September 25, 2005

Polish victorious right to kick off coalition talks

By Tomasz Janowski

WARSAW (Reuters) - Poland's center-right parties crushed
the ruling left in an election on Sunday, exit polls showed,
but face tough coalition talks as they remain split on the
economy and will battle a presidential vote on October 9.

Exit polls put the Law and Justice conservatives with 28
percent ahead of their pro-business allies, the Civic Platform,
with 25-26 percent, the biggest triumph for heirs of the
Solidarity movement since the fall of communism in 1989.

The two parties assured they wanted to rule together and
said talks could start this week.

"We have long said we want this coalition and there are no
reasons why it shouldn't happen," said Law and Justice leader
Jaroslaw Kaczynski, the likely next prime minister.

Both promise to create more jobs, lower taxes and weed out
corruption that tainted the four-year rule of the reformed
former communists.

Reflecting a wider European debate, the two allies differ
over how far to go in embracing the free market and how much
welfare Poland, with wealth levels at half the EU average, can


The Civic Platform has promised to move fast with tax cuts,
deregulation, privatization and euro adoption and barely hid
their disappointment that the conservatives' tough talk on
crime and pledges to uphold the welfare state secured them

"I think that voters with socialist views were orphaned by
the collapse of the left and shifted to Law and Justice," said
Bronislaw Komorowski, a Civic Platform leader.

"The Law and Justice program at its core is socialist and
Poland is fed up with socialism."

The conservative's lead over Civic Platform disappointed
investors, who piled into the Polish zloty, bonds and stocks
when opinion polls indicated earlier this month that free
market champions would lead the next cabinet.

Economists say the zloty was set to weaken when markets
open on Monday, also reflecting concern that the presidential
campaign may disrupt coalition talks.

"The presidential campaign is still going on, so the battle
between the Platform and Law and Justice will continue," said
Ryszard Petru, chief economist at Bank BPH in Warsaw.

The October 9 vote that could go into a run-off two weeks
later pits Civic Platform leader and front-runner Donald Tusk
against conservative Warsaw mayor Lech Kaczynski.

The parliamentary campaign exposed the rift between the
growing middle class, which wants more free market, and those
who feel left behind after 16 years of painful reforms.

Political analysts say the Kaczynskis cleverly tapped that
anger, painting the Civic Platform proposal of a 15 percent
flat tax as a gift for the rich at the expense of the poor.