Poland’s mounting conflict between nationalist President Karol Nawrocki and pro-EU Prime Minister Donald Tusk is paralysing governance and undermining credibility abroad.

The divide was thrown into sharp relief last week, when Nawrocki met US President Donald Trump at the White House, securing the latter’s assurances of a continued, or possibly even enlarged, US troop presence. 

For Nawrocki, who campaigned with explicit support from Trump’s political base, Trump’s promise - however flaky it might turn out eventually - showcased his foreign policy ambitions, underpinned by his political camp’s strategy of winning power in 2027, the year of the next general election. 

The Washington optics contrasted sharply with domestic turmoil, which - despite apparent accord across the political spectrum that Nawrocki’s Washington trip was a success - is already damaging Poland’s standing in Europe and spooking investors.

Make Poland Great Again

Nawrocki, inaugurated on August 6, has pursued a broad “Poland first” agenda, accentuating opposition to migration, declaring he would demand war reparations from Germany, and ruling out support for Ukraine’s Nato drive. On the home front, he has ruled out new taxation and reforms to further cultural changes, such as more rights to the LGBT people (with the Tusk government also deeply divided on the issue).

Tusk, who returned to office two years ago on a pro-EU platform and whose party deputy narrowly missed on defeating Nawrocki in June, is facing an opposed president who is ready to derail the government’s agenda by vetoing key legislation, which the prime minister-led majority lacks votes to override.

That has set the scene ready for two years of intense political power struggle that threatens stabilisation in the wake of paralysed legislative and “two foreign policies”, as Nawrocki’s camp claims it is exclusively fitted to handle Trump.

In that vein, the foreign ministry was excluded from preparations to Nawrocki’s visit in the White House while the ministry’s briefing for the president was first leaked to the media and disparaged by the president’s officials as useless dilettantism. 

Adam Bielan, one of Nawrocki’s aides, went as far as to state neither Tusk nor Foreign Minister Radosław Sikorski are welcomed in Washington.

“I don’t think Donald Tusk has entry to the White House. He is a persona non grata,” Bielan said. “Radosław Sikorski is certainly well known at the White House and a fairly recognisable figure, but he is not the most welcome,” he added.

Negative outlook

The impression of dysfunctionality is feeding through to the financial world and investors. On September 5, Fitch Ratings revised Poland’s sovereign outlook to negative from stable, even though the agency affirmed the country’s long-term foreign-currency rating at A. 

Fitch cited swelling deficits, which it expects to reach 6.5% of GDP in 2025, among the highest in the EU. It forecast government debt rising to 55% of GDP by 2027 from 49% in 2024, narrowing fiscal space. 

Crucially, however, Fitch singled out political conflict between the president and the government as damaging policy predictability and undermining the credibility of consolidation plans.

“The start of President Karol Nawrocki's term highlights likely challenges for the coalition government to implement policy,” Fitch said.

“In an environment of high political polarisation … the influence of domestic political considerations on policy choices is likely to increase ahead of the next parliamentary elections, due by October 2027. This could reduce the room to implement politically challenging measures before 2028, including those supporting fiscal consolidation,” Fitch also said.

The downgrade sparked exactly more of what it warned against. 

Finance Minister Andrzej Domański said Fitch’s warning reflected Nawrocki’s “blocking of key legislation, which limits the scope for strengthening the economy's foundations and necessary fiscal consolidation.”

“[Fitch] assessed a deficit of PLN272bn, growing debt, a declared deficit of 6.5% of GDP – and not PLN16bn zloty from tax bills that can be vetoed. How does PLN16bn compare to PLN272bn?” Leszek Skiba, Nawrocki’s economic advisor and a former deputy finance minister under the PiS government, responded.

The fiscal outlook is indeed challenging, coming on the back of ballooning defence spending, earmarked at 4.7% of GDP for 2025, the highest ratio in Nato. The government will also be wary not to reduce social expenditure ahead of the 2027 general election. Some of that spending is pressing and necessary to improve public services and prevent the unravelling of social cohesion (while some other, like helping Ukrainians who fled the war to Poland, is being targeted as the government is giving in to the anti-immigration sentiment).

