VISEGRAD: PiS victory to pose more questions than answers for Poland

VISEGRAD: PiS victory to pose more questions than answers for Poland
By Wojciech Kość October 22, 2015

Were any current Polish government ministers in the prime minister’s office in Warsaw on the afternoon of October 22, they could have seen the future approaching. Three days before Poles will cast their votes in a general election, several thousand marched on government headquarters to voice their disapproval of the eight-year rule of Civic Platform (PO).

The crowd was led by coal miners, calling for Prime Minister Ewa Kopacz’s head over her failure to push through a rescue of the country’s mines. Smaller protests took place in 100 towns and cities in Poland, according to organisers.

“In Warsaw as well as in 100 other cities and town we want to say it loudly and directly to all Polish people: do not vote for the coalition of PO and PSL,” Dominik Kolorz, head of the trade union Solidarity in the mining hub Katowice, told reporters.

The mass demonstration is likely to seal the fate of PO. The result of the election has been all but set for months, and Poles have steadily become clearer and clearer that they don’t want the centre-right party to rule any more.

"PO is a party of people who are well off but they don't really know how people like myself live," Jadwiga Wilczynska, an unemployed mother of two at a local rally in Lodz province, tells bne IntelliNews.

The polls and bookies all agree the opposition Law & Justice will clearly trump PO to take the most seats in parliament. However, while the majority of Poles may now know what they don’t want, it’s less clear what they do.

“I just don't want to live in a country ruled by PiS," says Joanna Nowak, a teacher from Kalisz.

While PiS leads the polls comfortably, the populist party may not gain enough seats in the Sejm, to form a government on its own. No party ever has. However, apart from PO and PiS, most other contenders are nervously eyeing the 5% threshold to enter the lower house (8% for coalitions).

Gobble

On the one hand, the markets would like to see a coalition, fearing the actions of an unconstrained PiS government. However, the conservative party of Jaroslaw Kaczynski has a reputation for gobbling up coalition partners, while the parties most likely to join it look anything but stable.

“Whether PiS will win a majority in the Sejm in the end may also be determined by the success or failure of a few other smaller parties, whose voter support hovers around the 5%,” notes Jan Cermak at KBC.

Two anti-establishment parties - Kukiz’15 and KORWIN – look the top candidates to join a PiS coalition should they make it to the parliament. A government featuring one or or both would mean a pretty radical shift.

“In our view, this would be one of the most market-negative outcomes, associated with risks to fiscal discipline and possible pressure on the country’s long-term growth,” RBS analysts suggest.

At the same time, Kukiz’15 and KORWIN are both protest parties with little political structure, real policy, or experience in major politics. That would leave them vulnerable to a senior coalition partner known for its predisposition to gobble up junior partners. They may also be likely to implode under the pressure of governing.

A more stable partner for PiS would be the agrarian PSL party. That would likely see PiS let go of some of its more radical positions, and the current junior partner of PO has often proved it is happy to be flexible in order to remain in power in some format. However, PSL’s rural, conservative electorate could prove too close to PiS’ core support for comfort for the junior party.

The remaining scenario for a PiS government would see it take over 40% of the vote in order to win an outright majority. The markets appear to have come to terms with that picture, and many are starting to suggest the party will have learnt from its short tenure in 2005-07, and will moderate its policies.

"My post-election policy view [is] most big ticket economic policy ideas will not be implemented, and the rest will be watered down," PKO's Chief Economist Radolslaw Bodys tells bne IntelliNews. "The retirement age is unlikely to be reduced and the mega child benefit hike is unlikely to happen, but the banking and retail taxes are likely to ‎be implemented." 

The additional stability would also be a plus, suggest others, but may come at a cost. “An outright majority for PiS would inevitably bring a more stable government and a smoother decision-making process,” analysts at RBS note. “However, … an outright majority should in fact make it harder for PiS to back down on its election promises.”

During the party’s last big rally in Warsaw before the vote, PiS chairman Jaroslaw Kaczynski and PM appointee Beata Szydlo carefully avoided discussing the particulars of their campaign programme, stressing the need to “work together” instead. That indeed may be what PiS will to need to talk about as soon as exit polls start emerging on the evening of October 25.

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