Saturday

25th May 2019

Poland's economy feels the heat of rule of law talks

Poland is feeling the economic impact of the debate with the European Commission over the rule of law, with 20 percent of investors holding back because of the issue.

“Twenty percent of the potential investors who would have been already investing, are putting a question mark, and … wait for the definitive solution,” Polish deputy prime minister Mateusz Morawiecki told a group of journalists on Thursday (26 May).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

He said the "current discussion around the constitutional court" is having "not a significant, but not an insignificant impact" on the delay, adding that the investors are taking into account other factors, like the stability of the Polish economy and the volatile international situation.

The new Polish government’s efforts to reform the constitutional tribunal and appoint loyalists to the court earlier this year prompted the EU executive to launch a first-ever probe into rule of law in a member state.

The assessment of the commission was expected earlier this week, but after a visit by the commission's vice-president Frans Timmermans to Warsaw on Tuesday, the executive decided to discuss the issue again next week, giving more time to the Polish government to find a solution.

Morawiecki highlighted some of the other factors behind the investors' wariness.

“The overall doom and gloom over Europe and eurozone is much more important for some people in their decision-making,” he said.

He also blamed the Polish opposition for using the commission probe to fend off planned reforms by the current government.

“There is no trouble with the rule of law in Poland whatsoever. I think, speaking about democracy I could mention 10 other countries in the EU which have much bigger issues with democracy or the rule of law than Poland,” he said.

He said contacts were improving between the commission and the Polish government.

Morawiecki also said that Poland remained pro-EU and pro-Europe, but was very sensitive on questions of sovereignty and independence of decisions.

Slowing economy

The deputy prime minister dismissed suggestions that a slower than expected growth of Polish economy in the first quarter of the year was due to the controversial actions of the new government, which was elected by overwhelming majority in the parliament last October.

Even though Poland was the only EU country to avoid recession after the 2008 financial crisis, Poland's economic growth slowed more sharply than expected between January and April, to 3.0 percent in annual terms.

The minister shifted some blame to the previous government's economic policy and to the eurozone. He said the eurozone's continued troubles create uncertainty as 80 percent of Poland’s exports are directed to euro countries.

Morawiecki said Warsaw does not see lack of confidence in Polish bonds by international and domestic investors.

He said that despite the generous budget expenditures planned by the government, such as lowering the pension age, Poland was committed to sticking to EU rules and keeping the deficit below 3 percent.

“Not until we are convinced that the GDP growth is stimulating some additional tax collection, … not until then are we going to increase our expenditures,” he said.

On the issue of helping Polish people who have mortgages in Swiss francs, the deputy prime minister said president Andrzej Duda would come out with “balanced proposals” in the next couple of weeks.

Morawiecki said there are 38-39 billion Swiss francs in the Polish banking system.

Poland presented a draft law in January to burden lenders with the costs of converting Swiss franc mortgages into zlotys, a move that could undermine the health of Poland’s banking sector.

Converting mortgages to zlotys became a political issue after Duda promised the conversion in his campaign before he was elected in May last year, backed by the ruling conservative Law and Justice (PiS) party. Some 500,000 Poles have costly Swiss franc mortgages.

Poland vows solution to judicial crisis

Polish PM Szydlo and EU commissioner Timmermans appeared to mend fences in Warsaw. But neither would say how Poland will address concerns.

Poland questions legality of EU probe

On eve of potentially damning EU decision, Polish strongman Jaroslaw Kaczynski has said EU rule of law monitoring could be challenged in Luxembourg court.

News in Brief

  1. UK's May announces June 7 resignation date
  2. Ireland votes for EU election and divorce referendum
  3. Report: May to announce resignation plan on Friday
  4. Leading politicians: time for EU to have female leaders
  5. Poll: Finland's Green party to surge in EU elections
  6. High demand for postal voting in Denmark
  7. Some EU citizens turned away at UK polling stations
  8. Switzerland unlikely to sign draft EU deal

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Latest News

  1. Belgium votes in hybrid EU-national election
  2. Irish greens take Dublin in second EU exit poll
  3. EU election results to trigger top jobs scramble This WEEK
  4. Don't tell the Dutch - but Timmermans 'won'
  5. EU says goodbye to May with 'respect'
  6. Strache scandal: how big a hit will Austrian far-right take?
  7. Italy train row exposes competing views of EU
  8. Dutch socialists on top in first EP election exit poll

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic commitment to driving global gender equality
  2. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  3. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  4. Nordic Council of MinistersNordic talks on parental leave at the UN
  5. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  6. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  7. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  8. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  9. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  10. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  11. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  12. Nordic Council of MinistersNordic ministers take the lead in combatting climate change

Join EUobserver

Support quality EU news

Join us