By appointing a respected former banker as prime minister, Poland’s right-wing ruling party is hoping to re-focus the government’s priorities on to economic development, and improve the country’s international standing. However, the appointment carries risks and could alienate the party’s core supporters while failing to broaden its electoral appeal and improve the effectiveness of government decision making. Although he will be more comfortable in international circles than his predecessor, the new prime minister is unlikely to alter the government’s policies in a way that fully satisfies the EU political establishment.
Popular prime minister, dysfunctional government?
Poland’s ruling right-wing Law and Justice (PiS) party has taken a huge political gamble replacing incumbent prime minister Beata Szydło, who held the post since it won the autumn 2015 parliamentary election, with finance minister Mateusz Morawiecki. Mrs Szydło will remain in government as one of Mr Morawiecki’s deputies responsible for social policy but without an official ministerial portfolio. The move is part of a broader reshuffle, and other ministerial changes are expected in January. It comes at the half-way point in the four-year parliament ahead of a series of elections in the next three years: local government in autumn 2018, European Parliament in summer 2019, parliamentary in autumn 2019, culminating in the summer 2020 presidential poll.
The switch came following a turbulent few weeks of speculation about Mrs Szydło’s future. Originally, many commentators assumed that she would be replaced by Law and Justice leader Jarosław Kaczyński who, although he does not hold any formal state positions, exercises a powerful behind-the-scenes influence in determining the government’s programmatic and strategic priorities. In fact, with the government retaining widespread support and Mrs Szydło Poland’s second most popular politician (after Law and Justice-backed President Andrzej Duda), she appeared to be a strong asset for the ruling party. As prime minister, Mrs Szydło proved herself to be a tough and determined politician who made few mistakes under fire but also had a common touch that many ordinary Poles could identify with. She brought a sense of calm and stability to the turbulent political scene and, on more than one occasion, used her formidable communication skills to rescue the government’s image and reputation. Moreover, Mr Szydło was also loyal to the ruling party, knowing the limits of her power and never attempting to use the premiership to challenge Mr Kaczyński’s authority.
However, from the outset Mr Szydło was surrounded by powerful ministers whom she only had a limited say in appointing, and Mr Kaczyński grew frustrated at her inability to tackle conflicts between various government factions. The existence of an influential power centre outside of the government also meant that the Law and Justice leader was constantly being called upon to resolve personnel and policy disputes, lengthening the decision making process and delaying the implementation of government projects.
Some commentators and party leaders argued that the best way to increase the coherence and transparency of government decision making was for Mr Kaczyński himself to take over as prime minister. It was also felt that, with the Law and Justice leader at the helm, the government would be in a much better position to arrange its relations with the President, who has been engaged in ongoing conflicts and turf wars with defence minister Antoni Macierewicz and justice minister Zbigniew Ziobro. Moreover, since he vetoed key elements of the government’s flagship judicial reforms in July, Mr Duda has been trying to carve out a more independent and assertive role for himself within the governing camp.
Nonetheless, although Mr Kaczyński is extremely popular with the party’s supporters, the Law and Justice leader is a polarising figure and one of the country’s least trusted politicians among more moderate voters. Assuming the premiership would also have left Mr Kaczyński with little time to spend on day-to-day party management which, with no natural successor to take on this role, could have generated further conflicts within the governing camp. With additional concerns about his age and health, appointing Mr Kaczyński as prime minister was felt to be too much of a risk
Refocusing on the economy
Mr Morawiecki’s appointment appears to represent a shift of focus from the government’s plans to radically reconstruct the Polish state and its redistributive social policy agenda towards a greater emphasis on economic modernisation and development. During its first two years in office Law and Justice has maintained high levels of popular support by delivering on the high-profile social spending pledges that were the key to its 2015 election victories. The most significant of these were: its extremely popular flagship ‘500 plus’ child subsidy programme for the first children of poorer households and every second and subsequent child in all families; and a law reversing the previous government’s deeply unpopular pension reforms, which had increased the retirement age to 67 (from 60 for women and 65 for men).
Mr Morawiecki – previously chief executive of Bank Zachodni WBK, Poland’s third largest lender in which the Spanish Santander bank is the majority stakeholder – was originally appointed as deputy prime minister in charge of economic affairs in a bid to re-assure markets and investors who were worried that the party’s expensive social promises could wreck Poland’s public finances and damage the business environment. Last autumn, he added the finance minister post to his economic development brief. In fact, although the government’s social spending programmes are very costly, the economy is performing much better than expected: growth is strong, unemployment at its lowest level for 25 years and wages have started to increase. As finance minister, Mr Morawiecki led a crackdown on tax evasion and VAT fraud that has helped to fund the government’s social welfare programmes and reduce the state budget deficit.
