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UPDATE 2-Russia-EU sanctions row will cut Polish GDP growth - deputy PM
August 1, 2014 / 8:10 AM / 3 years ago

UPDATE 2-Russia-EU sanctions row will cut Polish GDP growth - deputy PM

* Russia banned some Polish food imports after new EU sanctions

* GDP growth to drop 0.6 pct points, he tells daily Rzeczpospolita (Adds comment on cabinet reshuffle)

WARSAW, Aug 1 (Reuters) - Fallout from tit-for-tat sanctions between the European Union and Russia will shave 0.6 percentage points off Poland’s economic growth this year, Deputy Prime Minister Janusz Piechocinski was quoted as saying on Friday.

Asked by the Rzeczpospolita newspaper what EU sanctions imposed on Russia would cost the Polish economy, Piechocinski replied: “0.6 percent of GDP by the end of the year.”

On Wednesday, Russia announced a ban on most fruit and vegetable imports from Poland, which it said it could extend to the entire EU. Warsaw called the move retaliation by the Kremlin for new sanctions imposed a day earlier by the West on Russia over its role in the Ukraine crisis.

“Currently, our exports to Russia have fallen by 7 percent, and by 26-29 percent to Ukraine,” Piechocinski said. “The second half of the year will see these declining trends reinforced.”

Poland’s central bank expects the economy, the largest in central and eastern Europe, to expand by 3.6 percent in 2014.

Polish exports to Russia reached 8.1 billion euros ($10.8 bln) in 2013, including 316 million euros of the fruit and vegetables affected by the Russian ban.

According to European Commission figures, the EU sold Russia 1.2 billion euros of fruit and 886 million euros of vegetables in 2011, accounting for more than a fifth of its exports in those categories.

‘NO SEPTEMBER RESHUFFLE’

Piechocinski also told Rzeczpospolita the cabinet would not be reshuffled in September.

Prime Minister Donald Tusk had been expected to make changes after the summer vacations in light of the release in June of secret tapes in which central bank Governor Marek Belka and Interior Minister Bartlomiej Sienkiewicz were recorded discussing options for the removal of the finance minister.

Both Belka and Sienkiewicz remain in their posts.

“There will be no cabinet reshuffle in September,” Piechocinski was quoted as saying. “Changes will take place later because by the end of August we may not know who will be chosen president of the European Council (in place of Herman Van Rompuy).”

1 dollar = 0.7474 euro Reporting by Marcin Goettig,; Editing by John Stonestreet

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