Pol­ish fi­nance min­istry ex­presses sur­prise over dis­missal re­port

The Pak Banker - - MARKETS/SPORTS -

Poland's Fi­nance Min­istry said it was "very sur­prised" with a news­pa­per re­port that its chief Pawel Sza­la­macha may be on his way out fol­low­ing clashes over plans to im­pose a tax on re­tail­ers, fam­ily ben­e­fits and a pro­posal to con­vert for­eign-cur­rency mort­gages. Sza­la­macha may step down or be dis­missed, with his neg­a­tive opin­ion on the mort­gage bill be­ing a pos­si­ble trig­ger, Fakt news­pa­per re­ported on Thurs­day, cit­ing govern­ment mem­bers it didn't name. The ar­ti­cle comes three days af­ter Prime min­is­ter Beata Szydlo pub­licly backed her min­is­ter, call­ing him "one the most" im­por­tant mem­bers of her three­month old cab­i­net.

"We don't have any such sig­nals from the Prime Min­is­ter's of­fice," Alina Ur­ban, spokes­woman for Fi­nance Min­is­ter Pawel Sza­la­macha, said by phone. Fakt re­port is "very sur­pris­ing" as the min­is­ter is "busy" work­ing on do­mes­tic is­sues as well as Poland's con­ver­gence plans that needs to be filed with the Euro­pean Com­mis­sion later this year. The re­port comes as Poland's new govern­ment bat­tles to con­vince in­vestors about the sus­tain­abil­ity of its bud­get plans fol­low­ing a sur­prise rat­ing down­grade from Stan­dard & Poor's last month. Sza­la­macha is un­der fire from the coun­try's re­tail­ers' as­so­ci­a­tions, which ac­cused the rul­ing party of back­slid­ing on its pre-elec­tion prom­ise to help lo­cal busi­ness by seek­ing to im­pose new levies on them.

Sza­la­macha's po­ten­tial de­par­ture could un­set­tle mar­kets as he's "been cau­tious in keep­ing the deficit un­der 3 per­cent" of gross do­mes­tic prod­uct, said Jakub Ry­backi, an econ­o­mist at ING Groep NV in War­saw. "If he were to go and we got some- one who is less wed­ded to the the idea of keep­ing the deficit in check, bond yields could go higher." Poland's Law & Jus­tice party -- which won both pres­i­den­tial and par­lia­men­tary elec­tions last year -- is on a col­li­sion course with fi­nan­cial mar­kets and the do­mes­tic bank­ing in­dus­try. On Jan 19, Pol­ish cen­tral bank gov­er­nor Marek Belka dis­missed as "pure evil" a pro­posal by the pres­i­dent to con­vert some for­eign-de­nom­i­nated mort­gages into zloty. That came four days af­ter Stan­dard & Poor's down­graded its rat­ing on Poland for the first time ever, cut­ting to the third-low­est in­vest­ment level.

Poland's zloty is emerg­ing Europe's worst-per­form­ing cur­rency this year af­ter Rus­sia's ru­ble. It fell 0.6 per­cent to 4.4389 to the euro at 9:32 a.m. in War­saw. The yield on the govern­ment's bench­mark 10year lo­cal-cur­rency bonds in­creased 2 ba­sis points to 3.14 per­cent.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.