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The Warsaw Voice » Other » March 3, 2004
Chair of the Year 2003
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Chair of the Year
March 3, 2004 By Andrzej Jonas   
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Anyone who says we are living in easy times-is gravely mistaken. Anyone who claims we are facing problems that are impossible to solve-is just as deluded. Jerzy Hausner belongs to the group of those politicians who speak the truth. Perhaps because he is a man of science, perhaps because such are his principles. Or perhaps because he is a brave man.

The Warsaw Voice has decided to award its Chair of the Year in 2003 to Jerzy Hausner. He is brave, sensitive and a man of integrity. A politician who understands that what must be done, has to be done. But also one who is perfectly aware that in a democratic state, you can only do what wins public approval.

We grant the Chair of the Year annually to the person (or thing) who has had the greatest influence on the lives of Poles in a given year. We are granting this year's Chair to Prof. Hausner, deputy prime minister and minister of the economy, labor and social policy, for making a reality of his conviction that Poland can follow a path of intensive development that serves the people and the country. Hausner's program combines economic policy, reform of public finances and social sensitivity into a coherent whole. It is the first such project in many years. It restores the faith which accompanied the birth of the Third Republic of Poland-that not only are we able to solve the most difficult problems, but we are ready to do so.

In 2003, Poles were in desperate need of a positive vision of the future, one based firmly on reality. Hausner not only presents this, but with his energy and determination, he awoke the hope that we really are capable of realizing this vision.

In the past years, the Chair of the Year went to: Lech Wa喚sa, Leszek Balcerowicz, Jan Krzysztof Bielecki, Hanna Suchocka, the Warsaw Stock Exchange, Hanna Gronkiewicz-Waltz, the Supreme Court's Administrative Chamber of Labor and Social Security, the passenger car, Tadeusz Mazowiecki and Roman Kluska, Jerzy Buzek, Bronis豉w Geremek, Aleksander Kwa郾iewski, Adam Ma造sz and Danuta Hbner.


A Closer Look
Jerzy Hausner, deputy prime minister and minister of the economy, labor and social policy, talks to Andrzej Jonas and Andrzej Ratajczyk.

Over the past several months, the number one story in the Polish press has been the draft to rationalize public spending, dubbed "Hausner's plan." But these publications do not say much about the creator of the plan himself.
It's true. I have never sought much presence in the media for myself. However, I do my best to make time for journalists and to treat their work with understanding and respect. I also try to be a person who provides information and explanations instead of using the media as a tool.

Don't you find any satisfaction in the fact that the press is interested in you? Don't you see yourself as a media star?
I definitely don't. In this respect, I differ crucially from the previous coordinator of the government's economic policy [Grzegorz Ko這dko], whose attitude to the mass-media was the total opposite. To him, the media was an opportunity to show off his personality-not to inform.

But your public statements suggest that you pay a great deal of attention to maintaining a dialogue with the public. You have said on many occasions that without such dialogue, it would be impossible to achieve anything. Is it your knowledge of sociological techniques or is it something you are personally convinced of?
It's not about sociological techniques. It is the awareness that it's impossible to achieve any goals without public support. There are people who believe that the more centralized the decision-making system and the more concentrated authority, the faster and better the effects. I, in turn, believe that the road without dialogue is faster only on the surface and, first of all, that the effects of such actions are very short-lived. Nobody can tell me I am a man who makes decisions without trying to consult others, whoever they might be. This approach shows in various discussions; I try not to be the first to speak. I listen to various views and then play the role of a moderator who seeks to find common elements and to show which way to go. I call this approach an interactive method of social transformation. I apply it deliberately, as this is the way I was intellectually shaped.

Are tolerance and patience part of your character?
These days, I am seen as a person who can listen patiently, but it hasn't always been this way. As a young man, I was impatient, inclined to present my immediate point of view and demanding that others relate to my arguments. But with time, I developed the belief that it was wiser to first hear what others had to say, think about it and try to understand their points of view. It's something I appreciate about myself.

You work a lot on yourself.
I work a lot in general. It's not just because of a sense of duty and responsibility, but because I find pleasure and enormous satisfaction in work. I relax best when I work. I feel best when I can sit down behind my desk, turn on some music and start reading or writing something. It calms me, puts me in a good mood.

