UPDATE 1-Poland to 'de-Russify' its economy, says PM

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WARSAW, March 18 (Reuters) - Poland will take steps to sever economic ties with Moscow, the prime minister said on Friday, in a process of “de-Russification” in response to Russia’s invasion of Ukraine.

Memories of decades of Soviet domination following World War Two run deep in the European Union’s largest eastern member, and the war in Ukraine has added urgency to a process of minimising dependence on Russia that was already under way.

“We will deal with the de-Russification of the Polish and European economy,” Mateusz Morawiecki told a news conference. “We call for the suspension of activities on the Russian market.”

Labelling the measures an “Anti-Putin Shield”, terminology reminiscent of previous government packages to cushion the blow on businesses and households from COVID-19 and inflation, Morawiecki said that the first main aim was to stop food prices rising.

As well as being a major wheat exporter, Russia is also a world leader in fertiliser exports.

International food and feed prices could rise by up to 20% as a result of the conflict in Ukraine, the United Nations food agency said this month.

Poland will offer farmers a subsidy of 500 zlotys ($117) for each hectare of land used for agricultural purposes, to compensate them for the rising cost of fertilisers.

A staunch opponent of the Nord Stream 2 gas pipeline, Poland has long argued that Europe needs to reduce its dependence on Russian oil and gas, and Morawiecki said on Friday that the government would allocate 3 billion zlotys to recapitalise domestic pipeline builder Gaz-System.

“Gas blackmail, the use of raw materials as an element of not only psychological warfare, but simply warfare... is an action that we must counteract on many fronts,” Morawiecki said.

Polish gas company PGNiG has on many occasions said it will not extend its current contract with Russia’s Gazprom when it expires in 2022. (Reporting by Alan Charlish and Justyna Pawlak; editing by Jason Neely and Nick Macfie)