Poland: Challenging the EU | Analyst Picks | RiskMap 2020
Challenging the EU
Before 2015, it seemed Poland’s political transition and commitment to democratic values was entrenched, but the reign of nationalist-conservative Law and Justice (PiS) has challenged this consensus. PiS’s efforts to reform the Polish system has led to backsliding on democratic principles and the rule of law. This has put a serious strain on Polish-EU relations, and more broadly raised questions about the strength of Poland’s democracy. Despite this, the party’s brand of social conservatism, economic nationalism and redistributive welfare policies resonates with voters, evidenced by the party’s re-election in October 2019.
The PiS’s ideological leanings will continue to drive political risks for businesses in Poland and fuel political and social division, both at home and in Brussels. The party’s pledge to increase state and domestic ownership in the economy suggests that politicised interference and protectionism in business regulation, contracts and public tenders will remain a challenge, particularly in politically and strategically important sectors, such as energy, defence, finance and media. The party’s socially conservative streak – including rhetoric and policies targeting liberal values and the rights of women, the LGBT community and other minorities – poses a reputational risk for foreign companies promoting such values, as they are likely to be caught in the crossfire of the ruling party and its allies.
For 2020, the PiS is likely to continue to balance its ideological nationalism with more moderate and pragmatic economic policies to support foreign investment and economic growth. The party is painfully aware that its political success – and key to power – lies more in the wallets of voters than in grand reform schemes. This will continue to have a moderating impact on nationalist and interventionist impulses in 2020, and foreign investment will continue to play a key part in Polish economic success – providing opportunities for businesses across sectors.
The political shift since 2015 has been evident in foreign relations too. PiS’s victory will cement Poland’s leading role in the push to reshape power relations within the EU and contest the liberal consensus on which it is built, posing sustained challenges to the EU project.