bne:Chart - Election countdown in CEE/CIS

By bne IntelliNews October 9, 2015

Henry Kirby in London -


By the end of November, five nations stretching from Central Europe to the Caucasus will have taken to the polling booths.  bne IntelliNews takes a look at the likely outcome and implications of the elections in Poland, Croatia, Belarus, Turkey and Azerbaijan.

Poland set for shift to the right

Despite its poll lead shrinking in recent weeks, Poland's Law and Justice (PiS) party still looks likely to win the country's parliamentary election on October 25. The most recent poll gave the socially conservative PiS a 10-percentage-point (pp) lead over the incumbent Civic Platform (PO) party - a gap that has at times been as wide as 25pp.

Jaroslaw Kaczynski, who served as prime minister in 2006-2007, remains the head of the party, but decided not to run in the election in favour of Beata Szydlo, a less divisive figure - a decision most likely prompted by the moderate Andrzej Duda’s victory for PiS in May’s presidential election.

PiS's orientation is socially conservative, economically leftwing, and hawkish in its global outlook.  

PiS plan to lower the retirement age, raise the tax-free earnings threshold and increase the budget for child benefits - all of which they propose to fund with a tax on transactions in the banking sector. Adam Czerniak, chief economist at Warsaw-based think thank Polityka Insight, describes their proposed fiscal looseness as “devastating for public finances”.

Battle of populist politics in Croatia 

In the run-up to November’s general election, Croatia’s ruling centre-left Hrvatska Raste (formerly Kukuriku) coalition is trailing a nationalist coalition led by the conservative HDZ party by 3.9 percentage points. Most observers suggest that the Croatian economy's first positive growth in seven years will not be enough to tip the balance in its favour by the time polls open.

Prime Minister Zoran Milanović’s Social Democratic Party (SDP)  appears to have taken heed of these concerns, and the noticeably more populist tone to its rhetoric in recent weeks is likely an attempt to poach some of HDZ’s support.

Decisions such as that to close Croatia’s border with Serbia during the ongoing migrant crisis could swing public opinion back toward Hrvartska Raste. Additionally, since the most recent polls were conducted, the government has also approved a law allowing the conversion of Swiss franc-denominated loans into the domestic kuna, which could drum up further support for Milanovic.

Lukashenko bends to the West

Despite what may turn out to be Belarus’ freest presidential election under Alexander Lukashenko, the electorate of the former Soviet republic looks likely to stick with the status quo on October 11, if recent polls are anything to go by.

Having led Belarus for 21 years, winning four elections by questionable landslides in the process, Lukashenko has agreed to allow election observers from the Organisation for Security and Cooperation in Europe (OSCE) to oversee this year’s proceedings.

Lukashenko’s popularity is currently sitting at 38.6%, far shy of the supposed 79% of the vote that won him the 2010 election, but miles ahead of his closest rival, Mikola Statkevich, the recently freed political prisoner and vocal opponent of Lukashenko’s regime, who scored just 6.5%.

Moves such as Lukashenko’s decision to release a number of political prisoners in August have been interpreted by many as a sign of a shift in attitude by the authoritarian regime, paving the way for political and structural reforms and a boost in bilateral trade with the EU. More important to Lukashenko, though, is the $3.5bn of much-needed International Monetary Fund cash that a genuine effort toward liberalisation would likely unlock.

While Lukashenko bends to the allure of Western financing, the electorate appears to be looking the other way, with favourable views of Russia a pervasive theme of a June poll by the Independent Institute of Socio-Economic and Political Studies (IISEPS).

Over six in 10 respondents deemed Russia’s annexation of Crimea to be "a restitution of Russian lands and reestablishment of historical justice", while 52.8% of Belarusians polled said they would quickly “adapt to [the] new situation” if Russia were to annex Belarus.


Turkey braced for another parliamentary stalemate

If the latest polls coming out of Turkey are to be believed, then November’s snap election is looking likely to produce yet another hung parliament, putting an end to President Recep Erdogan’s hopes of an AKP super majority that he would use to grant himself executive powers.

In June’s general election the pro-Kurdish HDP party won an unexpected 80 of the Turkish National Assembly’s 550 seats, comfortably clearing the 10% threshold required for parliamentary representation. As things stand, they are on track to do the same again in November, with none of the four main parties polling more than a percentage point higher or lower than the share of the popular vote they achieved three months ago.

After failing to secure a single party majority in June’s parliamentary election, AKP aimed to exploit security concerns following clashes between the Kurdistan Workers’ Party (PKK) and the Turkish military by announcing fresh elections in November. Escalating violence in the country’s Kurdish eastern and southeastern provinces has already killed more than 100 security personnel and hundreds of insurgents, after a two-year ceasefire with the PKK collapsed in July.

Beyond Erdogan’s bid to turn Turkey into a presidential state, the November election could mark a turning point for Southeast Europe’s biggest economy, which has been struggling for several months, with the country’s consumer confidence index hitting a record low of 58.5 in September.

Finansbank’s chief economist, Inan Demir, stressed the need for a stable government if Turkey is to remain a viable investment destination. “If the election result is the same as June, most investors would be wary about the prospect of renewed elections or some form of conflict between Erdogan and the incoming government,” he said.

A preferable situation, Demir said, would be a “small AKP majority, putting paid to questions about how the government would be formed”.


All bets are off in Azeri election

The November election in President Ilham Aliyev’s Azerbaijan has been written off as a farce by many international observers before it has even taken place.

Power in the oil- and gas-rich Caucasus country has been held in the hands of the Aliyev family since the former-Soviet nation of nine million held its first post-USSR elections in the early 1990s. And as the chart below suggests, this has shown no sign of changing at any point since then.

As of May this year, nearly 100 political prisoners are being held in Azerbaijan under a regime of repression that a recent European Parliament resolution described as an "ongoing crackdown on civil society and independent voices” in Azerbaijan.

“It is very simple,” says Gerald Knaus, chairman of the European Stability Initiative (ESI), a Berlin-based think tank, “there are no preconditions for free elections [in Azerbaijan]. They have not held fair elections any time in the last 10 years and the conditions have actually got significantly worse in the last two,” he tells bne IntelliNews.

The parliamentary election, scheduled for November 1, is widely-regarded as a foregone conclusion, with Aliyev’s New Azerbaijan Party taking 61 of the National Assembly’s 125 seats in 2005 and 72 in 2010. These seemingly meagre 2005 and 2010 results are bolstered by the independent assembly members - 45 in 2010 - that “pay huge sums of money to be in parliament", according to Mr. Knaus. "Looking at the records in parliament, you’ll see that they are the most enthusiastic supporters of the policies of the president,” he added.

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