Polish Cabinet Under Pressure to Quit as Taping Row Returns

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Poland’s ruling party rejected calls to relinquish power before fall elections as Prime Minister Ewa Kopacz sought to stem a decline in public support by shuffling her cabinet.

Kopacz came under pressure to step down on Thursday, one day after she forced the resignation of three ministers and three deputy ministers to distance her Civic Platform from an eavesdropping scandal that rocked the country last year and resurfaced this week.

The opposition Law & Justice is urging the government to resign after its candidate, Andrzej Duda, staged a come-from-behind victory in last month’s presidential ballot. The defeat of a government-backed contender raised the prospects of the nation unseating one of Europe’s most economically successful administrations.

“The president-elect is the only center of stability in the state right now,” Krzysztof Szczerski, a deputy for Law & Justice, said on his Twitter account on Thursday. “After he’s sworn in, parliament should dissolve itself.”

Duda will be inaugurated on Aug. 6, replacing Bronislaw Komorowski after his five-year term. Komorowski was supported by Civic Platform.

Zloty, Bonds

The Polish zloty reversed a decline and traded 0.3 percent stronger at 4.1292 to the euro as of 4:41 p.m. in Warsaw. The yield on the government’s 10-year bond fell six basis points, or 0.06 percentage point, to 3.15 percent.

The Democratic Left Alliance, an opposition faction advocating more welfare spending, filed a proposal to dissolve parliament. The motion, which would need backing from two-thirds of 460 lawmakers to succeed and trigger a snap ballot, can be blocked by Civic Platform’s 201 mandates.

While the ruling party is trying to regain some popularity, the latest developments bring more political uncertainty, according to Marsa Bobanovic, an emerging-markets analyst at RBS in London.

Rising probability of a Law & Justice government “is strongly negative for market sentiment, and likely to put higher pressure on the zloty,” Bobanovic said by e-mail.

Kopacz is struggling to draw a line under a scandal that erupted a year ago when secretly recorded conversations between leading policy makers in a Warsaw restaurant were published by a local magazine.

Internet Leak

The case resurfaced again this week with an Internet leak of documents from its investigation, further hurting the popularity of the government that preserved economic growth during the global financial crisis.

“No scandals have been resolved during these eight years of government, which means this government has lost its credibility and shuffles won’t change anything,” Duda said in televised remarks.

Mariusz Blaszczak, the head of Law & Justice’s parliamentary caucus, said he didn’t favor dissolving parliament before its term ends, even as he still urged the government to leave.

The idea was rejected by Foreign Minister Grzegorz Schetyna, who said a resignation would amount to an “admission of defeat” by the party that has been in power for eight years.

“It’s an opportunity for us to go on the offensive” and a chance for “a fresh start,” Schetyna told reporters.

Elections will be held in October, so seeking an early vote now would mean moving it only by several weeks, said Otilia Dhand, senior vice president at political risk evaluator Teneo Intelligence.

“This is part of the election campaign already,” Dhand said by phone from Brussels. “Civic Platform is losing its chances to win the elections fairly fast.”

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