Poland's Eurosceptics win outright majority in parliament

WARSAW (Reuters) - The Eurosceptic Law and Justice party (PiS) has become the first party to win an outright majority in the Polish parliament since the fall of communism in 1989, official results showed on Tuesday.

Run by Jaroslaw Kaczynski, the twin brother of Poland’s late president Lech, the PiS secured 235 seats out of 460 in the lower chamber of parliament, the Sejm, allowing it to form a government without coalition partners.

The victory marks a decisive swing towards nationalism and distrust of the European Union in the country of 38 million, suggesting there will be tensions with Warsaw’s key allies in Brussels.

“It is very important that, ... irrespective of emotions and our stances towards each other, we are able to maintain Poland’s position in Europe and good relations with neighbors,” said European Council President Donald Tusk, whose relations with Kaczynski have been marked by deep personal animosity.

The socially conservative PiS has promised to increase state control over Poland’s $535 billion economy, the biggest in central and eastern Europe, and to tax banks and stop privatization.

Its opposition to accepting migrants fleeing war in the Middle East and Africa is likely to set it on a collision course with its key European Union allies.

The incumbent centrist Civic Platform won 138 seats, while the anti-establishment Kukiz’15 party secured 42 seats, the pro-market liberal Nowoczesna 28, and the agrarian PSL 16.

Two leftist parties failed to pass the election threshold, meaning leftists will have no representation in the legislature for the first time since 1989.

PROMISES

Law and Justice also wants to lower the retirement age and boost economic growth to 5 percent through fiscal and monetary stimulus. It rejects adoption of the euro single currency any time soon.

PiS’s pledges also include raising public spending by over 2 percent of GDP and at the same time keeping the fiscal deficit below the 3 percent EU ceiling.

“Law and Justice faces a huge responsibility,” said Andrzej Rychard, sociologist at the Polish Academy of Sciences. “Some of these promises may prove difficult to keep.”

PiS also secured an outright majority in the upper chamber of parliament, the Senate, winning 61 seats out of 100.

The president, Andrzej Duda, was also elected in May on a PiS ticket, giving the PiS a clean sweep of the main elected offices.

It did not, however, win enough seats to be able to change the constitution, something it has aspired to in the past.

Moody’s rating agency said on Tuesday that the PiS’s victory could undermine Poland’s status as a regional safe haven for investors, and was negative for its credit rating.

But the ratings agency Fitch said Poland’s strong economic fundamentals, including its relatively resilient banking system, meant it probably had the rating headroom to absorb the expected change in economic policy.

Poland’s central bank governor said a change in the bank’s mandate, which had been flagged by PiS as part of its economic stimulus program, could conflict with European Union law.

Poland’s economy has expanded nearly 50 percent in the last decade, with the pro-market Civic Platform focusing on trying to make the most of EU aid and combining green-field investment with fiscal prudence.

But pockets of poverty and economic stagnation remain, and PiS was able to exploit growing frustration in some areas that the fruits of economic success have not been more evenly shared.