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Poland’s elections are a crossroad for EU solidarity — and Ukraine support

Civic Coalition Party leader Donald Tusk delivers a speech during the Women for Elections Campaign rally on October 10, 2023 in Lodz, Poland.

Omar Marqués | Getty Images News | fake images

Sunday’s Polish elections are being closely watched abroad, and the result is likely to have major implications for the country’s relationship with the European Union (and Ukraine.

The October 15 vote will pit the incumbent right-wing Law and Justice (PiS) party, seeking an unprecedented third term, and its conservative allies against the opposition group Civic Coalition (KO), led by former European Council president Donald Tusk and his Civic Platform Party.

Momentum has built around this center-right opposition in recent weeks, following a large rally in which Tusk praised the “renaissance of Poland” and the resignation of two senior army commanders amid accusations that the ruling party He is trying to politicize the army.

Law and Justice denies the claims, along with opposition claims (also put forward by various civic groups, NGOs and the EU itself) that it has restricted judicial independence and media and activist freedom in Poland.

Access to abortion services in the country has been severely restricted to a near-total ban, which polls show is opposed by about half of citizens. Tusk opposes the current abortion law and has said he would restore press freedoms and consider introducing same-sex civil unions, although some note it will be difficult to do so within the Polish political system.

In political campaigns, both sides have presented the elections as a battle for sovereignty and identity. Migration is another central and divisive issue.

Jaroslaw Kaczynski, leader of the ruling Law and Justice (PiS) party, delivers a speech during a final election campaign convention in Krakow, Poland, on October 11, 2023.

Nurfoto | Nurfoto | fake images

The ruling party remains very popular, especially in rural areas, and leads many opinion polls in the run-up to the election. Although it has suffered extremely high inflation rates, Poland has achieved strong economic growth in recent years (not only compared to the EU, but globally), with wages rising and unemployment falling.

The outcome of the election is likely to be close and lead to a period of intense negotiations. Consulting firm Eurasia Group believes it will most likely end in a hung parliament, and smaller parties could do unexpectedly well. A record 560,000 Poles living abroad have registered to vote, officials said this week.

Eurasia Group analysts also said in a recent note that the far-right Confederation party could support the liberal opposition rather than the Law and Justice-led United Right group as it seeks to become the dominant right-wing force in Poland.

The Confederation could also refuse to cooperate with any party, and the risk of no government being formed and new elections being held next year remains a possibility, they added.

Ties with the EU

Law and Justice leadership has seen Poland’s relationship with the EU and its various institutions become increasingly strained.

The EU has leveled criticism at the government and withheld billions of euros in funding over rule of law concerns. Tusk says his reforms will unlock financing, an issue investors will watch closely, according to analysts at Dutch bank ING.

Meanwhile, Poland has opposed measures such as a Joint EU statement on migration, of which Prime Minister Mateusz Morawiecki said: “We are not afraid of the dictates… of Berlin and Brussels.”

Polish President Andrzej Duda says that

And while Poland has been a staunch supporter of Ukraine since the full-scale Russian invasion in 2022, it has been embroiled in a bitter dispute with its neighbor over grain flows out of the war-torn country, which it claims , harm domestic farmers by creating excess supply.

The result was Morawiecki saying last month that his country would no longer supply weapons to Ukraine because it is “now arming Poland.” (Tusk recently told local media that “there is no alternative to a pro-Ukrainian policy,” although he added that there must be measures to protect domestic interests.)

The vote in Poland follows elections in neighboring Slovakia, in which former populist Prime Minister Robert Fico returned to power. On Wednesday, an agreement was reached to form a coalition government.

Fico ran a campaign staunchly critical of the EU and sympathetic to Russia during which he repeatedly stated that the country would not send any more weapons and ammunition to Ukraine.

Slovakia and Hungary, led by the right, also clashed with Ukraine over the issue of grain exports and harshly criticized the EU for its handling of that and other policies.

Poland is arguably the most influential of the three, with by far the largest economy and largest population. It also houses US and NATO troops.

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If Poland’s rulers remain in power, the three EU countries combined could increase criticism of their perceived overreach and increasingly obstruct the bloc’s political goals.

Hungary’s firebrand right-wing Prime Minister, Viktor Orbán, has persistently used inflammatory language regarding the EU, attacking it repeatedly on social networks. He also welcomed the election of the “patriot” Fico.

“At stake is the future of Poland’s democratic institutions, the country’s place in the European Union and the general direction of the country’s foreign policy in relations with its neighbors, especially Ukraine and Germany,” researchers from the think tank said. American GMF, adding that the result is likely to “herald a period of complicated and difficult government formation.”

Impact on the market

The impact of the election results on the market is likely to be limited due to checks and balances within Poland and between the country and Europe, Daniel Wood, emerging markets debt portfolio manager at William Blair, said in a note on Thursday. Investment Management.

“If the Civic Coalition (led by Tusk) wins, then we can expect a closer relationship with the EU, less frequent delays around EU disbursements and perhaps a slow rollback of some of the country’s less market-friendly policies.” PiS (Law and Justice), particularly around the judiciary,” he said.

A PiS coalition victory could see the Polish zloty depreciate marginally due to an expected deterioration in the country’s relationship with the European Union, Wood said. “However, this is likely to be a very short-lived settlement, as Poland and the European Union can only feud so far, given their common geopolitical interests.”

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