OUTLOOK 2024 Poland

OUTLOOK 2024 Poland
/ bne IntelliNews
By Wojciech Kosc in Warsaw January 24, 2024

Poland is in for a year even more tumultuous than 2023, as the new government headed by Donald Tusk will attempt a number of ambitious reforms, some of which at least will be torpedoed by President Andrzej Duda, a staunch ally of the formerly ruling Law and Justice (PiS) party.

The cohabitation of Tusk and Duda will last until mid-2025, when the next presidential election is held in which Duda cannot stand after completing two terms in office.

At home, the Tusk government will likely preside over a period of renewed economic growth, which, however, could sputter – or at least not fulfill its potential – if Duda and PiS manage to thwart changes and/or if the geopolitical situation worsens.

Internationally, Poland remains in the hot seat as one of the EU’s big member states exposed via its geographical location next to Russia at war with neighbouring Ukraine, Russia’s ally Belarus and Ukraine itself. Tusk’s ascent to power will, however, make Poland end its isolation in the bloc– even though new challenges will be quick to emerge.

One of those challenges will be Ukraine’s prospect of becoming a new EU member state, which will likely kick-start a major debate in Poland, especially over Ukraine’s agricultural might. Poland will want to seek concessions and otherwise influence the shape of post-Ukraine agricultural policy in a process that is due to begin in 2024, even if Kyiv’s actual membership is still years away.

Politics

Poland entered a period of prolonged political struggle on the night of October 15 when the results of the election were announced, showing that the era of right-wing radicals from Law and Justice (PiS) is over.

A four-party liberal-left coalition led by Prime Minister Donald Tusk took over in mid-December – only after PiS exhausted all legal possibilities to delay the transition of power – and was immediately faced with the chaos PiS had left. Moreover, it was also faced with the PiS-friendly President Andrzej Duda guarding it.

Early in 2024, the political outlook is that the new government is struggling to push through key reforms against a hostile president and the still strong PiS, which are stopping at virtually nothing to discredit Tusk and his cabinet.

Arguably the key reform that Tusk has undertaken is rolling back the hugely controversial changes in the judiciary that PiS had implemented while in power.

That met fierce resistance from Duda and the PiS-engineered Constitutional Tribunal and other institutions where PiS had planted loyalists, such as the National Public Prosecutor’s Office. Attempts by the government to “restore rule of law” were openly sabotaged by Duda and others from the PiS’ camp, threatening to make the government and the biggest opposition party follow separate legal orders.

That will likely be the political picture in Poland throughout 2024 and for a large part of 2025, which is when Duda will step down after his second – and last – term runs its course.

Before that happens, however, Duda appears more likely than not to derail key government initiatives in a strategy to make Tusk ineffective and prone to lose support ahead of the next election in 2027.

In an extreme scenario – although the one currently still considered unlikely – Duda unleashes a crisis early in 2024 by sending the Tusk government’s budget bill for a review by the PiS-loyal Constitutional Tribunal. As the Tribunal takes its time, the deadline for submitting a budget bill expires, giving Duda a pretext to cut the new parliament’s term short and announce a snap election.

Snap election notwithstanding, there are several reforms – economic or otherwise – planned by the coalition government, such as reinstating Sunday shopping, increasing the tax-free part of income and keeping the social programme of monthly child benefits of PLN800 (€183).

The new government is also expected to support the development of the capital market in Poland. The pro-market approach assumes that the stock market should become one of Poland's economic growth drivers by increasing the market's role in financing the economy.

The new government will also push harder for a clean energy transition, supported by inflows of EU funds. The government pledged to free up the development of wind power and vowed to continue PiS’ programme of building Poland’s first nuclear power plant.

Among not strictly economic undertakings, the Tusk administration prioritises huge pay increases for teachers and the public sector, liberalising access to “day after” contraception pills and to abortion, and improving the state of the environment.

The likely bumpy ride of the government against PiS’ “deep state” will take place in the context of two elections, both happening in the first half of 2024. Local elections – scheduled for April – will precede the EU vote in June.

Both votes will be used by the government to affirm its position ahead of the 2025 presidential election and put PiS on to the defensive. For PiS, they will be the first opportunity since October to apply pressure on the government but also to assess its own standing after losing power. 

On the international arena, the situation appears simpler. The Tusk government has been clearly welcomed in Brussels as a guarantor of ending Poland’s isolation in the bloc and his election promises a more constructive cooperation on the EU’s key policies such as the climate or migration. Tusk’s stint at the helm of the European Council in the first half of 2025 will most likely help.

On the other hand, Poland remains in a tight geopolitical spot. A Poland without bitter political infighting is crucial to European security, as the West becomes more and more wary that it will have to face Russia following any resolution to the Russia-Ukraine war.

 

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