Tusk’s coalition has pledged to consolidate gradually, but, Fitch notes, “increased political challenges to implement fiscal measures and the lack of a credible fiscal consolidation strategy will likely complicate Poland's ability to meaningfully reduce fiscal deficits before the next elections.”

Macroeconomic fundamentals are solid for now. Fitch expects GDP growth of 3.2% in 2025, well above the projected peer median of 2.3%. Growth will be driven by household consumption, wage gains and EU transfers. 

Meanwhile, inflation has cooled, with headline CPI at 2.8% in August, near the central bank’s 2.5% target. But wage growth remains elevated, and fiscal stimulus could rekindle price pressures. The National Bank of Poland has cut its reference rate three times this year to 4.75%, but has warned that loose fiscal policy and strong domestic demand complicate its task.

Hooked on Trump

Political dynamics make fiscal correction even harder. In just four weeks in office, Nawrocki has positioned himself as a veto-wielder, his opposition resonating with PiS supporters, who see him not simply as a check on Tusk’s liberal coalition, but their representative in a wider and deeply penetrating culture war that has long gripped Poland. 

Tusk, reliant on a fragile parliamentary majority, cannot override vetoes, leaving him unable to enact reforms, not just those needed to stabilise the deficit.

The standoff has international consequences. Poland is become the EU’s fifth-largest economy and a frontline state against Russia - the only EU country with land borders to all main actors in the east: Russia, its close ally Belarus, and the war-torn Ukraine, totalling over 1,160 kilometres.

The disunity at home threatens to sap Poland’s influence abroad even more as domestic political risks are only expected to increase. 

If Tusk fails to push through his agenda, voter fatigue could open the door for a PiS comeback, aligning Poland with a continental drift toward illiberal parties. Some of them take more conciliatory stances toward Moscow - although Nawrocki said he had told Trump “he never trusted Putin and Poland’s experience with Russia is that Russia has always wanted to destroy its neighbours.”

Still, that outcome could reshape EU decision-making and undermine cohesion on sanctioning Russia and military aid to Ukraine. Poland’s far-right - a possible coalition partner in either the Tusk-led or PiS-led next government - has expressed those views ever more openly as it both rode and helped foment war fatigue. The far-right’s 20% or so support in the polls could skew the political dynamics in Poland to less unity over Russia and Ukraine.

For now, Nawrocki is leveraging his relationship with Trump, whose return to the White House has upended US-European relations. Their rapport underscores Poland’s internal divide: a nationalist president aligning with a Republican administration, and a pro-European prime minister seeking continuity with Brussels. The image of Nawrocki in the Oval Office, absent the foreign ministry, encapsulates the dual-track diplomacy that critics say risks isolating Warsaw.

Despite Trump’s pledge on troops, questions linger over the long-term US commitment to Europe. Trump has previously questioned Nato’s value and pressed allies to shoulder more costs. 

Some commentators also posed questions about what happens to Nawrocki’s love of Trump if, the newspaper Rzeczpospolita wrote recently “Poland’s interests suddenly diverge from those of the United States? Will President Karol Nawrocki risk becoming a hostage to external pressures? And what price will he pay if he must defend Polish priorities in a clash with his MAGA boss?”

The next months appear decisive. Fitch has warned that without credible consolidation, further downgrades could follow. Investors already demand higher yields on Polish bonds than on many EU peers, reflecting risk premia. 

At the same time, the clash between president and government shows no sign of abating, with Nawrocki signalling more vetoes and Tusk insisting on reforms, his strategy being to put the odium on the president for the drift. 

But it will be just as convenient for Nawrocki to paint the Tusk government as stalling change and in need of replacement in 2027. The tug-of-war’s consequences could be reaching from financial markets to Europe’s security architecture.