Which do you feel more: a politician or an economist?
My natural environment is academia, with which I have had ties since my college years. I have spent my entire professional life at the Academy of Economics in Cracow, where I obtained my Ph. D., post-doctoral degree and became a professor at the age of 44.

Can you remember the subject of your doctoral dissertation?
Of course. It concerned the influence of discrepancies in economic development on the integration process of the European Economic Community. I wanted to show how the future of the EEC would be influenced by the accession of countries at a lower development level. It was an analysis of the enlargement of the European Union's predecessor with Spain, Portugal and Greece. What's interesting, in the dissertation I in a way anticipated further phases of EU enlargement.

Entering big-time politics meant reduced contact with academia. Is that a problem?
I admit, I do suffer a bit because of the detachment from my natural environment. But I made the choice; I feel responsible for my choice and now I devote my time to my current role. But this doesn't mean that I value my political project above the academic one. The absolute priority in my life is to shape a certain part of the academic world. I'm speaking of the faculty of Public Economy and Administration, established in 1993 at the Academy of Economics in Cracow. I came up with the idea and was the main architect of the faculty. This project is not being carried out for me but for others, yet I won't conceal that I'm very committed to it and will stay with this project until I retire. It is my life's work.

Although academic life is more important to you than politics, you have been politically involved for a long time.
Correct. My political activity dates back to high school, when I joined the Union of Socialist Youth (ZMS). I first chaired the class authority and then the school's student authority. I continued my work with ZMS during my studies at the academy. In 1971, I joined the Polish United Workers' Party (PZPR) and was a member until the party's dissolution. In the late 1980s I was even chosen as first secretary of the academy committee. It was a living organization; you were not afraid to discuss politically difficult subjects and to be critical of the social "reality."

Your joining the PZPR meant acceptance of the dominant political system-real socialism-which was rejected by a significant part of Polish society. What made you choose that path?
The political choices of my youth were largely influenced by the people I grew up with. My parents identified with the "ZMP [socialist youth] generation." They, from the very beginning, saw their future in socialism and had a deep belief in its ideals. Thus, I was in a way naturally infected with the socialist idealism. That natural preprogramming led me later to the ZMS and PZPR.

There was another reason why my parents had a lasting influence on the development of my views. I grew up with little contact with my grandparents, because my parents started independent lives very early. When I was born, my mother was 22 years old and my father only 19. During World War II, my mother's family lived in areas occupied by the Soviet Union. When my mother was a teenager, she lost touch with her closest family, who were taken to Siberia, and she managed to come to her relatives in Warsaw. After the 1944 Warsaw Uprising, she was taken to Auschwitz and then to a labor camp in Germany. After the liberation, she went to 安inouj軼ie, where she met my father. He, in turn, had run away from his home in Cracow to the new territories in the west, called the Polish Wild West. I was born in 安inouj軼ie.

Relying on your own experiences, did you later modify the value system you received from your parents?
I arrived at my own considerations through intellectual study, reading a wide range of literature as well as living through watershed events in the history of Poland: March 1968, December 1970 and then the year 1980. And certainly, I made some modifications in my reasoning. But I have never shaken off the system of values and hierarchy of goals that my parents gave me. I have only set myself free from the stiff way of thinking on how to accomplish these goals.

Did the knowledge and experience you gained in the early 80s suggest to you that it was possible to reform the system of real socialism?
At the time, I was deeply convinced it was. Even by the end of the decade I believed it was not only possible, but necessary to reform real socialism. I remember that when in 1986 I became secretary of the Province Committee of the PZPR in charge of science and education, I was interviewed by the Wprost weekly. Talking with the journalist about necessary changes in the functioning of the state, I said history was giving us too little time. I didn't even realize just how little time. So, if I were to sum up that part of my life, I suffered a political defeat, as I was one of the people who believed it was possible to reform the socialist system. Today I realize it was impossible, because the system was so ossified and corroded that the collapse was inevitable.

