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The Warsaw Voice » Other » November 5, 2008
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The big change
November 5, 2008   
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The Round Table
The Round Table talks between the government and the opposition, unprecedented in the history of the communist countries, began Feb. 6, 1989 and ended April 5. They were held in several locations, but began and ended at the Council of Ministers Office at the Namiestnikowski Palace in Warsaw. In all, 452 people took part in the sessions. The idea to hold talks between the communist authorities and the opposition had emerged a few years earlier, but the idea of the Round Table was first formulated on Aug. 31, 1988 during a meeting between the minister of internal affairs, Gen. Czesław Kiszczak, and Lech Wałęsa. The talks were to be held on condition that there would be a halt to the wave of strikes sweeping the country that were organized by Solidarity.

The negotiations were held among three main teams: for the economy and social policy, for political reform and for trade union pluralism. The ultimate results of the talks included changes to the Polish parliament: the formation of a Senate with 100 senators chosen in absolutely free elections (two senators from each province, three each in Warsaw and Katowice provinces), and elections to the Sejm, the lower house of parliament, in which 65 percent of the seats (299) were to be guaranteed for the Polish United Workers' Party (PZPR, the communist party); its satellite parties, the United Peasants' Party (ZSL) and the Democratic Party (SD); and the procommunist Catholic organizations: the PAX Association, the Christian Social Union and the Polish Catholic Social Union. Thirty-five percent of the mandates (161 seats) could be contested by the opposition. The office of President of People's Poland was established, to be elected by the National Assembly to a six-year term. The law on associations was to be amended, allowing Solidarity to be registered.

The opposition was to be given access to the media, both audiovisual-programs on public television, TVP-and print. Tygodnik Solidarno¶ć weekly, which had been published in 1980-1981, was reactivated. Finally, the "Position on social and economic policy and system reforms" was adopted-though this gave few specifics regarding economic reform.

The June 4, 1989 elections
The 1989 elections marked the biggest flurry of political activity in Poland in two decades. The turnout in the first round on June 4 was 62 percent, a result that has not been repeated in any subsequent parliamentary, presidential or local government elections or any nationwide referendum. The elections were a huge success for Solidarity: just 40 percent of voters chose other candidates than those put forward by the Solidarity Civic Committee. Of 161 possible seats in the Sejm, Solidarity won 160 in the first round, as well as 92 seats in the 100-member Senate. The "national list," which was meant to assure Sejm seats for PZPR leaders, was virtually ignored, with two exceptions.

In the second round on June 18, which had government-backed candidates vying for 294 of the 295 unfilled Sejm seats, the voter turnout was much smaller, about 25 percent. The Solidarity Civic Committee won the final free seat in the Sejm contested by the opposition.

In the elections to the Senate, Solidarity won 99 seats out of 100 (92 in the first round, seven in the second). The only senator not linked to Solidarity was businessman Henryk Stokłosa.

On July 4, 1989, Mikołaj Kozakiewicz from the ZSL was elected speaker of the Sejm, and Andrzej Stelmachowski of the Citizens' Parliamentary Club (OKP) became Speaker of the Senate.

On July 19, 1989, the People's Poland National Assembly elected Gen. Wojciech Jaruzelski (PZPR) president of People's Poland.

On Dec. 31, 1989, the Sejm passed legislation restoring "Republic of Poland" as the country's name with a crowned eagle as its emblem. This moment marked the end of the People's Republic of Poland and the start of the Third Republic of Poland.

The First Noncommunist Government
After an unsuccessful attempt by PZPR's Czesław Kiszczak to form a government, a government headed by Tadeusz Mazowiecki was appointed Aug. 24, 1989. It was the first noncommunist Cabinet in Poland and in any the countries that found themselves in the Soviet bloc in the aftermath of World War II. The government was approved by the Sejm and President Jaruzelski on Sept. 12.

This government included people from the democratic opposition as well as members of the PZPR and its satellite parties. The deputy prime ministers were Kiszczak, who was also Minister of Internal Affairs, Czesław Janicki from the ZSL, who was also Minister of Agriculture, Food Economy and Forestry, Jan Janowski from the SD, and economist Leszek Balcerowicz, who represented Solidarity and became the new Finance Minister. The PZPR retained the Ministry of Defense, headed by Gen. Florian Siwicki, the Ministry of Foreign Economic Cooperation, led by Marcin ¦więcicki and the Ministry of Transport, Navigation and Communication, headed by Franciszek Wiel±dek. The ZSL was given the ministries of Justice, Environmental Protection, and Health, and the SD got the Ministry of the Domestic Market. The other ministries were staffed by the former opposition and its leading representatives: Jacek Kuroń as the Minister of Labor and Social Policy, Jerzy Osiatyński as head of the Central Planning Office, Henryk Samsonowicz as the Minister of Education, Tadeusz Syryjczyk as the Minister of Industry and Witold Trzeciakowski as Minister-Chairman of the Economic Council. The Foreign Ministry was taken over by Prof. Krzysztof Skubiszewski, a politically unaffiliated lawyer who had the former opposition's recommendation. Journalist Małgorzata Niezabitowska was appointed the government's press spokesperson.

