Cronyism Stink Forces Poland to Revamp 10-Month-Old Cabinet

  • Premier Szydlo didn’t say which ministers will leave cabinet
  • Zloty weakens from 1-month high as Zachodni sees profit-taking

Poland’s Prime Minister Beata Szydlo will overhaul her 10-month-old government next week to counter allegations of widespread cronyism at state-controlled companies and public administration.

Changes will include “personnel” and “systemic” matters, Szydlo told public radio Friday, without specifying which ministers would leave. On Sept. 15, she fired Treasury Minister Dawid Jackiewicz, who personally oversaw a flood of appointments to the management and supervisory boards of state companies, saying at the time that the move was part of an earlier announced plan by the Law & Justice party to phase out his ministry.

Since winning October’s general election, Law & Justice has changed rules to make more appointments of government workers non-competitive and to ease qualification requirements, while picking former party members to run public television and the biggest oil company, PKN Orlen SA. The party’s push to consolidate power, including a revamp of the Constitutional Tribunal which made it harder for the court to strike down new laws, has triggered the European Union’s first probe into a member country’s democratic standards.

“My impression is that Law & Justice machinery isn’t working well," Szydlo said. “We did make some mistakes and we need to correct them, we won’t be sweeping things under the carpet. We must be transparent and humble.”

‘Abusive Behavior’

Jackiewicz’s ouster came four days after Jaroslaw Kaczynski, the influential leader of Law & Justice who hand-picked Szydlo for premier, called for the end of “abusive behavior” and cronyism at state-run companies.

The zloty, which hit a one-month high on Thursday, weakened 0.2 percent to 4.2866 per euro at 10:12 p.m. in Warsaw. Analysts at Bank Zachodni WBK SA, led by Maciej Reluga, said a “slight profit-taking will take place before the weekend, triggered by information about next week’s government changes.” The yield on Poland’s benchmark 10-year bond increased one basis point to 2.77 percent and Warsaw’s WIG20 stock index dropped 0.9 percent.

Szydlo wasn’t asked about a report by Fakt newspaper on Friday that Finance Minister Pawel Szalamacha would be dismissed. “There are no such plans. The government is working as usual,” government spokesman Rafal Bochenek said by phone.

The premier urged her deputy Mateusz Morawiecki, who is in charge of economic policy, to execute his development plan amid concern that Polish growth has peaked at around 3 percent, compared to 5-6 percent expansion discussed by politicians at the start of the year.

“In order to implement our social agenda, the plan for responsible growth designed by Deputy Premier Morawiecki must succeed and that’s his job,” Szydlo said.

Morawiecki and Szalamacha both declined to comment on their roles in the government during their separate news conferences on Friday.

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