How Sunday′s election may impact Poland′s economy | Business| Economy and finance news from a German perspective | DW | 10.10.2019
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How Sunday's election may impact Poland's economy

Poland’s ruling party, PiS, has cobbled together a winning brand, with doses of economic redistribution, social conservatism and patriotic rhetoric. But will it be enough in Sunday's election to win an outright majority?

When Poles turn out to vote in parliamentary elections on October 13, they will be faced with an odd choice: a socially left-of-center but economically neo-liberal main opposition party or an economically left-of-center but nationalist incumbent.  

The ruling party, Law and Justice (PiS), is on target to win 42% of the vote, according to an opinion poll by Kantar, while the main opposition group, the Civic Coalition (KO), will get 29% and a leftist coalition, the Left, 13%. The far-right Confederation could take 5% and the Polish People's Party (PSL) 4%, the survey indicated. The key is perhaps not if PiS will be the largest party, but if it can regain the outright majority it won in a landslide in 2015.

The election has been framed by both sides, to a lesser or greater extent, as about social issues such LGBTQ rights in the deeply conservative country. But bread-and-butter issues may prove to be the key to unlocking this election.

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PiS, allied with two smaller groupings in a United Right coalition, is seeking a second term in power after a landslide win in 2015. 

"Good times for Poland" is the party's campaign slogan. Not the catchiest, but it seems to be working. PiS offers the traditional left's enthusiasm for spending, but with the traditional right's desire to balance the books. So, much of what it promises will depend on the Polish economy continuing to grow and with recession looming in the country's main export partner, Germany, the question is how long will it last?

Brushing off a series of scandals earlier in the year, PiS has been keen to present itself as fiscally responsible. The government has approved a draft budget for 2020 that would be the country's first in three decades without a deficit, but is based on the assumption that the country will grow 3.7%. Growth is forecast around 4% this year, but German recession lurks. According to the Financial Times, a balanced budget would in large parts be owing to one-off effects such as the auction of 5G licenses. Critics suggest also that PiS will amend the budget if it wins the election.

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PiS brands itself the creator of a "Polish welfare state" and its manifesto rejects "the rules of neoliberalism." Kaczynski has said spending on healthcare is on track to rise to 6% of GDP by 2024 from 4.6% of GDP in 2016, below the 6.6% average among OECD countries. The party also pledged to build a new oncology center, medical checkups for every Pole, improving care for senior citizens and a fund for modernizing hospitals.

Polish GDP growth over the years

PiS reversed the previous Civic Platform (PO) government's 2012 hike in the pension age to 67 (back to 65 for men and 60 for women) and the government recently approved a bill that would enable payment of the existing Family 500+ child benefit program to first-born children. Previously, the 500 zloty (€117, $129) monthly payment was only for second and subsequent children. 

PiS has promised to raise the minimum wage by 90% to 4,000 zlotys per month over four years, the biggest rise since 2008-09. The government says it will pay for this by removing the cap on social-security contributions for salaries over 142,900 zlotys a year. 

A fund worth 2 billion zlotys will serve renovations of schools, the party has said. 

PiS promises to increase payouts for Polish farmers in line with EU subsidies for agricultural producers in Western Europe.

PiS pledged a program of building 100 beltways for Polish cities and modernization of 150 railway stations.

The government has managed to cut Poland's debt and lowered borrowed costs on the back of economic growth and says it will fund this spending via improvements in tax collection, changes to the social security system, higher alcohol taxes, taxes on the very rich and an ecological tax. 

Furthermore, PiS's recent compliance with the European Court of Justice in putting aside the party's judicial overhaul seems to show a desire to work within the EU framework. Negotiations over the next long-term EU budget are entering a key phase and facing the prospect of funding being tied to a government's respect of the rule of law means Warsaw does not want to lose out.

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KO (Civic Coalition): Lukewarm tap water

Civic Platform (PO), the main party in the Civic Coalition (KO) once led by outgoing European Council President Donald Tusk, has joined forces with two small, liberal groupings to compete in the election. 

PO outlined six key policy areas: restoring democratic freedom, increasing wages, improving healthcare, pensions, education reform and ecological improvements.

Rather than trying to outbid PiS' expansion of social transfers and welfare benefit programs, although it has promised to continue with them, PO promises to focus on improving the quality of public services, especially health care. 

The coalition plans to eliminate coal from power production by 2040. 

PO promises to remove the Sunday trade ban introduced by PiS, as it promises to give premiums to pensioners who keep working in a labor market hit by demographic decline and a lowered retirement age.

It pledges bonuses for the poorest workers, tax breaks for entrepreneurs and grants for new businesses.

PO has pledged to raise the minimum wage to half of the average income.

PO is avowedly pro-LGBT, calls for gender equality, subsidized in-vitro fertility treatments, longer paternity leave and the legalization of civil partnerships and gender parity in government. 

Poland's Robert Biedron

Robert Biedron is one of the so-called 'Three Tenors' that have lifted the Polish left out of the doldrums

The Left: Singing from the same hymn sheet?

Three different streams of the Polish left and center-left have united for an electoral coalition for the election. The 'Three Tenors' pact: Włodzimierz Czarzasty, Robert Biedron and Adrian Zandberg. The biggest player is SLD, the Alliance of the Democratic Left, led by Czarzasty. Wiosna, or Spring, is a political project by a left-leaning mayor, the openly gay Biedron. The third player, Razem, was founded four years ago as a grassroots political party combined with a social movement.

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The Left’s pledges include gradual increases in the minimum wage negotiated with trade unions and a larger, faster increase for public-sector workers, including teachers and doctors.

It also wants to see a minimum pension for all, an increase in health financing to 6.8% of GDP and prescription drugs available for five zloty (around one euro).

It would create a public company to build a million affordable housing units and commit to ensuring that most energy comes from renewable sources by 2035.

The Left is the only group to pledge a strict separation between church and state and legalization of abortion.

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