“Agreement’s” disagreement inside the ruling coalition

The formation of the government is being accompanied by a dispute within the ruling camp.

The “Agreement” party, a liberal conservative faction led by Deputy PM Jarosław Gowin, which has 18 out of the 235 Law and Justice (PiS) MPs is contesting two PiS proposals. “Agreement” does not want the government to lift the ceiling on social security contributions and has voiced opposition to PiS putting forward controversial candidates for membership of the Constitutional Court without consulting Mr Gowin’s party.

On Wednesday night PiS parliamentarians filed a draft bill in the Lower House which would scrap the limit on social security contributions. The legislation would give effect to the government’s budget calculations, which assumed that this ceiling would be lifted and that this would generate around PLN 6 bn (EUR 1.4 bn) for the exchequer.

Mr Gowin’s party has signalled for months that this lifting of the ceiling on social security (ZUS) payments was unacceptable for them. The reason being that it hits the incomes of well-paid professionals and top managers. It also adds to the costs faced by those companies who rely on highly paid personnel.

“Agreement” has also voiced doubts about supporting two out of the three candidates for membership of the Constitutional Court put forward by PiS. They regard Stanisław Piotrowicz, who was once a prosecutor in communist times of martial law, and Prof. Krystyna Pawłowicz, a feisty MP in the last Parliament, as controversial candidates for justices in that court.

The situation is further complicated by the fact that the current coalition agreement of the “United Right”, a coalition made up of PiS, Agreement and the Justice Minister Zbigniew Ziobro’s “Solidarity Poland” party expired on 11 November and the three parties are still in the process of agreeing a successor deal.

It is not impossible that PiS’s gambit of filing the draft bill on lifting the social security ceiling and its insistence on forcing through Prof Pawłowicz and Stanisław Piotrowicz for the Constitutional Court is part of their negotiating tactics with Mr Gowin. If he relents on other issues of interest to him and his party, PiS may ease off on the social security issue and maybe on one of the constitutional court candidates.

Meanwhile, the next government, to be headed by Mateusz Morawiecki is being formed. The delay in the three parties hammering out a deal is not expected to affect that process or the vote of confidence that the new government must face next week in the Lower House.

President to resolve the matter?

The social security contributions issue may well be resolved by the President. He has heavily hinted that he was not willing to sign legislation that lifted the ceiling on social security contributions. Even if the legislation should clear the Lower House with PiS getting support from the “Left”’s MPs, a Presidential veto would consign it to the dustbin.

The President is highly likely to use this situation to show that he is prepared to go against the views of his own party. It would not do him any harm, come the Presidential election to have broadened his appeal to some in the professional and managerial classes.

For the government it is a real headache, as they will have to find an additional six billion zloty to plug the gap created by the social security ceiling staying put. If the government wants to avoid having to cut spending or increase other taxes it may have to accept that it will have to borrow and have a budget with a small deficit, rather than the balanced budget which it had planned.

Comment:

This is standard in coalition politics - a game of brinkmanship - but the cards in this one appear marked.

No one believes that the ruling coalition will break apart. Mr Gowin’s party is too small to survive on its own and Mr Gowin has already experienced how hard it is for anyone to go it alone after splitting from a big party.

His experience of breaking away from the Civic Platform (PO) in 2013 led him having to seek refuge in an alliance with PiS come 2014. He does not want to be left in the cold again.

However, he is making a genuine attempt to defend the interests of the managerial and professional classes, whose votes are needed by President Duda in next year’s Presidential election. This is the demographic “Agreement” have always tried to woo as part of a strategy of PiS having a liberal conservative wing.

Jarosław Kaczyński is a seasoned politician who has participated in literally hundreds of coalition negotiations. Many of which were far more difficult than this one. No one expects him to slip up in this instance.

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