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Polish center-right parties triumph in elections
(Reuters)
Updated: 2005-09-26 11:27

Poland's center-right parties crushed the ruling left in parliamentary elections, exit polls and early results showed on Monday, but faced tough coalition talks on splits over how far to go in embracing the free market.

Exit polls put the Law and Justice conservatives on 28 percent and their pro-business Civic Platform allies on 25-26 percent, the biggest triumph for the heirs of the Solidarity movement.

With results from 10 percent of districts counted showing a similar outcome, the two parties said they wanted to rule together and that talks could start this week.

"We have long said we want this coalition and there are no reasons why it shouldn't happen," said Law and Justice leader Jaroslaw Kaczynski, the likely next prime minister.

Both parties promise to create more jobs, lower taxes and weed out corruption that tainted the four-year rule of the Democratic Left Alliance.

Jaroslaw Kaczynski, candidate for Prime-Minister and leader of the Law and Justice Party (PiS), speaks to supporters after his party won Poland's Parliamentary elections in Warsaw September 25, 2005. [Reuters]

But financial markets believe a coalition led by the Civic Platform would more aggressively tackle Poland's pressing economic problems of unemployment, at 18 percent the highest in the EU, bloated budgets and costly social security.

Reflecting a wider European debate, the two parties also differ on how much welfare Poland, whose wealth levels are half the EU average, can afford.

The Civic Platform, which has pledged to move fast with tax cuts, deregulation, privatization and euro adoption, barely hid its disappointment that the conservatives' tough talk on crime and vows to uphold the welfare state secured them victory.

"ORPHANED SOCIALISTS"

"I think that voters with socialist views were orphaned by the collapse of the left and shifted to Law and Justice," said Bronislaw Komorowski, a Civic Platform leader.

"The Law and Justice program at its core is socialist and Poland is fed up with socialism."

The conservatives' lead over Civic Platform disappointed investors, who piled into the Polish zloty, bonds and stocks when opinion polls suggested earlier this month that free market champions would lead the next cabinet.

Economists said the zloty was set to weaken when markets opened on Monday, also reflecting concern the campaign for presidential polls on October 9 may disrupt coalition talks.

"The presidential campaign is still going on, so the battle between the Platform and Law and Justice will continue," said Ryszard Petru, chief economist at Bank BPH in Warsaw.

The October 9 vote, which could go into a run-off two weeks later, pits Civic Platform leader and front-runner Donald Tusk against conservative Warsaw mayor Lech Kaczynski, twin brother of fellow Law and Justice leader.

The parliamentary campaign exposed the rift between the growing middle class, which wants more free market openness, and those who feel left behind after 16 years of painful reforms.

Political analysts say the Kaczynskis cleverly tapped that anger, painting the Civic Platform proposal of a 15 percent flat tax as a gift for the rich at the expense of the poor.

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