Poland's most right-wing government since the early 1920s did not get off to a flying start. From the outset, it was heavily divided by disputes over economic policy - the Centre Alliance, including Olszewski himself, and the Peasants' Agreement sought a significant shift away from Balcerowicz's liberal policies, while the Real Politics Union demanded even more deregulation and privatisation than Balcerowicz had been willing to provide. The Union's leader, Janusz Korwin-Mikke advocated swift action to balance the budget, while the Confederation for an Independent Poland was open to more deficit spending and seemed obsessed with the idea of solving Poland's economic woes by simply printing money. In the end, the government would pursue a fairly moderate economic policy which moved away from some aspects of Balcerowicz's plans but maintained a similar direction, which satisfied neither doctrinaire liberals nor more statist conservatives and would eventually lead to the resignation of Finance Minister Karol Lutkowski, a firm monetarist. The new Finance Minister, Walesa loyalist Andrzej Olechowski, was just as intent on sticking to liberal policies as his predecessor. The only real change came in the area of privatisation, which the Olszewski cabinet slowed down considerably to prevent what it saw as corruption perverting the process. This once again disappointed the Real Politics Union. As it turned out, none of the parties represented in the government had any idea what they intended to do once in government, and their lack of a majority in the Sejm did not exactly encourage them to undertake major reforms. Olszewski made token efforts to integrate the Democratic Union and the Liberal Democratic Congress into the coalition, but neither side was truly interested as they disagreed strongly on far too many issues.
The government had other issues too - it had very little support in the media, and it was in a state of perpetual conflict with the President who sought its downfall. It attracted strong criticism for the activities of the new Minister of National Defence, Leszek Moczulski. Moczulski's nomination (which Olszewski only reluctantly agreed to in order to keep Moczulski's Confederation from walking out and bringing coalition talks to a screeching halt) was met with extreme apprehension in the Polish army, whose upper echelons saw the new Minister as dangerously incompetent. Moczulski's activities as Minister mainly consisted of promoting his Intermarium (Miedzymorze) concept of a security-oriented alliance of Central and East European nations, and making bombastic speeches inviting officers he described as pro-Russian to retire. His few real proposals on military doctrine were seen as deeply misguided by the army, and he didn't help matters when he described a People's Party MP who tried to question him in the Sejm as a 'traitor on the Russians' payroll'. Moczulski's policies played well with the Confederation's radically anti-communist voters, but not so well with anyone else, least of all the Real Politics Union which saw Russia as a potential ally and didn't particularly care for NATO membership (which Olszewski and Moczulski also strongly advocated) or Intermarium, the People's Party whose votes the Olszewski government was dependent on to pass legislation and which didn't appreciate being described as traitors, or President Walesa who felt threatened by Moczulski's attempts to replace high-ranking officers without consulting him. Calls rose for Moczulski's resignation, but Olszewski, fearing the collapse of his government, ignored them. And to make matters worse, Olszewski was now fighting with the leader of his own party, Jaroslaw Kaczynski, due to Olszewski's tendency to ignore Kaczynski's recommendations when choosing the members of his cabinet. Kaczynski suspected Olszewski of wanting to take over the Centre Alliance, while Olszewski feared that the poor relations between Kaczynski and Walesa could destabilise the government if Kaczynski had too much influence over it. All this in-fighting led to the Christian National Union which, while quite far to the right, could actually pass as moderate next to the likes of Moczulski and Korwin-Mikke, gaining much more influence over government policy than its size would imply. (The Party of Christian Democrats, due to its small size, did not matter very much either way.)
Olszewski also had to face up to public discontent regarding the direction and pace of economic reforms. On January 13, Solidarity held an hour-long warning strike to protest a rise in energy prices. The radical farmers' union Self-Defense, lead by Andrzej Lepper, gained much media attention with its illegal occupation of the Ministry of Agriculture, demanding that loans its members had taken out and were subsequently unable to repay be written off. Olszewski spent two weeks engaging in useless negotiations with Lepper, which the media, generally hostile or ambivalent at best to the government. seized upon as proof of the Prime Minister's weakness. President Walesa chose to deliberately undermine the government by inviting Lepper to the Belweder Palace, the official presidential residence, and promising that the interest on the loans would be significantly reduced. (Walesa, of course, had no authority to promise such a thing) Lepper left heartened by Walesa's promise, ending the occupation but also pledging to continue to fight the 'lawless state', with armed force if necessary. Self-Defense would continue to be a major headache for governments of all stripes for some time.
If they disagreed on economic and foreign policy, the government parties could agree on one thing – decommunisation. The government took legal steps to claw back some of the assets of the former Polish United Workers' Party which had been illegally taken over by the Democratic Left, including money and party cars. The Democratic Left filed a complaint with the Constitutional Tribunal, arguing that the government was trying to cripple its opposition, but in the end, it would go nowhere. Meanwhile, Antoni Macierewicz, the Minister for Internal Affairs, began making preparations to establish a list of government officials who had had ties with the Communist security services.
