Money sent from UK boosts Poland's embattled leaders

Despite a spate of scandals and ministerial departures, Poland's nationalist government has been saved by an economic boom helped by cash sent home by Poles working abroad.

Since the UK and Ireland opened their labour markets to Polish workers, the financial inflows to the country have grown to €6.4bn (£4.3bn) per annum.

Growing prosperity has rescued the accident-prone government, dominated by the twin brothers who hold the positions of President and Prime Minister.

Since entering office in 2005, the president Lech Kaczynski and his brother Jaroslaw have got through five finance ministers, two foreign ministers, two treasury ministers, one prime minister, a defence minister and an interior minister.

The deputy Prime Minister and populist maverick, Andrzej Lepper, quit after a row with the twins before being reinstated. The government also survived the exposure of taped conversations showing how a senior official offered an MP inducements to switch political affiliation.

The latest high-profile resignation was that of Radek Sikorski, the outspoken defence minister, who quit earlier this month after rumours of a clash over the behaviour of Antoni Macierewicz, chief of Poland's military secret service and a friend of the twins.

But the new ructions seem to have strengthened the twins' grip on power, which has been buoyed by economic growth.

Remittances from abroad are now worth almost 2.5 per cent of the gross domestic product of €250bn.

Since the UK opened its labour market to Poles almost three years ago at least a quarter of a million Poles have settled in Britain.

Marcin Korolec, under-secretary at Poland's ministry of economics, said: "The statistics show that the transfer from Polish people working abroad is something like €6bn a year.

"Obviously this is a huge amount of capital, a huge amount of flow. It has an impact on internal consumption and internal growth."

Spurred by this financial stimulus and by the benefits of EU membership, the Polish economy has grown by an impressive rate of 5.8 per cent. This was helped by a boom in construction, which saw a 12 per cent increase in 2006.

According to an official economic report published this month, the growth for last year "was driven mainly by a rise in total consumption" with medium and larger firms reporting increases in retail sales of 11.9 per cent - as opposed to 1.5 per cent in 2005.

Key elements identified as prompting this include an improvement in the labour market, an increase in wages, the inflow of EU agricultural subsidies and "transfers of remittance".

It is unclear what proportion of the cash flowing into Poland originates in the UK. It is likely to be substantial, however, because official statistics last year showed that of 427,000 migrant workers from new EU countries that registered for work in Britain, 62 per cent were from Poland.

Unofficial estimates have suggested that many more, perhaps as many as a million, are actually working in the UK.

During elections in 2005, Jaroslaw Kaczynski promised not to put himself forward for the premiership if his brother became president. That pledge was broken when the government's first prime minister, Kazimierz Marcinkiewicz, resigned.

But the government has continued unabashed and claimed the credit for rising prosperity. Eugeniusz Smolar, president of Poland's Centre for International Relations, said that economic growth had been crucial for the Kaczynski twins. Despite early fears that the government would penalise foreign investors it is "not doing anything that would prevent Poland's economic growth", he said.

Source: By Stephen Castle,