Poland's new treasury minister discards power sector consolidation plan

By bne IntelliNews June 17, 2015

bne IntelliNews -

 

Poland's new treasury minister announced on June 17 that he will shelve plans to consolidate the power sector. At the same time, he promised to push forward projects to improve energy security and "repolonise" the banking sector - all elements in the government's populist push ahead of October elections. 

 Appointed the previous day to replace Wlodzimierz Karpinski, who quit alongside several other senior members of the Civic Platform (PO) government in early June, Andrzej Czerwinski said he would not push through the merger of PGE, Tauron, Enea and Energia, which his predecessor had put forward last year. The treasury manages Poland's stakes in the country's large and powerful "national champions". 

Indeed, Czerwinski insisted he will make no radical moves in an election year, but will focus on carrying out important ongoing undertakings instead. PO is struggling in the polls following a startling collapse in support this year, which was only antagonised by the resurrection of the "Waitergate" scandal in recent weeks. 

It lags the populist Law and Justice (PiS) badly in opinion polls just four months ahead of general elections. That has the centre-right party adjusting policy. The planned consolidation of the power sector had provoked no little anger amongst unions. 

"There is too little time to the end of term to prepare a long-term strategy, but there is enough time to continue a certain program or implement tasks prepared thus far," Czerwinski told TVN24 BiS television. 

Those "tasks" include delivery of Poland's first LNG terminal - which is a major element in Warsaw's efforts to improve energy security and reduce reliance on Russia. The restructuring of the Polish coal mining sector, the government having caved into the unions on a tougher plan in January - is another. 

Czerwinski also spoke of continuing work on Poland's first nuclear power plant, building a competitive power sector market, and the privatisation of flag carrier Polish LOT Airlines. The minister also suggested the state should discuss a list of strategic companies that should not be privatised, such as power grid operators. 

The new minister also said he supports the plans of PZU to build a new banking giant. The recent push by the state-controlled insurer appears yet another reversal in policy by the previously market friendly PO as it seeks to shore up support. 

The banking sector is a major target of recent populist calls for raised taxes on certain - mostly foreign-owned - sectors. The opposition has also called for lenders to be forced to help borrowers of forex loans, which have seen their installments spike this year. 

"Supporting banks to some extent, strengthening their position on our market in a context of the financial competition in Europe and in the world is a positive step," Czerwinski told radio TOK FM. 

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