Relations between President Walesa and the government worsened again during the negotiation of the treaty of friendship and co-operation between Poland and the Russian Federation. As far as the government was concerned, Walesa was giving up too much to the Russians. The main sticking point was the withdrawal of Russian troops from Poland – the Russians had proposed that former Soviet military bases be handed over to jointly-owned Polish-Russian companies, a concession Walesa was ready to accept in order to get Russian troops out of the country as soon as possible, but which the Olszewski government saw as unacceptable because of the risk of the companies being used as fronts by Russian intelligence. The President tried to sign the agreement anyway in spite of the government's strong opposition, and his spokesman publicly claimed during a press conference on May 21, the day Walesa was due to set off to Moscow to sign the treaty, that Olszewski had withdrawn his objections. Olszewski responded by sending an encrypted message directly to Walesa restating the government's position. After private discussion between Walesa and Russian President Boris Yeltsin, the proposal was withdrawn by the Russians, and the treaty was signed. Walesa later publicly denounced what he saw as the government's 'irresponsible behaviour', claiming he had only received Olszewski's message two hours before he was to meet Yeltsin and that his supposed intransigence could have sunk the treaty altogether. Three days after returning from Moscow, Walesa sent a letter to the Marshal of the Sejm, Wieslaw Chrzanowski, informing him that he had lost all trust in the government and could no longer support any of its policies. But the blow that would finally bring down the floundering Olszewski government would come from within, not without.
On May 28, Janusz Korwin-Mikke proposed that the Sejm adopt a resolution demanding the Ministry of Internal Affairs establish a list of government officials who had worked with the Communist security services between 1945 and 1990. Despite the Democratic Union and the Liberal Democrats (both of whom opposed the measure) boycotting the vote, the resolution passed, and Antoni Macierewicz had an excuse to do what he had been planning for months. (Some later speculated that Korwin-Mikke and Macierewicz were working together, which both denied and continue to deny to this day.) The very next day, a group of 68 MPs from the Democratic Union, the Liberal Democratic Congress, the Polish Economic Program (a splinter group of 13 pro-business MPs who had somehow gotten themselves elected as Beer-Lovers' Party candidates), and the small Democratic Party moved for a vote of no confidence in the Olszewski government, citing Olszewski's failure to move forward with economic reform. The motion had been planned in advance, before Korwin-Mikke proposed his resolution, but the parties of the 'little coalition', as the alliance had become known, were generally opposed to what they saw as a witchhunt that had a strong chance of implicating innocent people and would damage efforts at reconcilation in democratic Poland. The vote of no confidence was scheduled for June 5, and the Olszewski government believed they had a strong chance of surviving it, as long as they could keep the People's Party and Solidarity on-side. (The Socialists having given up on supporting the government once it turned out that it had no intention of breaking with the liberal consensus on economics) However, two events would occur that would make the collapse of the Olszewski government inevitable.
First of all, the leadership of the People's Party decided to make a deal with the President and the 'little coalition'. Under this deal, the People's Party would vote to bring down the government, in exchange for their leader, Waldemar Pawlak, becoming Prime Minister in the next government. On June 3, Lech Walesa invited Pawlak to the Belweder Palace to officially invite him to become Prime Minister.
The second event occurred the very next day, when on the morning of June 4, Macierewicz presented a list containing 64 names, including 4 sitting ministers of his own government, 8 deputy ministers, 38 MPs, 11 senators, and 3 officials in the Chancellery of the President, to the heads of all the parliamentary groups in the Sejm, and a second list to the President, the Marshals of the Sejm and Senate, the First President of the Supreme Court and the President of the Constitutional Tribunal. The most notable name on the list was Leszek Moczulski, the Minister of National Defense. This second list contained just two names – Lech Walesa himself and Wieslaw Chrzanowski, who apart from being Marshal of the Sejm, was also the leader of Macierewicz's own Christian National Union. Macierewicz refused to publicly confirm who was on the list pending verification by a special parliamentary committee, but this would prove moot as the names were immediately leaked to the press by Korwin-Mikke himself. A flurry of denials erupted, as President Walesa sent out a press release condemning Macierewicz's actions. Meanwhile, Leszek Moczulski resigned as Minister of National Defense and had his Confederation walk out of the coalition, upset with what he termed as 'lies and betrayal' on the part of Macierewicz.
After all that, the result of the vote of no confidence was a foregone conclusion. The supporters of the Olszewski government could only resort to delaying tactics, but in the end, the motion passed overwhelmingly. Waldemar Pawlak was soon appointed Prime Minister by Walesa, and coalition negotiations began once again, centred around the 'little coalition', the People's Party, and the Confederation.