Mazowiecki's Cabinet resigned Nov. 25, 1990, the day after the prime minister lost the presidential election to Lech Wałęsa. The Sejm accepted the government's resignation Dec. 14, 1990. The Council of Ministers continued working until the appointment of the government of Jan Krzysztof Bielecki on Jan. 12, 1991.

The Balcerowicz Plan
The flagship project of Mazowiecki's government was the Balcerowicz Plan, a package of economic and political reforms named after the deputy prime minister and finance minister. In September 1989 Balcerowicz, an economist from Warsaw's Main School of Planning and Statistics (now the Warsaw School of Economics, SGH), and a group of experts that included foreigners, developed an ambitious plan of reforms to transform the centrally planned economy to a market economy.

When the Balcerowicz Plan was being introduced, Poland had annual hyperinflation of 639.6 percent, a foreign debt of $42.3 billion (64.8 percent of GDP) and extensive market shortages.

The plan comprised 10 acts, which were passed by the Sejm in December and signed by President Jaruzelski Dec. 31, 1989:
1. The act on financial management of state-run enterprises eliminated the guaranteed existence of all state enterprises regardless of their financial state and production efficiency, and enabled bankruptcy proceedings to be launched in regard to unprofitable enterprises.
2. The act on the banking law forbade the budget deficit to be financed by the central bank, and prevented the unlimited printing of currency.
3. The act on credit abolished credit preferences for state enterprises and linked the interest rate to the inflation rate, as well as changing the terms of previously concluded loan agreements with a fixed interest rate.
4. The act on tax on salary raises took advantage of the "popiwek" tax introduced five years earlier to drastically curb the growth of nominal salaries in enterprises compared to real price growth.
5. The act on new tax rules unified the rules of paying taxes in all sectors of the economy.
6. The act on economic activity by foreign investors obligated foreign companies to sell foreign currency to the state at an exchange rate set by the central bank, exempted companies with foreign capital from the "popiwek" tax, and provided for the future possibility of transferring profits abroad.
7. The act on the foreign exchange law introduced internal convertibility of the zloty, abolished the state monopoly on foreign trade, and obligated companies to sell any foreign currency they earned to the state.
8. The act on the customs law unified the levying of customs duty on goods for all economic entities.
9. The act on employment changed the rules of operation for employment agencies.
10. The act on special conditions of dismissing employees ensured protection of people who were laid off (especially in cases of group layoffs), guaranteed gratuities, and introduced periodical benefits for the unemployed.

As a result of these acts, inflation dropped significantly, as did the budget deficit (there was a surplus in 1990), market shortages and central distribution of materials were eliminated, Poland's creditors agreed to reduce the foreign debt, and foreign currency reserves grew substantially. Poland reported the highest economic growth of all the former Eastern Bloc countries, the economy's technological backwardness was overcome (mainly in telecommunications and digital data processing), the state of the environment improved considerably, energy consumption decreased, and within two years 600,000 private businesses were set up, employing 1.5 million people.

However, the Balcerowicz Plan has been criticized for contributing to a considerable deterioration of the standard of living of many groups, mainly employees of unprofitable state enterprises and state farms, creating pockets of poverty and structural unemployment that continue to this day. For two decades, the slogan "Balcerowicz Must Go" has accompanied leftist demonstrations, especially populist ones.

First Bell at the WSE
On March 22, 1991, the Sejm passed the act on the law on public trading of securities and trust funds, creating the legal framework for a capital market in Poland. On April 12, the minister of privatization and the minister of finance, representing the Treasury, signed the founding deed of the Warsaw Stock Exchange. The first session, involving seven brokerages, was held April 16 and the shares of five companies were quoted: Tonsil audio equipment manufacturer, Próchnik clothing company, Krosno glassworks, Kable cable factory, and the Exbud construction giant. At first, sessions were held once a week.

On Oct. 10, 1994, the WSE officially joined the World Federation of Exchanges. Jan. 16, 1998 saw the start of the derivatives market-futures contracts for the WIG20 index. The first foreign company, Bank Austria Creditanstalt AG, debuted on the WSE on Oct. 14, 2003. Record turnover was reported on Dec. 21, 2007-zl.4.14 billion.

