Poland: New government set to delay EMU membership
Foreign investors concerned about the effect on bond prices.
President Lech (l)
and his brother
The policies of Poland’s new government could have a detrimental impact on the country’s goal of joining the euro by 2010, analysts say. This, in turn, is expected to have a negative effect on the country’s domestic debt, which had been taken up by an influx of non-resident buyers in the past 12 months on the expectation of a post-election outlook favourable for EMU convergence.
Although the country’s new prime minister, Kazimierz Marcinkiewicz, won a confidence vote in his minority government on November 10, his coalition looks fragmented.
Marcinkiewicz formed a government after his conservative Law and Justice Party (PiS) won 155 of 460 parliamentary seats in September. It was expected to rule in coalition with liberal party Civic Platform, which took 133 seats, but talks broke down, leading PiS to seek support from minority parties.
PiS is chaired by Jaroslaw Kaczysnki, whose twin brother, Lech, is Poland’s new president.
Minority blocs Self Defence, LPR and PSL have made their support for PiS conditional on its shifting its policy stance to the left.