Poland’s Law and Justice party will have to wait for the final vote tallies before deciding whether to seek a formal political partner after crushing the incumbent pro-EU government in elections on Sunday. But as Ciara Lee reports, markets are already bracing for a promised bank assets tax.
Poland’s lurch to right irks investors
Poland’s eurosceptic Law and Justice party, or PiS, claims victory in this weekend’s watershed election.
But it will have to wait for the final vote tallies to discover whether it can rule alone or will need a formal coalition partner.
Either way it signals a policy shift for Central Europe’s largest economy.
PiS promises new benefits and taxes on banks and supermarkets – putting the country on something of a collision course with some EU allies, particularly Germany’s Angela Merkel.
IHS Global Insight’s Jan Randolph.
(SOUNDBITE) (English) JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK ANALYSIS, IHS GLOBAL INSIGHT
“Whether that’s to do with refugees or co-operation on environmental energy. I think the difficulty will be in those areas. I think Poland will basically prevent any progress from happening, at the same time it won’t scupper these plans, and at the same time it will hold the line on Russia and Ukraine, I think, so that’s really the only positive really out of it.”
Shares in some of Poland’s biggest banks fell sharply on Monday
Falls in Poland’s zloty currency were modest though – reflecting predictions that PiS would win .
Analyst Andrzej Bobinski from the think tank Polityka Insight.
(SOUNDBITE) (English) ECONOMIC ANALYST AT THINK TANK POLITYKA INSIGHT, ANDRZEJ BOBINSKI, SAYING:
“The banking sector is saying that this will slash their profits, looking at predictions for this year, at least by half if this 0.39 tax would be imposed.”
And that could impact foreign investment too.
Poland has seen its economy expand by nearly 50 percent in the last decade.
But PiS has no plans to join the euro, it doesn’t trust the EU and favours a strong stance over dealings with Moscow.
Pockets of poverty also remain, and PiS has benefitted from a growing frustration that Poland’s success has not been evenly shared.