25 May 2022
Home » Inflation Hits 8.6% As Morawiecki Unveils ‘Tarczy Antyinflacyjna 2.0’

Weekly Round-Up of Polish News Developments

The past week has seen the Polish government unveil a new package of measures designed to stem the rapid rise in inflation seen over the past few months. Whatever the impact of external developments, there can be little doubt but that voters feeling worse off than previously is a serious threat to the electoral prospects of any government. In this case though, Prawo i Sprawiedliwość has wasted little time in both responding in the form of the anti-inflationary shield initiatives, and also in creating a narrative in terms of responsibility for the rise in energy prices. That narrative, of course, prominently features two parties the Polish government already has very poor relations with – Russia, and the European Union institutions.

The main news stories over the past week have included:

• Prime Minister Morawiecki announces new measures aimed at combatting spiralling inflation

• Poland moves to fire its ambassador to Prague after he criticises his own side in the dispute over the Tarnów lignite mine

• U.S. – Russian security talks in Geneva fail to bridge sharp differences over Ukraine, and

• Foreign Minister Rau expresses concern over developments in Kazakhstan in his capacity as Chairman of the OSCE.  

On Tuesday Prime Minister Mateusz Morawiecki unveiled a series of measures designed to stem the rise in inflation in Poland dubbed ‘tarczy antyinflacyjna 2.0’ or ‘anti-inflationary shield 2.0’. The package includes reductions in the rate of VAT charged on fuel, foodstuffs and fertilisers. Morawiecki said that the new measures will be in force for six months commencing on February 1st. He said that ‘We are reducing VAT on fuels from 23 percent to 8 percent’ adding that the initiative ‘will cause a fundamental change in prices’.

Morawiecki claimed that the VAT reduction would result in a fall in fuel costs by 60 to 70 grosze per litre and that the reduction would be seen at the pumps in three to four weeks. VAT on food is being reduced from 5% to zero. VAT on natural gas is also being cut to zero while reductions in VAT on electricity already in force will be extended for a further four months. Morawiecki told reporters that the combined cost of the reductions is between 15 and 20 billion złotych, with the measures worth around 100 złotych per month to the typical Polish household.

Above: Polish Prime Minister Mateusz Morawiecki (photo courtesy of KRPM).

Last Friday the Central Statistical Office reported in a flash estimate that the annual rate of inflation reached 8.6% in December, the highest since 2000. The month-on-month increase was 0.9%. The two biggest contributors to the annual rise were the energy (including electricity and gas), and fuels for personal transport, categories, rising by 14.3% and 32.9% respectively.  

While the rate of inflation has soared in recent months it hasn’t been all bad economic news in Poland. Eurostat reported this week that by its measure unemployment was just 3% in November, the third lowest rate in the EU. Using different methodology, Poland’s own Central Statistical Office put November unemployment at 5.4%.

Record Foreign Direct Investment in Poland

2021 was a record year for foreign direct investment in Poland according to the Polska Agencja  Inwestycji i Handlu, or The Polish Investment and Trade Agency. In a statement on Monday the state body said it had brought over 3.5 billion euro in FDI to Poland last year, describing it as a ‘golden year’ for the agency. It said the investments would bring around 18,000 jobs to the country.

Ambassador to be Recalled Over Turów Mine Dispute Comments

The Polish government has reacted angrily to remarks by the country’s Ambassador to the Czech Republic, Mirosław Jasiński, about the Turów lignite mine that’s at the centre over a long-running dispute between the two countries. In an interview with the Deutsche Welle news agency Jasiński placed much of the blame for the dispute over alleged environmental pollution from the mine affecting the Czech Republic on his own country. He said that the Polish side had shown no understanding or goodwill towards the Czech position and condemned what he termed the ‘arrogance of certain people’ including the management of the state-owned mine.

Late last Thursday spokesperson Piotr Müller said that the government had initiated the procedure for recalling the ambassador. He tweeted that Jasiński had made ‘irresponsible’ statements, adding that ‘Every Polish diplomat’s duty is to support Polish interests’. Deputy Prime Minister and Minister of State Assets, Jacek Sasin, commented that the ‘reckless repetition of foreign narratives harms Polish interests’. Following a period in which there was no Polish ambassador in Prague, Jasiński was appointed just last November and only officially took-up the posting on December 20th.

