Staring Down Critics, Poland's Kaczynski Urges Faster Change

  • Ruling party boss calls cabinet not led by him an `experiment'
  • Seeks central bank help in resolving `toxic' banking products

Undaunted by the biggest storm of international criticism against Poland in the country’s post-communist era, its most influential politician said his hand-picked government must accelerate the changes or risk dismissal.

Jaroslaw Kaczynski called Prime Minister Beata Szydlo’s five-month-old cabinet an “experiment” that, as the founder of the Law & Justice party, he’s monitoring. He’s seeking the central bank’s help in resolving “toxic” bank products, including foreign-currency mortgages, and wants to boost the domestic ownership of media organizations because “the brains of society can’t be under external control,” he said in an interview with weekly wSieci published on Monday.

“The fact that I didn’t aspire to be prime minister has been an experiment,” that will be “evaluated before the end of the year,” Kaczynski, who despite being head of Law & Justice is one of Poland’s most disliked politicians, was cited as saying. “There are successes, but we can’t be complacent. We must move ahead even faster, start new projects.”

The interview underscores Kaczynski’s dominance over the future of the country of 38 million, where the Law & Justice government has drawn fire both from the European Union and the U.S. for measures they criticize as undermining democracy. Kaczynski, who has pledged to revert Poland to its conservative, Catholic roots and away from a multi-cultural European mainstream, holds no constitutional post in Poland other than his mandate as a lawmaker.

As party leader and a popular figure among Law & Justice’s most loyal supporters, however, he holds sway over both Szydlo and President Andrzej Duda. After staying out of last year’s election campaign, he picked both to be candidates in races they won. But he himself remains unpopular, with a CBOS poll showing this month that 48 percent of Poles think Kaczynski isn’t trustworthy, compared with 29 percent for Duda and 32 percent for Szydlo.

EU Clash

The Law & Justice government fell out with Poland’s EU partners after passing legislation to consolidate power, including rules making it more difficult for the country’s constitutional tribunal to overrule laws. The European Parliament last week passed a resolution chiding the government for undermining rule of law and eroding checks and balances. Earlier this year, the bloc’s executive Commission started an unprecedented probe into Poland’s democratic order.

“I hope the country is acting in line with the European values, ” Danish Premier Lars Lokke Rasmussen told reporters in Warsaw Monday after expressing concerns about the rule of law in Poland during a meeting he had with Szydlo.

She defended her government’s record, saying “all the changes we’re implementing in Poland under a democratic mandate are in line with the rule of law.”

While a cabinet reshuffle now would be premature, Kaczynski said he won’t shy away from changes if necessary, urging Szydlo to push ahead with plans to close tax loopholes. Budget performance is becoming more important as the government seeks to deliver on social pledges including more child benefits, a lower retirement age and higher wages. Fraud deprives the Polish tax-man of some 40 billion zloty ($10.5 billion) a year, according to the European Commission, compared with the government’s 2016 budget deficit target of 54.7 billion zloty.

Presuring Szydlo

“Our actions to shore up tax revenues are already bearing fruit, but too slowly,” Kaczynski, 66, said. “It’s the prime minister’s task to significantly boost the effectiveness of these measures.”

Such comments expose the prime minister’s subordinate position and confirm who’s really in charge in Poland, said Tomasz Siemoniak, an opposition lawmaker from the Civic Platform party, which lost power in last October’s general election.

“Kaczynski’s words sound like an announcement of a change of prime minister,” Siemoniak told TVN24 television. “The cabinet has huge problems in governing, and Szydlo, except for being active in areas such as child benefits, is not visible as a leader actively solving problems.”

‘Toxic’ Products

With the help of the central bank, Kaczynski said the government will resolve what he called “toxic” bank products, including Swiss-franc mortgages and hybrid savings-and-insurance instruments designed to allow customers to save without paying taxes on earned interest. About 5 million Poles have entered into such agreements, which sometimes have hefty exit costs, “draining nearly 50 billion zloty from their pockets,” the Law & Justice leader said.

President Duda has proposed legislation to convert the equivalent of $36 billion in Swiss franc-denominated loans into zloty, which central bank Governor Marek Belka has called “pure evil” and the banking regulator derided as a “recipe” for a financial meltdown. Kaczynski said that while the conditions of banks must be considered during such an operation, the move was “fully possible to carry out.”

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