On the other hand, my political defeat was about a mistaken argument, not attitude. I was wrong and those who said the system had to be rejected were right. But I don't have to be ashamed of my attitude, as I was one of those looking for an opportunity to make changes, who maintained a dialogue. That was an asset that later proved handy during the transformation. And the fact that Poland today is treading the Central European and not Eastern European path in part results from the attitude of people who, while members of the People's Poland's establishment, challenged that system and tried to change it. Therefore I do not feel that I'm "fodder for history" and at the same time, I can say that as a human being, I gained another life experience. I gained the certainty that nothing lasts eternally and you have to approach everything through evolution. And once and for all, I got rid of thinking in terms of preprogrammed history.

How do you see the issue of your identification with a specific political party?
I am deeply convinced that it's not worth belonging to a party just for a sense of belonging. I don't need a political party whose only task is to provide me with identification. I myself, with my knowledge and the way I treat reality, wonder who I am closer to and who not. Besides, today I do not accept any dogmas, as I know how hard it is to release myself from them afterwards. I want to develop my concepts in harmony with the changing times. And I want to have the right to say I was wrong about some issue and right about others. I do not aspire to possess absolute truth.

I consider myself an individual that does not need to be in a flock to shape the way they think. But as a level-headed person, I also have to find the ability to cooperate. People who know me realize that the political views of my colleagues are secondary to me. It's more important whether we can solve problems together. My approach to change relies on the interactive method, as I'm convinced it's impossible to work out optimal solutions without confronting different opinions and viewpoints.

An approach like this can work at the stage of determining basic concepts. But in order to put these into effect, it takes a governmental or parliamentary majority.
That's why the world of politics is divided into politicians who deal with gaining and retaining power (they excel in "50 percent plus one vote") and those preoccupied with solving problems. They need one another. If anyone believes it's enough in politics to be right and the majority is unnecessary, they will achieve nothing. Similarly, it's not enough to be in the majority and keep making mistakes, as you can lose power very quickly. Public policy and party politics to build a majority and alliances are two different things. I exercise public policy which has to be subordinated not to party arguments but to superior reasons-the people. But I am perfectly aware that the policy can be exercised only because those who believe in party politics look after the majority.

You have made it clear you are far from dogmatism in the area of economic concepts and politics. At the same time, you declare you are a man of principle and a pragmatist who pursues ways to solve every problem. Can all this be combined? Are you ready to give up in case no problems can be solved in the present political lineup?
From my point of view, there is no point clinging to the post if I cannot solve the problems. On the other hand, it's obvious that the post enables me to be more than just an observer: I am a participant in certain events. This is the difference between a practical role and a purely intellectual one. As an observer, I'm not constrained in my considerations, I do not have to make deals with anyone. But I cannot make any change either; I can only try and influence the views of others. As a decision maker, I limit the freedom of my intellectual choice, as I have to accept the point of view of others. But this perspective provides me with much greater possibilities to do something practical.

When it comes to principles, I believe that disaster strikes when principles, understood as a system of values, become an ideology implemented in practice. What we need is thinking in terms of ideology, understood as a dispute about values, but we should steer clear of situations where the state is supposed to define and implement any ideologies. In my way of thinking, I never assume I am absolutely right, but I do my best to understand others. When solving problems, I consider existing limitations, the time horizon, and at the same time, I try to shape my environment so as to optimize the chance of success. If I see, facing an impossible barrier, that I devote more time to defending my stance than to solving the problem, I will quit. Besides, life has taught me that it's a very good thing to return to one's natural environment from time to time. It enables you to recharge your batteries with new ideas, to draw conclusions and to build far-reaching thought structures. If an opportunity arises, you can try doing something together with other people.

Where on the political map of Europe would you place yourself? Are you closer to a social democrat, liberal or would you prefer to seek a third way? The ideas of which Western politicians do you identify with most: Gerhard Schr鐰er or Tony Blair?
Today I do not really want to classify myself and look for a place in any key trend on the European political scene. I have not been following the development of political thought in Europe recently. But I think that if I had to point to my place among European politicians, it would be between G顤an Persson and Schr鐰er.