His comments are especially embarrassing for Poland in the context of the €500,000 daily fine imposed on the country last September by the European Court of Justice for defying an order to shut-down the Turów mine pending a full hearing of the case.

U.S. : ‘We Will Not Allow Anyone To Slam Closed NATO’s Open-Door Policy’

There has been heightened concern in Poland over the past several months caused by what the government has portrayed as Russia’s aggressive posture in the region including a military build-up on its border with Ukraine and ongoing support for the Lukashenko regime in Belarus. Talks aimed at de-escalating tensions took place in Geneva on Monday between U.S. and Russian delegations. However, they look to have made little progress.

The U.S. has urged Russia to scale back it’s military presence on the border with Ukraine and warned of stringent economic sanctions if Russian forces attack Ukraine. Russia has stressed it has no intention of invading Ukraine, but has sought assurances that NATO will not admit the former Soviet republic as a member.

Commenting after eight-hours of talks on Monday, U.S. Deputy Secretary of State Wendy Sherman said that ‘We were firm … in pushing back on security proposals that are simply non-starters to the United States’. She added that ‘We will not allow anyone to slam closed NATO’s open-door policy, which has always been central to the NATO alliance’. For the Russian side Deputy Foreign Minister Sergei Ryabkov commented that ‘for us it’s absolutely essential to make sure that Ukraine never, never, ever becomes a member of NATO’.

OSCE Chairman Rau Holds Talks On Kazakhstan Crisis

Polish Foreign Minister Zbigniew Rau’s term as Chairman-in-Office of the Organisation for Security and Cooperation in Europe (OSCE) has got-off to an eventful start with the crisis in Kazakhstan. Early on Rau had called for the de-escalation of tensions and urged dialogue. He tweeted last Wednesday that ‘As Chairman of the OSCE, I closely follow recent developments in Kazakhstan. Violence is never a right response to resolve the current challenges. I call for de-escalation of the situation and starting a dialogue with full respect of OSCE commitments’.

Russian forces, along with those from other allied ex-Soviet republics, subsequently arrived in the country with the Kazakh President ordering a shoot without warning policy in the face of widespread civil unrest. The regime now looks to have regained control of the situation.

On Monday Rau, in his OSCE capacity, held telephone conversations with the foreign ministers of both Kazakhstan and Armenia. Armenia is the current chair of the Collective Security Treaty Organisation, under whose banner Kazakhstan sought external assistance. Commenting after speaking with his Kazakh counterpart, Rau commented that ‘As the OSCE Chairman, I stressed the need to uphold OSCE commitments, including those relating to human rights’. Armenia’s Foreign Minister said that in his conversation with Rau they ‘discussed the situation in Kazakhstan’ adding that ‘Issues on the peaceful resolution of the Nagorno-Karabakh conflict were also touched upon.’  

Kaczyński Blames Government Difficulties on External Developments

In a wide-ranging interview for this week’s edition of the Sieci news magazine, Prawo i Sprawiedliwość chairman Jarosław Kaczyński strongly denied that the ruling Zjednoczona Prawica coalition is nearing its end, saying such claims have ‘nothing to do with the truth’.

He commented that ‘I won’t deny the fact that the situation is difficult, and that things would have been far better without… bad, largely external, objective pressures and crises’. Kaczyński cited as reasons for the government’s difficulties Covid-19, inflation, ‘the hybrid attack on the Polish-Belarusian border’, and ‘Russia’s activity in Ukraine and the whole region’.

Kaczyński said in the context of the government’s strained relations with the European Union institutions that ‘we won’t allow political decisions to be imposed on us, under the threat of funding being cut off’.

Lewandowski Once Again Sports Personality of the Year

I’m not quite sure if at this stage this still counts as news or not, but we’ll mention all the same! Robert Lewandowski, well who else, has won the Polish Sports Personality of the Year poll, which is held annually among readers of the Przegląd Sportowy newspaper. It’s the third time he’s been named Sportsperson of the Year, and the second time in a row. He received the award at a ceremony on Saturday. These was, however, an award Lewandowski missed out on.

In the annual poll held by the PAP news agency Serbian tennis star Novak Djokovic was voted the 2021 European athlete of the year, with Lewandowski the runner-up. Well I guess he can’t win them all!      

That’s all for this week.

William Murphy writes for Hello Irlandia on political and general news.

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