WARSAW, JULY 13 -- Poland surged ahead of the pack of reform governments in Eastern Europe today as the main chamber of its legislature passed a landmark bill to sell state-owned industry to private investors.
Finance Minister Leszek Balcerowicz said the privatization bill, which applies to 7,600 state enterprises making up 80 percent of the national economy, "is going to change the Polish economy more radically than anything done up to now."
"Nobody has ever faced an undertaking on a scale as huge as this," Balcerowicz told legislators when he introduced the bill. "We must transform ownership faster than any nation has done before."
The bill is the centerpiece of the Solidarity-led government's plan to restructure the centrally planned socialist economy along Western free-market lines. Its passage marks a much-needed victory for government leaders, who recently have been accused by Solidarity union leader Lech Walesa of offering Poles little more than economic hardship.
Austerity measures in the first six months of the year have ended hyper-inflation, but at a higher than predicted social price. The country is mired in a recession that has cut economic activity by 30 percent. Unemployment, which did not officially exist before this year, has soared. At the end of June, 570,000 people, or 4.2 percent of the work force, were jobless, and that figure is expected to double by year's end.
The privatization bill, after surprisingly little debate, was approved overwhelmingly by the Sejm or lower house. The vote was 328 to 2 with 39 abstentions, as former Communists and independent lawmakers voted with the Solidarity caucus. Approval by the Solidarity-dominated Senate is expected to be a formality.
The bill had been bogged down in committee for more than three months as the government wrestled with workers' demands that they be granted the right to own shares in the companies that employ them.
There were also widespread fears among Poles that privatization could lead to an uncontrolled, bargain-priced sell-off of Polish industry to foreigners.
The compromise that overcame those concerns gives workers a chance to buy up to 20 percent of their companies' shares at half the market price. The legislation also offers them low-interest loans for buying stock.
Workers had demanded far more generous concessions. Some had argued that all company stock be handed over to employees. But Balcerowicz insisted that worker ownership is a dangerous idea that would keep Poland from joining the economic mainstream of Western Europe. He also said it was an unfair way to divide up the country's wealth.
"It would be wrong to go beyond the range of preferential terms set out in the bill because such a policy would eventually create excessive differences between the work force of privatized enterprises and other social groups, such as farmers, teachers or health service workers," Balcerowicz told the Sejm.
The bill passed today borrows a concept that was first publicized several months ago as a reform option in Czechoslovakia. It grants every adult Pole a certificate that can be exchanged for free shares of stock in any privatized industry or business. The value of those shares has not yet been determined.
In order to address fears about foreign ownership, the bill requires government approval for outside investors to buy more than 10 percent of any Polish company. In a recent interview, a senor official at the Finance Ministry said the government would grant such permission with a minimum of red tape -- if foreign ownership of a company did not threaten the national interest.
To help win worker support for privatization, Balcerowicz said, the government intends to exempt privatized companies from strict government controls on wages. Wage controls in the past six months have caused a 40 percent drop in buying power for the average Pole.
Under the bill passed today, as state enterprises come up for privatization, they will become corporations wholly owned by the state treasury. The government will then assess the value of the enterprise and issue shares of company stock.
An official at the Finance Ministry said recently that the Polish government has been monitoring prices charged in Hungary for state-owned property sold to foreigners. Those sales took place under an ad hoc policy under the previous, Communist-controlled government. The official said prices for some Hungarian companies were far too low and added that Poland will enlist local and foreign experts in an attempt to find fair market prices for what it sells.