However, the government’s critics argue that the level of public debt remains high and increased social spending could cause serious problems if there is an economic downturn and the fiscal situation deteriorates. They also argue that growth is being driven by a short-term consumption boom rather than increased productivity and private sector investment. Mr Morawiecki is the architect of Law and Justice’s long-term economic modernisation programme and one of the key ideas behind his appointment as prime minister is that it will help Poland to better prepare for these future economic challenges and develop the conditions that will attract greater private investment.
Improving EU relations
Mr Morawiecki’s appointment is also aimed at improving Poland’s international standing. The Law and Justice government has found itself in conflict with the EU institutions and major European powers on several fronts. Arguing that the country needed to be more robust and assertive in advancing its national interests, the Law and Justice government shifted away from its predecessor’s strategy of trying to locate Poland within the so-called European ‘mainstream’ and instead attempted to build alternative alliances to counter-balance the influence of the Franco-German axis. Law and Justice has refused to implement an EU plan for the compulsory relocation of Middle Eastern and North African migrants located in Greece and Italy, which it argues is forcing multi-culturalism upon Poland and threatens national security. The government is also disputing a European Court of Justice order to stop logging in the primeval Białowieża Forest, arguing that it is only removing trees on public safety grounds.
Perhaps most significantly, the European Commission has initiated a ‘rule of law’ action under Article 7 of the European treaties, threatening the Polish government with sanctions including possible suspension of the country’s voting rights in the European Council. The Commission accuses the Law and Justice government of failing to respect the Polish Constitution and separation of powers, and undermining democracy and the rule of law, particularly in a dispute over the membership and competencies of the country’s constitutional tribunal and its planned judicial reforms. The government has defended its actions on the constitutional tribunal as necessary to restore pluralism and balance following what it claims was the illegal appointment of tribunal members by its predecessor; and its judicial reforms on the grounds that, like many Polish institutions, the legal establishment has been expropriated by an extremely well-entrenched, and often deeply corrupt, post-communist elite.
Law and Justice is hoping Mr Morawiecki will be able to ‘re-set’ relations with the EU political establishment. Due to his excellent business contacts he speaks fluent English and German, understands the mentality of Western elites, and generates respect for his competence and professionalism. One immediate challenge that Poland faces is the next EU budget round, discussions on which are due to begin in 2018. Poland is currently the main beneficiary from EU funds but the prospect of British withdrawal from the Union will reduce the size of the budget and limit the scale of these fiscal transfers in the future. At the same time, some EU leaders have argued that the disbursal of Union funds should reflect the extent to which countries are felt to uphold so-called ‘European values’, including democracy and the rule of law.
Mr Morawiecki’s appointment carries risks
However, Mr Morawiecki’s appointment also comes with substantial risks. Mrs Szydło was very popular and well-liked, particularly among Law and Justice’s core electorate. As a wealthy technocrat with a background in high finance, Mr Morawiecki is not someone whom the ruling party’s core supporters, who tend to be provincial and less well-off, would naturally identify with. With Mr Morawiecki as prime minister it will be more difficult for Law and Justice to present itself as an anti-establishment party on the side of ordinary Poles against the privileged elites, a key element of its electoral appeal to date. Mr Morawiecki was also once a member of the economic council advising former prime minister and one-time leader of the centrist Civic Platform (PO) – Poland’s governing party until the last election and currently the main opposition grouping – Donald Tusk, who is a bogeyman for many Law and Justice supporters. Most Poles are still making their minds up about the new prime minister but there is a danger that the ruling party could fail to broaden its appeal to potential new constituencies among the better-off while alienating its existing core electorate.
Moreover, it is unlikely that Mr Morawiecki will be able to deal with the government’s main structural weakness – infighting between powerful ministers entrenched in their departmental power bases – any more effectively than Mrs Szydło was able to. Mr Morawiecki’s late entry into politics means that, unlike some government members, he lacks a power base in the governing camp’s factional politics. He will not, therefore, represent a threat to Mr Kaczyński, who values political loyalty above all else and is always sensitive to potential challengers, but Mr Morawiecki will also be dependent on the Law and Justice leader to settle disagreements over key personnel and policy decisions, making it more difficult for him to govern effectively.
It is also questionable to what extent Mr Morawiecki will be able to improve Poland’s relations with the EU institutions and major powers. The source of this conflict does not lie solely in poor diplomacy and public relations – although there is no doubt that these could be improved – but in the substance of the government’s policies and decisions. However, other than his somewhat gentler rhetorical tone, there are no indications that Mr Morawiecki questions Law and Justice’s radical state reconstruction programme or policies such as its rejection of the EU migrant relocation scheme. Moreover, in spite of his image as a cool technocrat, Mr Morawiecki is genuinely determined to defend Poland against what he sees as threats to its national identity and traditional values (he would like to see the ‘re-Christianisation’ of Europe) even if this brings him into conflict with liberal-left EU cultural and political elites. Although Mr Morawiecki’s greater familiarity with diplomatic niceties should enable him to develop better contacts with Western politicians than his predecessor, he is unlikely to alter the government’s policies in a way that fully satisfies the EU political establishment.