Poland's former European Council president, Donald Tusk, has expressed optimism that the country could regain access to blocked European Union aid as early as December, pending the formation of a governing coalition. Tusk's remarks put pressure on President Andrzej Duda to expedite the transfer of power following the recent parliamentary elections.
The suspension of over €35 billion ($37 billion) in EU financing was prompted by concerns over democratic regression during the nationalist-led government's eight-year rule. However, with three pro-EU opposition parties securing a parliamentary majority in the October 15 election, efforts are underway to establish a ruling coalition. All of these parties have endorsed Tusk as the next prime minister, believing that improved relations with Brussels will not only attract investors but also help fulfill the government's election pledges.
The outlook of Poland's currency, the zloty, heavily relies on the incoming government's ability to secure EU funds. As news of Tusk's statements emerged, the zloty strengthened by 0.5% against the euro, showing one of the most promising performances among emerging market currencies. Furthermore, Warsaw's WIG20 stock index experienced gains of up to 1.1%.
Tusk emphasized that his government's prompt actions should meet the necessary requirements for Poland to begin receiving EU funds. "If it's my government, we'll complete these steps very quickly so that the first payments can be made in December," he stated during a press conference in Brussels. However, he did not elaborate on the specific measures his government plans to undertake.
While the success of this plan partly hinges on President Duda's cooperation, it is important to note that he is an ally of the outgoing Law & Justice party. Although Duda announced that he will convene parliament on November 13th, he has not yet revealed his choice for the next prime minister. If he allows the current prime minister, Mateusz Morawiecki, to seek parliamentary support, the transfer of power may be delayed until mid-December.
In order for the EU to release the funds, the incoming government must prioritize the restoration of the judiciary's independence. However, this process may prove challenging as the president possesses veto powers over legislations, potentially impeding the opposition's efforts to restore judicial accountability. Nevertheless, Tusk firmly believes that accessing EU funds does not rely on a lengthy legislative process.
"If the president acknowledges facts quickly and allows the government to be formed expediently, then I guarantee rapid payments from the recovery fund," Tusk assured. With the timeline for accessing EU aid uncertain, the Polish government faces significant pressure to not only form a coalition quickly but also address democratic concerns to rebuild trust with Brussels and investors alike.