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Banking

Tusk win affirms confidence in Poland

Poland’s elections threw up some colourful characters – notably Janusz Palikot, the former vodka tycoon famous for attending press conferences with a dildo in one hand and a pistol in the other. But the result reaffirmed confidence in Poland.

Prime minister Donald Tusk became the first leader of Poland to be re-elected since the end of communism. His main rival, Jaroslaw Kaczynski, spooked investors with anti-German and anti-Russian rhetoric and populist economic proposals.

The main benefit is stability. For the first time a new government will not switch around management at the state-owned firms that still dominate key areas of Poland’s economy.

Treasury minister Aleksander Grad is stepping down. Compared with an average of 10 months in the position, he has been in the job for four years, and has boosted Warsaw’s status as a financial centre via privatizations.

"If you look at all governments since 1989 privatization was the main topic around which arguments were fought. After the past four years privatization has no longer been controversial," Grad tells Euromoney.

Tusk’s victory makes it easier to go ahead with the sale of 15% of the state’s 51% stake in PKO BP, the biggest bank. This was postponed by market conditions in September but could now take place in November. Entries by Russian banks, especially Sberbank, may also be easier now.

Poland was the only EU country not to fall into recession in 2009. In the first half of 2011 banks made record profits. Businessman Zygmunt Solorz-Zak’s takeover of mobile operator Polkomtel, approved by the anti-monopoly regulator in October, is at $6 billion the biggest M&A deal in Central and Eastern Europe this year.

A 10% drop in zloty-euro rates since August has hit foreign-currency borrowers. The government itself has a third of debt in foreign currency and is inching closer to a 60%-of-GDP constitutional debt limit.

Nevertheless, Poland re-elected a government friendly towards foreign investors, in contrast to populist leaders in Hungary and Ukraine (economies much harder hit after 2008). The jailing last month of Ukrainian opposition leader Yulia Tymoshenko has cast more doubt on whether Ukraine will replicate Poland’s success.

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