Credit Manager Magazine 9/2021

60 CREDIT MANAGER MAGAZINE WRZESIEŃ / SEPTEMBER 2021 Poland faces greater reform uncertainty under minority PiS government even as the economy rebounds Poland will be among countries leading the economic recovery in central and eastern Europe this year, but the government’s loss of a parliamentary majority diminishes prospects for reform and fiscal consolidation. Dennis Shen Director, Sovereign and Public Sector ratings, at Scope Ratings GmbH Levon Kameryan 2Senior Analyst, Sovereign and Public Sector ratings, at Scope Ratings GmbH We expect Poland’s economy to by grow 5.6% in 2021 – revised up from Scope’s 4.9% fore- cast in June (see Figure 1) – with output back up pre-crisis levels in the second quarter. The pace of economic expansion will slow next year, to a still robust 4.6%. The governing Law and Justice (PiS) party’s loss of one of its junior coalition partners rep- resents will lead to greater policy uncertain- ty, not least by raising the likelihood of early elections before an autumn 2023 deadline. Institutional erosion has increased political instability and tested Poland’s institutional relationships ANALYSIS PiS’s loss of its former slim majority in the lower house (Sejm) shows the consequences of institutional erosion in Poland over recent years. The recent bill introduced in Parlia- ment seeking to bar companies outside the European Economic Area from holding ma- jority stakes in Polish media firms has result- ed in present political instability while poten- tially further testing Poland’s institutional re- lationship with the EU and the United States. The bill under question is widely seen as a manner to compel USmedia groupDiscovery into selling a controlling stake in TVN, Po- land’s main independent broadcaster, which has been critical of the government. At this stage, it remains unclear whether this bill will ultimately be signed into law. A silver lining to Law and Justice losing its governing majority There is ultimately a silver lining to PiS’s loss of a governing majority. True, it makes the passage of important reforms such as those required for the country’s reception of cru- cial EU funding more difficult. But it might also lead to a more balanced nearer-term leg- islative agenda, reducing somewhat risk for further weakening of judicial independence and the free media. Photo by Judy Vos on Unsplash