Would you call yourself a modern social democrat?
A social liberal, rather-a person who in some sectors puts emphasis on freedom and on equality in others. I don't think one rules out the other. Some actions for equality are necessary to make us genuinely free and to overlook the problem of equality means to put freedom in danger. On the other hand, I believe that without freedom, nothing can be improved in terms of equality. In this sense, I can relate to ideals close to civic society, to self-governance. Ideals that do not trust etatism, regardless of its tone. This does not mean, however, that I consider the state redundant. In my reasoning, I try to change the definition of the state, to first of all counter the assertion that the state is an organized apparatus of oppression. I would like the state to function as an important partner in certain strategic undertakings and not as an entity which imposes its will through the fact that one group is currently in power.

What vision of Europe is the closest to you?
Now I'm starting to feel like a person who is supposed to formulate definitions in an area where I'm not really comfortable yet. If I were to make a comprehensive presentation of my vision of Europe, I would first have to become thoroughly acquainted with the present conceptions and then I would try to relate to them. While arriving at my own ideas, I would definitely use the method that I apply when I need to deal with problems which are new to me. For instance, when I deal with regional development and have some knowledge and competence on the matter and am forced to take a stance on the power engineering policy, I never say that according to the theory of regional development you have to do this and that. Instead, I start listening to different people whose economic and political preferences do not always meet. So, if I were forced to speak about the direction in which the EU should develop, I would first hear different arguments.

All this doesn't mean, however, that I do not have my own ideas on certain problems in the EU. For example, one of the problems I can see that the EU will have to face, is the question of whether a system of monetary and economic union, built on criteria of fiscal convergence, can be maintained in its present form. Will there be a withdrawal from the system or is it enough to modify it? I advocate the path of change, modification and not complete rejection of the system. It's also essential to find an answer to the question of how to harmonize the Lisbon Strategy-on building competitiveness of the European economic zone in the global dimension through efficient employment and structural changes in the economy-with the macroeconomics contained in the Treaty of Maastricht. I believe it's possible, but it takes the creation of new institutions, some new solutions, definitions, a new perspective. To begin with, it's impossible to solve the problem without dialogue. It's not enough to say "this is what gathers from experience and we should stick to it." Another unacceptable attitude is that everybody has to observe the same rules, though the French and Germans not necessarily so.

Your arguments seem more characteristic of an academic than a politician.
I admit that in the intellectual respect, I most preferred the role I played when I was the chief adviser of Deputy Prime Minister Grzegorz Ko這dko. I defined it as an active strategic observer. The word "strategic" meant I was not dealing with details and day-to-day issues, but structural and long-term problems. The word "observer" meant that I was first of all a person to suggest solutions and not a decision maker. Finally, "active" meant that I was trying to provide the right conditions for the decisions to be made. That role suited my character perfectly well. Much more than the role of someone who makes decisions in many cases.

You lost that comfort zone though, once you took the post of deputy minister and minister of the economy.
Yes and no. Mind you, I didn't want to be minister of the Treasury, although I was approached with the proposal. I wasn't interested in becoming the minister of finance either. I believed the Ministry of the Economy was the right place for me, at least the way I saw it: a ministry of social and economic development and not one of making decisions about enterprises and this or that financial operation. And indeed, in this ministry elements of strategy, of observation and making joint decisions are more prominent than elsewhere.

Due to your position, you are a very hard-working person. Do you find time for your family in Cracow?
I try to spend weekends with my family either in Cracow or in our mountain home in Szczawa. My eldest daughter lives with her husband and child in Warsaw and my wife and I often visit them. There's a very strong bond between my wife and our daughters; it's because my wife looked after our home for many years. We met at the academy, then I worked to support our family while my wife committed herself to raising our daughters.

You mentioned that your favorite way to spend your free time was work. You work best with music in the background. What kind of music do you listen to most frequently?
Music is an inseparable part of my work. I like very diverse kinds of music. For instance, this morning I listened to Vivaldi's violin concertos, followed by piano works by Szymanowski and then Dido's latest album.

You are also well known as a big soccer fan.
In my spare moments, which are sadly very rare, I enjoy playing soccer a lot. I usually play in Szczawa with my neighbors and their children. In Cracow I play with friends from my academic team. But sometimes I manage to find time to kick the ball around in Warsaw.

