Poland – New Party Alters Electoral Landscape

Since 2010, the center-right PO has controlled both the government and the presidency, creating a basis for a fairly stable political climate. However, the unexpected victory of Andrzej Duda, the candidate of the main opposition PiS, in the presidential run-off election held on May 24 has created the conditions for a renewal of the ideological clashes that characterized the PO’s first three years in power (2007–2010), when the presidency was controlled by the late co-founder of the PiS, Lech Kaczynski.
In any case, the period of political co-habitation may be short-lived. The defeat of the incumbent president, Bronislaw Komorowski, whom pre-election polls had indicated was all but assured of winning a second term, has cast a pall over the PO’s prospects for victory at parliamentary elections scheduled for October 2015.
Poll results released in the first half of June put support for United Right, a three-party electoral alliance headed by the PiS, at 25%–30%, compared to 21%–25% for the PO, and 19%–24% for a new anti-establishment party headed by Pawel Kukiz, a former rock musician who shocked the political establishment by winning more than 20% of the vote in the first round of presidential voting on May 10.
The assumed entry of Kukiz’s as-yet-unnamed party into the campaign holds the potential to radically shift the electoral landscape. In addition to greatly reducing the already slim chance that any single party or electoral bloc will come close to winning a majority of seats in the 460-member Sejm, it will also affect the coalition options available to the winning party.
Kukiz’s meteoric rise likewise provides a potential strong coalition partner for the PiS, the absence of which has previously limited the party’s chances of returning to power. Although Kukiz has presented himself as an “anti-system” candidate, his stance on social policy and his nationalist views are compatible with the orientation of the PiS.
From the perspective of investors, any scenario that involves the return of the PiS to a significant role in policy-making would undermine confidence, especially so if the new government also included Kukiz’s party. In addition to ushering in a period of troubled relations with the EU, the PiS’ return to power will mean an indefinite delay in moves to prepare Poland for membership in the euro zone, with negative implications for the fiscal discipline exercised by the government.
The nationalist inclinations of the PiS are reflected in the party’s interventionist economic stance; during the presidential campaign, Duda called for strong state support for the struggling mining sector, as well as action by banks to ease the debt burden of Poles who financed home purchases with mortgaged denominated in Swiss francs, and were slammed with the Swiss central bank abandoned the euro peg earlier this year. The PiS would likely push for increases in wage and benefits as part of its efforts to stem an exodus of younger workers to other EU member states, especially Germany and the UK.