SZCZECIN, Poland — In Communist times, no one was louder than Poland's famously feisty shipyard workers about the state's inability to provide a decent standard of living. So now it seems a cruel joke that, as the sparkle fades from the market economy, it is private enterprise that has failed them.
Since March, the Szczecin shipyard has been closed, and 6,000 workers have not been paid. When violence loomed, the government stepped in, announcing a plan in May that would, for the first time, renationalize a Polish company.
"It is certainly very abnormal," said Bogoslaw Rydzenski, 48, a worker. "No one could have predicted this."
These are hard times in Poland, which grew for nearly 10 straight years into a country of stocked shelves, giant malls and impressive self-confidence — a 40-million-strong symbol of Central Europe's post-Communist hopes.
Now, the will to continue privatization and other reforms, and even the desire to join the European Union, have flagged. The story is much the same around the region, as the transformation from gangly state economies has brought material comfort, but also insecurity and a new set of inequalities. In Poland, indeed, the very notion that Western-style capitalism will work in the eastern nation that embraced it perhaps most heartily is under attack.
"There is an apropos graffiti," Krzysztof Bledowski, an economist, said as he sat in a cafe in downtown Warsaw. He pointed across the street to a car parts shop, where someone had scrawled on a wall: "Free market, enslaved people."
"It's the spirit of the day," he said. "The mood has shifted. Capitalism is not seen by many people as a system for justice, growth, better times for kids and so on."
What is happening now is not economic collapse of the kind that engulfed Russia in the 1990's.
Many companies are doing well, and Poland appears set to move into the European Union in 2004. But there is a serious slowdown, compounded by what many experts say is political dawdling and disagreement about how to fix it.
Around the region, the cost to top leaders is high: Second terms here are rare, and experts say Poland's new coalition government, led by the socialist Democratic Left Alliance, will be no exception if it cannot reverse this downturn.
Last year, growth dropped to just 1 percent. Unemployment this year hit 18 percent, the highest in the post-Communist era, and there are real worries of street disturbances and protests in the largest nation up for joining the European Union, if more people lose their jobs.
This downturn, Mr. Bledowski said, is "causing a lot of soul searching. People are revising a lot of assumptions and expectations."
Some experts worry that the problems at the shipyard in Szczecin (pronounced SHTESH-een), once the German Stettin, may usher in an era of greater economic control by the state. Although the center-left government elected last year says Szczecin is a singular case, there are already calls for intervention over a Daewoo car plant that went bankrupt this year and where angry workers are staging a hunger strike.
"There is a queue of other potential bankruptcies, and it worries me," said Hubert A. Janiszewski, managing director of Deutsche Bank in Poland.
Unlike many other former Soviet bloc states, whose economies alternately surged and faltered, Poland's trajectory since the early 1990's has been largely up. Economic growth in the mid-1990's hit 7 percent. Unemployment dipped for a time to below 10 percent. Foreign investment flooded in. "People felt you could throw in a little money and watch it expand into enormous piles of cash," said Tony Housh, the former leader of the American Chamber of Commerce in Warsaw.
But Poland remained two nations economically. Cities, especially Warsaw, prospered, as poverty ground on in the countryside, especially on the many inefficient farms. Many large- and medium-size private business did well, more or less masking big problems in overstaffed nationalized companies, in coal mining, steel and chemical production.
Then in 2000 and 2001, the world economy turned, especially that of Poland's main trading partner, Germany. Monetary policies, aimed at staving off inflation, kept the national currency, the zloty, strong and interest rates high. Unemployment surged as companies, feeling the pinch of reduced demand, shed workers. Reduced tax receipts and increased spending by the old government during the elections last September ratcheted up the budget deficit to crisis levels.
In the disillusionment with the new economy and the mainstream parties of both right and left, fringe parties, particularly Self Defense, led by a radical populist, Andrzej Lepper, have surged.
Mr. Lepper talks often about a middle road between communism and capitalism, greater state protections over the free market — a notion that appeals these days to many Poles and resonates especially here in Szczecin. Many shipyard workers say private management drove the company into the ground.
"Polish yuppies!" spat out Janusz Gajek, a 43-year-old worker here who led worker protests after the plant here closed in March. A fellow protest organizer, Roman Nizurski, 46, added: "What about the rest of us? The relationship between managers and workers has been broken."
Poor management decisions, in fact, are often cited as a reason for the shipyard's problems. But there are others: a downturn in the worldwide shipbuilding market; the strong zloty, which increases the prices of ships; problems with a new prototype tanker. In March, banks simply stopped extending credit.
Many workers say they are not happy with the state plans to insert itself again into the shipyard — after all, it was the Solidarity trade union in the Baltic shipyards that led the fight against communism in the 1980's. Equally, they know there is no other choice to save their jobs.
"We know this is some kind of temporary salvation," said Mr. Gajek. "A rope has been thrown."
Mr. Janiszewski, of Deutsche Bank, sees a major problem in state intervention because, he said, "the government has no guts to reverse the situation in a decisive way."
Reducing the deficit and privatizing the big industries still under state control means taking on the powerful unions and making more job cuts at a time when high unemployment has become a real political liability.
Government officials declined repeated requests for interviews.
But Stanislaw Gomulka, a prominent economist who advises the finance minister, contended that the present government inherited many economic problems from the previous administration, while acknowledging that Prime Minister Leszek Miller and his team have been slow to impose their own reforms.
"The government is a little bit afraid that if it imposes radical laws that are opposed by the trade unions that we will have street fights, demonstrations, large political fights," said Mr. Gomulka, a professor at the London School of Economics who has advised governments in Poland since 1989. That, he said, could strengthen populists like Mr. Lepper even more. "They want to see if a consensus can be reached."
Mr. Gomulka predicted that reforms — cutting taxes, easing bureaucratic burdens on vital small and medium-size enterprises — will come. Poland, he said, remains strong in its foundations, an opinion shared by many economists and business executives.
William V. Carey, a former golf professional from Florida, came to Poland in 1991 to explore exporting Polish agriculture. With a quick look around at the empty shop shelves, he decided it might be better to bring in goods instead. Starting simply by importing Fosters' beer — before the Polish beer industry, like so many others, took off — he slowly built his company into the nation's largest distributor of beer, wine and spirits.
His company is flourishing, and he remains optimistic, despite Poland's backward bureaucracy, poor roads (of special concern to a distribution company), and the downturn.
"It is quite a remarkable success," said Mr. Carey, now 37, sitting in the new Warsaw headquarters of his business, the Central European Distribution Corporation. "I viewed Poland as 40 years behind when I got here, and it is just a few years behind now."
But, he said, Poland's new business class is learning a rough lesson from the downturn: "That there is a lot more to running a company than just getting it up. It is a lot of sweat to get it into progressive growth — not just to do well when the economy is growing."