What position do you play?
That depends on what kind of field. On small soccer fields I play in the back as a sweeper and on large ones, as a left back or wing. On small fields, where you can control the game from the back, I am usually the captain who coordinates the strategy, decides about the pace of the game, and so on. On large fields, in turn, where a single person cannot determine the character of the game, I play in attack. My greatest skill is the ability to see what is going on and to pass the ball. A good pass, finished off by another player, gives me more satisfaction than scoring a goal.

Is your fitness from the soccer field useful in your work in the government?
Oh yes, it is. I'm in very good shape for my age. I presume that if it were not for my health, I wouldn't be able to work at such a pace, with only five or six hours of sleep. This is an exhausting job.


Hausner Plan in Brief
The social expenditure rationalization program, known as the "Hausner Plan," provides for several-year-long cuts in social policies and reductions of expenditures on state administration. It is meant to prevent the deterioration of public finances. The social dispute preceding the plan's adoption by the government on Jan. 27 led to the postponement of the planned cuts.

According to estimations by the Ministry of the Economy, Labor and Social Policy, in the period of 2004-07, saving efforts will lead to an approximate zl.50 billion decrease in public expenditures. About zl.20 billion of that sum will be saved from administration and the remaining 29.4 billion in social policies.

The introduction of savings in administration is beginning already in 2004 and the savings will increase in the next three years. The list of cuts incorporates 18 types of activities. For instance, the number of managerial posts in state offices and ministries will be reduced and fewer state officials will be employed in province administration institutions.

Savings in social policies are to stem from a change in the principles of indexing retirement and disability pensions and limited access to rapidly growing pre-retirement benefits. The principles concerning disability pension will be made more rigorous and those involving help for the disabled will also be changed. Sickness benefits will be smaller as well. The plan, however, does not foresee mechanical cuts in social expenditures-these will grow every year, although at a pace slower than Poland's economic growth.

Acts enabling the implementation of the Hausner Plan will enter the Sejm in three packages. The first, the "winter package," will include acts on employment promotion, pre-retirement benefits, retirement and disability pensions from the Social Insurance Company (ZUS) and farmers' retirement pensions. The "spring package" will include acts on illness benefits, rehabilitation of the disabled and indexation of benefits other than retirement and disability pensions. The third, "autumn package" will incorporate acts on transition pensions for people awaiting their formal retirement pensions and a new act assuming a change in the retirement pension act to date.


BIO
Jerzy Hausner, 54, a member of parliament, from Oct. 19, 2001, minister of labor and social policy in the government of Prime Minister Leszek Miller, and since Jan. 8, 2003-after the fusion of the Ministry of Labor with the Ministry of the Economy-minister of the economy, labor and social policy. He is a professor of economics.

Hausner is a graduate of the Economic Academy of Cracow; since 1972, he has held a research and teaching position there. In 1994 he received the title of professor ordinarius, the highest academic title in Poland. He holds a chair of economics and public administration at the academy.

From 1986 to 1989 Hausner was secretary for science and academics at the regional Cracow Committee of the Polish United Workers' Party.

From 1994 to 1996 he served as director-general of the Prime Minister's Office. In that capacity, he was in charge of a group of advisors to Grzegorz Ko這dko, then deputy prime minister responsible for the economy. Hausner coordinated preparatory work on and implementation of the "Strategy for Poland," at the time the key government program of economic and social development for the country. He also prepared the outline for the "Compact for Silesia," a program of economic renewal for that crisis-stricken industrial region. Hausner further served as commissioner to establish the Government Center for Strategic Studies. In February 1997, in the government of W這dzimierz Cimoszewicz, he was appointed undersecretary of state at the Prime Minister's Chancellery and government commissioner for social security reform. Hausner was charged with developing an implementing a timetable for social security reform, establishing the operational principles of pension funds, as well as with an ex ante evaluation of the implementation costs of the new social security system, and with designing a financing plan.

In his research, Hausner is interested in the interaction of economics and politics, including political economy, public economy and public administration. He has authored 231 publications, including 48 books, 58 journal articles and 38 book chapters. Hausner is a member of the Polish Economic Association, the Scientific Association of Organization and Management and the European Association for Evolutionary Political Economy.



