable economic recovery (Inglot 2005: 372). These radical reforms thus needed to be established in the period of 1995 and 2005. 26 |