Fitch Ratings issued a warning on Monday regarding the political tensions in Poland, stating that these tensions threaten the efficiency of the government. The agency notes that the situation could complicate fiscal consolidation efforts, delay the maintenance of EU funds and negatively impact market sentiment, especially if it threatens the stability and functioning of key institutions.
Fitch points out that since Donald Tusk’s return to the prime minister’s office, there have been increasing conflicts with the opposition Law and Justice (PiS) party and President Andrzej Duda. Among the contentious issues are changes to public media in Poland, Tusk’s imprisonment of two PiS MPs (who were later pardoned by the president), and the dismissal of the head of the National Prosecutor’s Office.
When maintaining its A- rating in November 2023, Fitch had accounted for potential tensions following the change in power, “but the level and frequency of confrontations have exceeded expectations.” The agency also commented on the president of Poland’s decision to send the budget to the Constitutional Tribunal, increasing uncertainty in policy enactment.
Fitch expresses concerns that the prospect of new snap parliamentary elections could further complicate the situation. The statement also addresses the high deficit, the pledge to reduce it, and EU recovery funds.
A separate paragraph is dedicated to the National Bank of Poland and its president. During the election campaign, Tusk was highly critical of the NBP head, and attempts by the new government to bring him before the State Tribunal, potentially resulting in his suspension, have further fueled the debate on the NBP’s independence. The credibility of institutions and the outcomes of their policies are crucial factors in Fitch’s assessment of sovereignty.
