Snap Polish elections seen unlikely even as PM raises possibility

By bne IntelliNews June 20, 2014

Jan Cienski in Warsaw -

 

 

Donald Tusk is mulling the nuclear option – calling early elections that his party could easily lose – as the Polish prime minister scrambles to put a lid on an exploding wire-tapping scandal that has embroiled senior officials in his administration and created the danger of political and economic instability. Pundits still regard such polls as a long shot.

The illegal recording, published by the Wprost news weekly on June 14, appears to show Bartlomiej Sienkiewicz, the interior minister, in an obscenity-laced conversation with central bank chief Marek Belka about how the central bank could prop up the economy if Tusk's Civic Platform party looks to be in danger of losing next year's parliamentary elections.

Earlier this week, Tusk tried to brazen out the affair, focusing on the rude language used by the two and dodging the issue of what they were talking about. This is also a big problem for Belka, who is supposed to be an apolitical appointee and not involve himself in helping parties win elections.

But the scandal has refused to die. The opposition is baying for Sienkiewicz's head and is calling for the creation of a technical government to take Tusk's place. Wprost also has more recordings, which promises to turn into a long series of corrosive revelations about Tusk's top team. On the evening of June 18, a clumsy attempt by the authorities to get their hands on the recordings led to a physical tussle with Wprost's editor, and turned the normally pro-Tusk Polish media strongly against the prime minister. The OSCE also expressed its displeasure at the development.

Tusk denounced the recordings – no one is quite sure who actually bugged the politicians – and called on Wprost to quickly publish what was still left. “If this crisis of confidence is too deep, a solution could be early elections,” Tusk told reporters on the morning of June 19.

Wprost's editor said in a June 20 interview with the Gazeta Wyborcza newspaper that he has no recording in addition to the two already published, but that he does know that more were made and promised to his magazine.

Still, the odds of an early vote are quite low. Tusk and his coalition allies from the Polish People's Party control 234 votes in the 460-member legislature. Civic Platform has also been losing ground in recent opinion polls against the opposition Law and Justice party, so any early vote raises the possibility of Tusk losing power. However, Tusk has to work hard to keep his junior coalition partners on side.

Belka is also hanging tough, receiving a lukewarm endorsement form the interest-rate setting Monetary Policy Council earlier this week despite his cruel mocking of some of that body's members during his chat with Sienkiewicz. Belka, a respected central banker and former prime minister and finance minister, cannot easily be removed, although Bronislaw Komorowski, the president, could request that he go – something he has yet to do.

However, the central bank governor's position is still in danger. Andrzej Rzonca, a member of the MPC and a disciple of Leszek Balcerowicz, the architect of Poland's economic 1989 economic reforms, warned Belka's actions could have hurt the bank's credibility. “If the governor, despite what he now says, did get involved politically, that disqualifies him as head of the MPC,” he said.

Tim Ash of Standard Bank calls Rzonca's comments “striking”. “I guess it was always known that Belka had his fans and foes on the MPC, but these strains are likely now airing through this crisis,” he writes.

Sienkiewicz himself, though, appears to be in much more danger than at the beginning of the week, when Tusk expressed confidence in his interior minister. Later Tusk qualified that, saying he would make an assessment by the beginning of next week as to whether Sienkiewicz can continue.

Most analysts still feel that the crisis will eventually die down and, after making a few high level dismissals, Tusk's government will continue in office. “We believe that the release of the transcript constitutes a transitory domestic shock to political stability, but is unlikely to undermine the strengthening economic recovery.,” writes Jamie Reusche of Moody's Investors Service, the rating agency.

While Simon Quijano-Evans of Commerzbank writes, “The Polish financial system is in a strong position to withstand these sort of developments, but an early election scenario would be taken badly by markets.”

 

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