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Tusk arms ally to slash Poland’s red tape

By Jan Cienski in Warsaw

Published: March 26 2008 01:34 | Last updated: March 26 2008 01:34

Polish businesses have to keep cash register receipts for five years despite the fact that the ink used to print them usually fades after one year.

Files stuffed with illegible receipts are just one example of the hundreds of bizarre regulations blamed by business for hamstringing the economy.

With Polish labour costs rising, economic growth slowing and exporters worried about the surging zloty, Donald Tusk, the prime minister, says he wants to take a “machete” to the system of inflexible bureaucrats and often idiotic regulations.

Mr Tusk has placed the blade in the hands of Janusz Palikot, an MP from his Civic Platform party who made a fortune in the alcoholic drinks industry. Mr Palikot is chairman of a parliamentary commission charged by Mr Tusk with drawing up an initial list of 250 unnecessary regulations.

“Poland is saddled with hundreds of laws and regulations that are unclear and often absurd,” says Mr Palikot, sitting over a cup of tea in a central Warsaw café, amusing himself with quotations from value added tax regulations that he calls: “The most idiotically written law I’ve ever seen.”

The commission also hopes to get rid of a Catch-22 requirement that bedevils investors from outside the European Economic Area, who have to obtain a certificate from a Polish diplomatic mission in order to register in Poland. In the absence of regulations stating foreign missions have to issue such documents, many of them refuse to do so. “We want to make a lot of little changes,” Mr Palikot says. “Everyone who has tried to do this before us has prepared huge, complex pieces of legislation which take a lot of political capital.”

Although he probably has the most business experience of any of Poland’s MPs – admittedly a fairly low threshold – Mr Palikot is a controversial choice to head the commission. Last year he livened up a news conference by waving a pistol in one hand and brandishing a vibrator in the other.

Nevertheless, Mr Palikot has the firm support of Mr Tusk in a battle against the bureaucrats, which, if successful, could make life easier both for business and for normal Poles. Polish companies have been tearing out their hair over red tape for years, with surveys citing it as one of the biggest obstacles to doing business. A list of “black barriers” published annually by Lewiatan, the business organisation, is 52 pages long. “In 2007, there was no reduction in the number of permits, concessions and licenses, instead new regulations expanded to cover other areas of economic activity,” wrote Henryka Bochniarz, head of Lewiatian, in the foreword to the list of barriers.

When Poland was freed from communism in 1989, there were few regulations limiting economic activity. Jan Krzysztof Bielecki, a former prime minister and now head of Bank Pekao, the country’s largest, calls the early years of capitalism “a golden age”.

But successive parliaments added layers of often contradictory and badly written law. An effort by the previous government to cut red tape headed by Roman Kluska, a businessman bankrupted by an improper tax ruling, went nowhere. “Since 1989 there has never been a successful initiative to liquidate barriers. We’ve simply passed new laws without assessing the effects of the laws already on the books,” says Mr Palikot.

The bureaucrats are unlikely to give way without a fight. Rather than eliminate the requirement of keeping receipts for five years, as Mr Palikot wants, the finance ministry has proposed better ink. “We have a tradition of bureaucrats as aggressors,” says Mr Palikot, “not as public servants.”

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