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2026-02-20 15:25:15
[Polish Politics and Economy: A Storm is Brewing] ⑴ Poland's political deadlock has escalated again. Nationalist President Karl Nałacki vetoed a bill on Thursday to reform the way judges are appointed, further exacerbating the long-standing confrontation with Prime Minister Tusk's government and plunging the reform agenda into deeper stagnation. This veto has heightened market concerns about Poland's rule of law and the prospects for the unfreezing of EU funds. ⑵ At the macroeconomic policy level, members of the Monetary Policy Committee reiterated their support for a 25-basis-point interest rate cut, opposing a more aggressive 50-basis-point move. This indicates that the central bank still favors a cautiously accommodative stance to address the delicate balance between inflation and economic downturn. ⑶ Meanwhile, Polish businesses are pessimistic about key strategic directions. Only 23% of CEOs of large and medium-sized Polish companies support adopting the euro, the lowest level since 2011. Opponents are as high as 66%, showing that in the current global environment, businesses prefer to maintain the autonomy of their own currency to avoid additional exchange rate risks and transition costs. ⑷ It is worth noting that despite high political and policy uncertainty, the fundamentals of some sectors remain resilient. Bank Pekao, Poland's second-largest bank, reported better-than-expected fourth-quarter profits, thanks to double-digit growth in fee income, which successfully offset pressure from declining net interest margins. Its share price rose by approximately 1%. This demonstrates that even amidst macroeconomic headwinds, some companies can still achieve breakthroughs through organic growth. The market will closely monitor the substantial impact of future political changes on consumer and investment confidence.
