Polish Finance Minister Dismissal Is ‘Non-Starter’ to RosatiPiotr Skolimowski and Konrad Krasuski
Polish Finance Minister Jacek Rostowski won’t be dismissed while this year’s budget under revision, according to Dariusz Rosati, the chairman of parliament’s public finance committee from the ruling party.
Prime Minister Donald Tusk is contemplating firing Rostowski, RMF FM radio reported today, without saying where it got the information. The zloty weakened on the news before recovering as economists and Rosati questioned the likelihood of a dismissal. The cabinet declined to comment on “press speculation,” Konrad Niklewicz, a spokesman for the premier, said by phone from Warsaw.
“Replacing the finance minister is a non-starter in the middle of a difficult budget revision,” Rosati said in a phone interview. “Underestimating the 2013 budget shortfall cannot be a sufficient argument -- the International Monetary Fund and the European Commission also got their Polish forecasts wrong.”
The ruling Civic Platform party has fallen behind the opposition Law and Justice in opinion polls as the government struggles to revive the economy, which is set to grow this year at the slowest pace since the 1990s. Rostowski last month announced plans to widen the budget deficit by 16 billion zloty ($5.1 billion) and suspend rules limiting fiscal stimulus to aid recovery. The cabinet is also working to overhaul the country’s privately-managed pension funds to reduce public debt.
The zloty weakened 0.3 percent on the RMF report before recouping losses. It traded 0.3 percent stronger at 4.1821 against the euro at 5:19 p.m. in Warsaw, extending this quarter’s appreciation to 3.4 percent, the biggest among 31 major currencies tracked by Bloomberg. Warsaw’s WIG stock index gained 0.5 percent.
“It’s hard to imagine a change of finance minister” now, Piotr Kalisz, chief economist for Poland at Citigroup Inc., said by phone from Warsaw. “I wouldn’t expect that.”
Rostowski’s dismissal would be “a done deal” if Tusk had a good candidate to replace him, RMF said on its website, citing a politician it didn’t name from the ruling Civic Platform party. Adam Gutowski, an assistant to Rostowski, declined to comment when contacted by phone.
London-born Rostowski, 62, a former dean of the economics department at Central European University in Budapest, has controlled the country’s finances since 2007. As an adviser to ex-Finance Minister Leszek Balcerowicz and the Russian government in the early 1990s, he had a courtside seat as the former communist countries set out to transform their centrally planned economies.
He navigated Poland through the global credit crisis, helping it become the only EU economy to avoid recession since 2008. As the longest-serving finance minister in post-communist Poland, Rostowski cut the budget deficit to 3.9 percent of gross domestic product last year from 7.9 percent in 2010.
The finance minister is now facing pressure to spur economic growth, forecast by the central bank to slow to 1.1 percent in 2013, as the country of 38 million draws closer to general elections scheduled for 2015.
“It seems increasingly difficult to see how Tusk can carry Rostowski into the 2015 election campaign if the current cloud still hangs over him,” Peter Attard Montalto, an emerging-market economist at Nomura International Plc, said by e-mail today. “That said, with our baseline for a recovery in growth, if Rostowski can hang on, play ball and sit out the next six months he may be into the clear.”