WRAPUP 4-Polish PM wins new term, markets buoyant

Mon Oct 10, 2011 4:51am EDT

Related Topics

* Tusk's Civic Platform wins new four-year term

* Tusk to seek new coalition with Peasants' Party

* Marklets, analysts welcome outcome as sign of stability

By Gareth Jones

WARSAW, Oct 10 (Reuters) - Centre-right leader Donald Tusk has become the first Polish prime minister since the fall of communism in 1989 to win a second consecutive term following his Civic Platform's election victory, nearly complete results showed on Monday.

With 93 percent of the votes counted, Tusk's pro-business party had 39 percent of the votes in Sunday's election. Its main rival, Jaroslaw Kaczynski's nationalist-conservative Law and Justice party, trailed on 30 percent.

On that projection, Civic Platform would secure 206 seats in the 460-member lower chamber, or Sejm.

Its ally, the rural-based Peasants' Party, was on track to win 30 seats, giving Tusk enough support to rebuild the same coalition that has steered Poland smoothly through the economic turmoil of the past four years.

Tusk is also expected to try to lure moderate members of the post-communist Democratic Left Alliance (SLD) into a new coalition. The SLD won only about 8.2 percent of the vote after losing many younger voters to a new libertarian grouping.

Palikot's Movement, founded by wealthy businessman and former PO lawmaker Janusz Palikot, won 9.9 percent. Palikot's attacks on the powerful Roman Catholic Church and championing of causes such as gay rights and legalisation of soft drugs have struck a chord among young urban voters.

Lech Walesa, Poland's former president and leader of the Solidarity trade union in communist times, said Palikot had successfully tapped into issues neglected by other parties.

"Palikot had a clearer message... and people want a simpler, clear message," Walesa told TVN24 television.

Financial markets welcomed Tusk's victory as a guarantee of political and economic stability in the European Union's largest eastern member state at a time of deepening crisis in the euro zone.

"From the point of view of the markets, this is very good news. Investors worried that we could see a coalition made up of three parties," said Ernest Pytlarczyk, chief economist at BRE Bank.

The Polish zloty was 1 percent higher against the euro in early Monday trade, bonds also firmed and the Warsaw bourse's main index rose 0.3 percent while other regional stock markets fell.

Polish President Bronislaw Komorowski, a former Civic Platform lawmaker, is expected to ask Tusk to form a government but has said he must first wait for the final election results, expected on Tuesday evening.

"I hope that it will be possible to reduce the time necessary for creating the government ... to a minimum," Komorowski said on Sunday evening.

The main surprise of the election was the rise of a new liberal grouping, Palikot's Movement, which the exit poll showed winning 9.9 percent, much of it at the expense of the former communists.

Janusz Palikot, its founder, is a wealthy businessman and former PO lawmaker whose attacks on the powerful Roman Catholic Church and championing of causes such as gay rights and legalisation of soft drugs struck a chord among young voters.

CONTINUITY

Political analysts said Sunday's election result showed Polish democracy had come of age.

"The ruling party and coalition for the first time in Poland's post-communist history has been re-elected and that shows the consolidation of democracy in Poland," said Jacek Raciborski, a political scientist at Warsaw University.

"Only the low turnout is worrying," he added.

About one in two eligible voters took part in the election, in which a return to power by Kaczynski would have threatened relations with Germany and Russia and worried investors.

Tusk's party also won a clear victory in the upper chamber, or Senate, where it was projected to win 62 of the 100 seats.

The outgoing coalition has presided over four years of strong economic growth, steering Poland smoothly through the 2008-09 global financial crisis without dipping into recession.

Its victory ends a string of defeats for ruling parties in elections in EU member states this year, including in Portugal, Latvia, Denmark and Ireland.

Civic Platform has pledged more cautious reforms aimed at reining in the public debt and budget deficit, expected to reach 53.8 percent and 5.6 percent respectively this year.

It also wants to continue a privatisation programme set to net 15 billion zlotys ($4 billion) for state coffers in 2011 and to pursue closer ties with Poland's EU partners.

The result is a personal triumph for Tusk, 54, a pragmatic liberal conservative from near Gdansk on Poland's Baltic coast, who was involved in the Solidarity movement that helped end decades of communist rule.

Tusk, whose country holds the EU presidency until the end of this year, favours closer integration with the rest of the bloc and says joining the euro remains a strategic goal for Poland despite the debt crisis in the euro zone.

He has good personal ties with German Chancellor Angela Merkel and has maintained a cautious rapprochement with Russia, despite strains over a plane crash there last year that killed then-President Lech Kaczynski, Jaroslaw Kaczynski's twin.

Jaroslaw Kaczynski's calls for a halt to privatisation, for higher taxes on the wealthy and for a more combative stance in dealings with the EU had unsettled investors.

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