Prof. Dariusz Rosati, rector of the Academy of Commerce and Law (WSHiP) in Warsaw, former member of the Monetary Policy Council (RPP) and ex-minister for foreign affairs:
Jerzy Hausner is a well-educated economist and an intelligent and energetic man. He is a courageous and determined person. He can by no means be considered a procrastinator or a backstage activist. He openly states his opinions, which is obviously of value. A longtime academic teacher, he has never been a typical representative of the party apparatus. Even though he has considerable political experience, he is not as strongly placed within politics or party structures as regular full-time party activists, which can be a hindering factor, particularly in a situation when he is supposed to convince the Democratic Left Alliance's (SLD) political basis and caucus to his considerably radical program.

Hausner is a good economist with recognized scientific achievements, even though in the past he was more involved in the study of social policy phenomena than in macroeconomics or macroeconomic policy. I fully respect the evolution Prof. Hausner has experienced in this area. A year ago, he strongly opposed the program of budget savings presented by the then Deputy Prime Minister/Finance Minister Grzegorz Ko這dko. It was Ko這dko who was then talking about the need to reduce the deficit and withhold or abandon the indexing of pensions. His main opponent in the government at that time was Jerzy Hausner, who believed that a contrary policy should be adopted-increased expenditures and a greater budget deficit in order to stimulate the economy to grow.

However, when Hausner thoroughly analyzed the condition of public finances he, which I respect him for, had the courage to change his mind and start supporting the inevitable cuts. I am calling him a courageous man because there have not been many people in recent Polish history who were capable of presenting an unpopular albeit indispensable program that would inevitably raise social controversies, supporting it with their name and fighting like tigers for that program to be adopted.

The lack of political support makes it difficult for Hausner to struggle for acceptance of his plan in political circles. He is not really treated as a member of the basic core of the party apparatus. The opinions he issues and the plan he suggests are judged unacceptable, or at least incomprehensible, by many people thinking in traditional leftist terms. The opinion dominant in SLD was a naive faith in the possibility of combining fast growth with a wide range of welfare benefits, more state intervention and creation of new jobs. Such a belief stemmed from ignorance and the traditional views on leftist politics. Hausner dispels these illusions and argues that leftist thinking must not mean consent to waste and scandals.

Any social democratic program should be perceived from a different perspective in the time of globalization-the same goals should be pursued, yet in an entirely different way. Beside a program of cuts, Hausner suggests the introduction of a change in the social policy philosophy. The tendency dominant so far has been to eliminate people from the labor market and provide them with aid, unemployment benefits and all kinds of social security instruments. Hausner wants to reverse this trend, keeping people as long as possible on the job market and creating proper conditions for them to find jobs for themselves and to display greater initiative. This is a modern vision of social policy.

It is also not true that his reform threatens the interest of the poorest and weakest. His reform is 75-percent based on the elimination of waste and obtaining various benefits under false pretenses. The remaining 25 percent consist of retaining the principles of common sense and justice. For example, the proposed revision of the disability pension system is nothing other than an attempt to take away undue privileges from healthy and able-bodied individuals, who unlawfully or illegally obtained their disability pension rights in the past. On the other hand, the reform of the Farmers' Social Insurance Fund (KRUS) is meant to make more affluent farmers with 100-or-so-hectare farms pay social insurance contributions, like every regularly employed citizen, instead of using the benefit KRUS system, which should rather function as a social support system for the poorest farmers who do not possess large market-oriented farms.

Similarly, the partial reform of the National Fund for the Rehabilitation of the Disabled (PFRON) was not meant to impair the situation of the disabled, but to prevent companies from the dishonest practice of employing disabled workers. Such companies were allowed to use a special VAT tax break. In fact, the relief was many times bigger than the cost of employing the disabled and was not in any way used to support such workers but merely served as a means for the companies' owners to increase their profits.



