Historical calendar: anniversary of the first instance judgement on the celebrated founding affair of the 3rd Republic of Poland – FOZZ affair.
Today in our calendar we will look at the spheres of the Polish economical transformation, in which the scandal pursued the scandal.
The economical situation at the threshold of the alleged III Republic (1988-1990) was disastrous. The Freedom of economical Activity Act of 23 December 1988 by Mieczysław Wilczek, which de facto introduced a completely free marketplace economical model, helped small in this respect, as despite the theoretical restoration of private property in trade, crafts and industry, the national economy continued to dominate the state sector. It was followed by spontaneous dumping of tiny retail and service companies, and the full of Poland began to match 1 large bazaar.
They traded virtually everything and everywhere, on sidewalks, fairs, sports stadiums, etc. Wilczek's bill has unleashed years suppressed, gigantic entrepreneurship of Poles. Unfortunately, the common bread eaters could not rapidly rise adequate capital to take over state production facilities. It was besides not for people associated with the strategy who had been rich for respective years, preying on national assets under alleged nomenklatur companies.
Even they inactive had besides small to own hundreds of large companies and factories for their actual value. The process had to be accelerated, especially as the crisis intensified from period to month. The budget deficits were patched with further abroad loans, but that was not adequate either. As a result, money was greatly accelerated and hyperinflation triggered in the short term. The way to save the situation was to rise prices in shops and besides free of them, to value salaries, pensions and pensions.
It was another fraud of communists resulting in impoverishment of society. Even in 1988, 1185 loaves of bread and 1475 liters of fuel could be purchased for an average salary, and in 1990 it was only 341 loaves and 565 liters of fuel.
Under these conditions, reforms were simply necessary. They were decided to conduct them in accordance with the instructions of Western bankers – financiers who were creditors of Polish debts. On 22 June 1989, an article by Edward Mortimer, John Lloyd, Peter Riddell and Lionel Barber was published in the British paper with an global coverage of the Financial Times, providing information about the Communists' agreement and experts on "Solidarity" as to the request to implement circumstantial solutions in Poland.
It was a plan of the alleged "shock therapy", developed by George Soros. According to him, the transition of the Polish economy from centrally controlled to capitalist, should take place by reducing the quality of life of society and broad privatisation of industry. The Polish government was to turn state enterprises into a peculiar liquidation agency, which would then value them and sale them to home and abroad buyers.
In practice, Poles could not afford to buy companies, so in principle, they were to be held by external entities. The galloping inflation, which was getting out of control, made the plan should be changed and accelerated. Ultimately, Soros, Jeffrey Sachs, was sent to Poland, who wrote the main presumption of economical transformation.
In order to make it credible to indigenous society, the face of change was made Leszek Balcerovich. This erstwhile associate of the communist party, financial advisor of “Solidarity” and worker of the Institute of Basic Problems of Marxism – Leninism at the KC PZPR was presented to Poles as a prominent financier and politician and a supporter of free marketplace solutions.
As Deputy Prime Minister and Minister of Finance in the government of Tadeusz Mazowiecki and Jan Krzysztof Bielecki, he led to the entry into force of respective legal acts reforming the Polish economy. The most crucial of them was the ‘Law on the amendment of the Act on the Financial Economy of State Enterprises’, which allowed the sale or liquidation of workplaces regardless of their strategical value for the national economy, efficiency or financial performance.
As a consequence of the legal acts introduced, the alleged “wild privatization” in Poland began, i.e. the sale of state ownership for a fraction of its real value. The golden period of large financial and economical scandals began, with the FOZZ affair headed. Only within it, military intelligence transferred at least $5 billion from Poland. This money was utilized to build private property of members of the fresh Polish elite. Dariusz Przywieczerski founded the Bank of economical Initiatives, the current Millennium Bank.
The FOZZ affair was referred to as the “mother of all affairs” as it simply marked the beginning of an unruly act. In the following years, there were more and more. The most celebrated of them are the Art-B affair, the Telegraph affair, the PKP billing scandal, the fuel scandal, the alcohol scandal, the NFI scandal, the gambling scandal, the land scandal, the coal scandal, the Starachowice scandal, and the Amber Gold scandal.
For money transferred from the state budget and from average Poles, people of the old-new strategy became millionaires and yet had the capital essential in the privatisation process of large state enterprises. In addition, at both local and central level, there have been times of privatization, corruption and moral scandals, e.g. Rivin's affair, Stella Maris' affair, Olina's affair, skin hunters' scandal, eavesdrops, tape scandal.
The 3rd of the Republic of Poland became a full failure of the judiciary. In the FOZZ case, the first instance's ruling was only handed down on March 29, 2005.
Previous entry from our calendar is available Here..