The Warsaw Stock Exchange became the largest bourse in the region, having exceeded the capitalization of the Wiener Bourse in July 2008. As of July 1, there were 366 companies listed on the WSE with total capitalization of zl.739.9 billion, of which domestic companies accounted for zl.372.8 billion. The volume of stocks traded in 2007 was zl.479.5 billion. The main indices on the Warsaw exchange are the WIG, WIG20 and mWIG40.

Wiesław Rozłucki was the first president of the WSE. He was succeeded by Ludwik Sobolewski in 2006.

President Wałęsa
The first free presidential election in Poland took place in November 1990. Jaruzelski had resigned, after submitted a bill to the Sejm on Sept. 19 shortening his term and constitutionally establishing a general election for the office of president. Previously, presidents had been elected by the National Assembly.

There were six presidential candidates: Peasant Party representative Roman Bartoszcze; former communist Włodzimierz Cimoszewicz; Prime Minister Mazowiecki; Leszek Moczulski, who chaired the radical Confederation for an Independent Poland (KPN); the mysterious businessman Stanisław Tymiński, returning from emigration in Peru, and Lech Wałęsa. The first round caused a sensation: Mazowiecki was defeated by Tymiński, who addressed his campaign mainly to voters disillusioned with the changes since 1989. Voter turnout reached 60 percent. In the second round, with a slightly smaller turnout (about 53 percent), Wałęsa won more than 72 percent of the votes.

After Wałęsa was sworn in as the president of the Republic of Poland, Ryszard Kaczorowski, the last president-in-exile based in London, presented him with the Second Republic's presidential insignia. This was widely viewed as a symbol of continuity of the Republic of Poland and an end to the undemocratic system that had been imposed on Poland for four decades.

Poland's first fully free parliamentary elections since World War II were held on Oct. 27, 1991. With a relatively poor turnout (43 percent), out of more than 100 political groups taking part, representatives of 29 parties won seats in the parliament. The term of this fragmented Sejm lasted until May 30, 1993.

End of censorship
So-called preventive censorship was exercised in postwar Poland by the Main Office for the Control of the Press, Publications and Public Performances (GUKPiW). This institution monitored all publications printed at all printing houses in the country, all theater, concert and other public performances, and all radio and television programming.

A list of authors whose works could not be published in People's Poland was issued in 1951 and periodically modified over subsequent decades, with new names added and some removed. It was the same with the subject matter in which the censors intervened. Depending on the current sociopolitical and economic situation, various topics would be censored, such as meat exports to the Soviet Union, publicity concerning the Nobel Peace Prize for Wałęsa, and even the activities of Pope John Paul II.

The GUKPiW was finally shut down in April 1990, but it had been virtually inoperative since the Solidarity victory in the June 4, 1989 elections.

New Foreign Policy
The new internal political situation required a new foreign policy. In the initial period, the main focus was on border issues and creating a new framework for neighborly relations with Russia and Germany.

In the fall of 1990, Poland issued a memorandum to the Soviet Union calling for the immediate start of talks on withdrawing Soviet armed forces from Polish territory. Prime Minister Jan Krzysztof Bielecki held talks during a visit to Moscow in April 1991. The summer of 1991 marked the start of withdrawal of 40,000 soldiers of the Northern Group of the Soviet Armed Forces from Poland, where they had been stationed since the end of World War II. Meanwhile on July 1, 1991, the Warsaw Pact was dissolved. Subsequent stages of the withdrawal of Russian forces were preceded by intensive negotiations involving such matters as ownership of the military bases and environmental issues. The last Russian soldier left Poland in September 1993.

A historic meeting took place in November 1989 in Krzyżowa, Silesia, between Prime Minister Mazowiecki and German Chancellor Helmut Kohl. During Mass, the two heads of government exchanged the symbolic sign of peace. A year later, on Nov. 14, 1990 Poland and Germany signed a treaty recognizing the border on the Oder and Neisse rivers. The treaty contained mutual pledges to respect sovereignty and territorial integrity and a statement that the two countries had no territorial claims against each other. It defined the foundations of cooperation between Poland and Germany in all major areas, created multi-level mechanisms of regular consultation, and regulated the issue of ethnic minorities in accordance with European standards set by the Commission on Security and Cooperation in Europe.

The agreement was preceded by the Two Plus Four conference on the reunification of Germany. This confirmed the provisions of the Zgorzelec Treaty signed between the People's Republic of Poland and East Germany in 1950, and the treaty between communist Poland and West Germany signed in 1970 in Warsaw, both of which concerned the inviolability of Poland's western border.

The Polish-German border treaty was signed in Warsaw by the respective foreign ministers, Krzysztof Skubiszewski and Hans-Dietrich Genscher. Poland ratified it on Nov. 26, 1991, and Germany on Dec. 16.
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