Janusz Jankowiak, chief economist at BRE Bank, on Deputy Prime Minister Jerzy Hausner:
I do appreciate the fact that Deputy Prime Minister Jerzy Hausner has finally managed to push through a discussion on the need for fiscal adjustments, not just within the government but also in the parliamentary forum. On the other hand, I believe a difficulty has emerged: his ambivalent feelings as a politician and as an economist. Hausner seems to fully share the opinion that this program is inadequate for the needs and the scale of threats that public finances pose to the macroeconomic equilibrium. On the other hand, he has to make concessions, as he is aware of the internal determinants within the Democratic Left Alliance (SLD) and in parliament. As might be expected, this adversely affects the content and the quality of this program since, at the very start, while it is just an outline, it is ill adjusted to real needs.

I think this is a dilemma of which Hausner must be aware. In my view, the basic error was committed at the very beginning of this government's term of office, when Hausner was not yet responsible for economic policy. At the time when Marek Belka, and later Grzegorz Ko這dko, held the minister of finance position, the government was wasting time implementing projects designed to adjust budget expenditure to the budget's size. It seems to me that in continuing his predecessors' line, Hausner is postponing and delaying several projects. In this respect I am very critical of this year's budget and, precisely, of the discrepancy between the shape of this budget and what was later on included in Hausner's austerity measures program. More determined measures could have been taken already this year.

Hausner has promised many times to reduce the budget deficit and loan requirements as provided for by the 2004 preliminary budget. He is aware of this necessity. But if he is aware, a question arises: why didn't he demand this earlier? His answer, when asked about the issue, was that there was not enough time or that the political determinants were inappropriate. These explanations can be acknowledged, but they can hardly be accepted. In all: thank Hausner that something has been done at all. I mean an outline of a concept covering a number of specific entries. Although it turned out after public consultations that the more difficult and urgent the projects from the public's viewpoint, the more distant the date of their implementation. The most crucial fiscal adjustments in social transfers are not to be expected before the parliamentary elections, which seems most inappropriate.

Quite a long time ago Finance Minister Jaros豉w Bauc of Jerzy Buzek's cabinet came up with a good diagnosis on the reasons behind this state of affairs, that is, inadequate budget expenditure for budget revenue and parliament deciding on budget spending regardless of income levels. Bauc presented this situation in general and later on Hausner came up with a more specific concept. I have no objections regarding the diagnosis itself; I believe that the threat zones have been defined accurately. The problem is that the threats indicated are not matched by specific formulas to avert them. In short, budget expenditure should have been restructured much earlier and much more profoundly.

The process of public consultations, which ended up with moderation of social transfer cuts, lasted several months. Over that time, bills providing tangible savings could have been drawn up and "pushed through" the parliament so that tangible savings would appear as early as 2004. But it turned out after the consultations of October 2003, when the ready bills-like that on new pension adjustment basis-could have been submitted to the Sejm, that it was too late in legal terms. A lot of time had been lost.

In my view, Hausner's weakness is that he acts as a politician all the time, as he should do; but in doing so he is reluctant to believe the economists employed in the commercial sector who claim that financial markets are the most important for the economy at the moment. He views this opinion at a distance, arguing that it is not just financial markets that determine the state of the economy. But when we look at what is happening to the zloty exchange rate, as well as the cost of loans the government can get from financial markets, it becomes obvious that these really are the most important. In saying "we" I mean economists employed by companies, people working close to financial markets who have been pointing to the threats to public finances for a long time now.


Ex-Juvenile Delinquent Hausner
Jerzy Hausner is today seen as an incredibly calm and cooperative person. However, as he himself admits, it has not always been so. As a schoolboy he frequently misbehaved, which resulted in a poor conduct grade he obtained at the end of the year. Hausner's youth was equally stormy. As he recently confessed in an interview for Viva magazine, as a student he even went to jail. In March 1968 he and his friends were arrested for putting up flyers calling for a student strike. A misdemeanor board sentenced Hausner to a fine which could be exchanged for detention. As he refused to pay, he was placed in the famous Cracow jail on Montelupich Street. He spent five days there. He was released when his grandmother "bailed him out," something that he did not at all appreciate.
Andrzej Jonas, founder and editor-in-chief of The Warsaw Voice, commentator on current affairs for the Polish media.
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