Polish Premier Meets Kingmaker Kaczynski as Shake Up Looms

(Bloomberg) -- Poland’s Prime Minister Beata Szydlo, seeking to move past reports that she may soon be dismissed, met ruling-party leader and potential successor Jaroslaw Kaczynski to discuss plans for a ministerial shakeup in her cabinet.

The changes envisage reorganization of some ministries and personnel changes, government spokesman Rafal Bochenek told PAP news agency after the late Monday meeting. The move also signals that Szydlo, 54, is battling to hold on to her post amid a power struggle within the ruling Law & Justice party halfway into its four-year parliamentary term.

The government stands accused by the European Union of backsliding on democratic values, which could trigger unprecedented sanctions by Brussels on a member nation. But Szydlo and the party remain popular in Poland, partly thanks to a surge in economic growth spurred by welfare spending.

Szydlo vowed to tweak her cabinet this month and said she’s ready to continue in her post. But her future as premier is uncertain as Kaczynski, the kingmaker behind her government, was near a decision whether to take over and crack down on conflicts within the cabinet, the Polish edition of Newsweek reported.

“The prime minister’s proposals increase the role of Mateusz Morawiecki in overseeing the economy,” Deputy Prime Minister Jaroslaw Gowin told public radio Trojka on Tuesday. Morawiecki is currently also a deputy premier in charge of the finance and development ministries.

Future Uncertain

Szydlo is set to keep her job and announce details of the shuffle after Nov. 16, Jacek Sasin, a senior Law & Justice lawmaker, said in an interview for daily Rzeczpospolita on Tuesday.

Kaczynski picked Szydlo to head the government after she ran the party’s successful election campaign, which led to an unexpected majority in parliament. With no official position other than being a lawmaker, Kaczynski already sets course for the most-important government decisions and publicly chastises ministers.

While foreign leaders meet Szydlo during their visits to the country of 38 million, they also seek out Kaczynski. German Chancellor Angela Merkel this year met him during a visit to Warsaw. Former U.K. Prime Minister David Cameron, seeking support for EU overhauls before last year’s Brexit vote, had an audience with Kaczynski at a Warsaw hotel.

“Kaczynski becoming a prime minister would imply a much clearer power structure, a stronger government,” said Anna Materska-Sosnowska, a political scientist at Warsaw University. “That said, I doubt this will be the case.”

Szydlo’s Popularity

The approval ratings for Szydlo’s government improved over the last 12 months with Poles rating the cabinet higher on the economy, social policy, security and corruption fighting, according to a survey published by CBOS pollster.

Public support for Law & Justice rose to 40 percent this month compared with 37 percent it won in the elections, a survey by Kantar Public conducted among 1,000 adults showed. The two biggest pro-EU opposition parties were backed by a combined 28 percent of the electorate, the poll showed.

The zloty was little changed in thin morning trade on Tuesday. The yields on Polish benchmark 10-year bonds declined 2 basis points to 3.45 percent on Monday. The assets could face temporary downward pressure if Szydlo, who has “high approval ratings and whom the market has grown accustomed to” is replaced by Kaczynski, according to Grzegorz Maliszewski, the chief economist at Bank Millennium SA in Warsaw.

--With assistance from Adrian Krajewski

To contact the reporters on this story: Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net, Marta Waldoch in Warsaw at mwaldoch@bloomberg.net.

To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Wojciech Moskwa

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