by Marek Tatala, Civil Development Forum (FOR), Poland and Zoltán Kész, Free Market Foundation, Hungary
Prime Minister Donald Tusk of Poland wants to nationalize the people’s private pension funds. Can he be prevented from taking this dreadful step?
In 1999 Poland, like Hungary and other central European countries, moved from a traditional pay-as-you-go (PAYGO) defined-benefit pension system to a defined-contribution system combined with a mandatory retirement-savings plan operated by private pension funds. Unfortunately, Tusk now wants to repeat the mistake Hungary made in 2010, when Prime Minister Victor Orban, nationalized the private funds’ assets. Poland should reject Orban’s flawed vision of economic salvation through government control.
Victor Orban (left) and Donald Tusk (right)
During the Polish think tanks’ visit in Brussels I was invited to the opening of the European Endowment for Democracy (EED). The Endowment is located in a small palace – a former embassy building handed over by Poland. This location expresses the financial structure of this organization, which is sponsored mostly by our country. It is why many Polish politicians, diplomats and the government representatives, including Foreign Minister Radoslaw Sikorski, turned up at the opening. Lower enthusiasm for this initiative among the other EU countries was reflected by the absence of any important representatives from the rest of the governments. I am rather doubtful about the possible success of the EED after what I heard and saw in Brussels and at the EED’s website.
Minister Radoslaw Sikorski said during the opening:
“This is a repayment of our debts that we owe to all our supporters in the 1970s and 80s. This is also a confirmation of the Polish expertise and know-how that can inspire democratic changes.”
At the EED’s website we can read that:
“The European Endowment for Democracy will assist: pro-democratic civil society organisations, movements and individual activists acting in favour of a pluralistic multiparty system regardless of their size or formal status. The EED will also provide assistance to young leaders, independent media and journalists, provided that all the beneficiaries adhere to core democratic values and human rights as well as subscribe to principles of non-violence.”
In this flow of optimistic words and lofty declarations, from the EED opening and the website, several important keywords were missing. These keywords are essential for creating a durable and prosperous democratic system and include: economic freedom, well defined and secured property rights, rules of law, free exchange of goods and services, unconstrained and open competition, limited state, and economic well-being.