May 25, 2015 / 9:30 AM / 2 years ago

Polish opposition cheers presidential vote win, stock market more wary

WARSAW (Reuters) - Poland’s main opposition party celebrated its first national election win in a decade on Monday, after its candidate for the presidency unexpectedly defeated incumbent Bronislaw Komorowski.

Andrzej Duda, presidential candidate of the Law and Justice Party (PiS), his wife Agata (R) and daughter Kinga flash Victory signs after the results of the exit polls on the second round of presidential elections in Warsaw, Poland, May 24, 2015. REUTERS/Slawomir Kaminski/Agencja Gazeta

The Warsaw stock market fell, as Andrzej Duda’s Law and Justice party is considered less business-friendly and less pro-European Union than the governing Civic Platform.

Banking stocks were hardest hit as the president-elect has called for new taxes on the sector.

Duda won Sunday’s run-off vote by 51.6 percent to 48.4 percent, official voting results showed.

With parliamentary elections due in late October, the defeat of Komorowski, an ally of Prime Minister Ewa Kopacz and a former Civic Platform lawmaker, will weigh on the party’s chance of re-election.

The change in Poland’s president could eventually lead to a change in Poland’s foreign policy, particularly in the European Union.

Duda, who will be sworn in on Aug. 6, has called for a more assertive stance by Poland in the EU, saying Warsaw should primarily “focus on its interests” and not those of its bigger partners like Germany or France.

The United States congratulated Duda on his election and said it looked forward to working with him. “We also thank President Bronislaw Komorowski for his support for Polish-U.S. ties and for his strong leadership in the region,” the White House said in a statement on Sunday.

In its eight years in power, Civic Platform dominated Poland’s political landscape and presided over rapid economic growth and rising salaries in Eastern Europe’s biggest economy, but Sunday’s vote reflected a sense that the fruits of economic recovery had not been shared equally.

Duda has backed a conversion of Swiss-franc denominated mortgages into zlotys at historical exchange rates to help homeowners with Swiss currency mortgages, which if carried out, could cost banks billions of zlotys.

Poland’s leading banks PKO PKO.WA, Pekao PEO.WA, and BZ WBK BZW.WA fell by up to 5 percent on Monday.

He has also called for a tax on bank assets and for curbing foreign ownership in the banking sector.

Law and Justice is close to the Catholic church and socially conservative, and Duda supports more state support for pensioners and has said he would do everything to reverse a hike in the retirement age.

‘LISTENING TO ALL POLES’

Polish government bond yields rose slightly on Monday in reaction to the election result.

“There is a risk linked to uncertain election results in the autumn, and there is also a risk of fiscal easing. These two risks are being priced in by investors today,” said Andrzej Bowtruczuk, a bond dealer at mBank in Warsaw.

Latest opinion polls give Law and Justice a marginal lead over Civic Platform. Law and Justice parliamentary caucus head Mariusz Blaszczak said on public radio he expected party leader Jaroslaw Kaczynski to be the next prime minister.

The zloty currency EURPLN=D3 gained on Monday, recouping all of the losses it sustained in after-hours trading on Sunday. The zloty traded at 4.1020 at 1637 GMT (12:37 p.m. EDT).

In Poland, the president nominates the head of the central bank, as well as heads the armed forces and has a say in foreign policy. The president can initiate and veto new legislation.

Duda has yet to spell out his plans for the presidency, but he is not expected to force through big legislative changes during the current parliament.

“He realizes that he will have to cooperate with the government, but this is a president who listens to all Poles. He will not sign bills that are directed against them,” said Law and Justice deputy head Beata Szydlo.

The head of Civic Platform’s parliamentary caucus, Rafal Grupinski, said he feared Duda’s win would mean “potential state modernization moves” would be blocked for the next five years.

“There are very difficult five years ahead of us, and we need to tell the voters as much,” Grupinski told reporters on Sunday.

But many Poles, sensing the vaunted “economic miracle” has passed them by, were ready for change.

“Economic growth? For the average citizen it is hardly perceptible,” said Zbigniew Pela, 53, a railway worker who voted for Duda. “They create good living conditions for some social groups who have their businesses, and not for ordinary citizens.”

Additional reporting by Wiktor Szary, Pawel Florkiewicz, Adrian Krajewski and Marcin Goettig in Warsaw, and Jeff Mason in Washington; Writing by Christian Lowe and Marcin Goclowski; Editing by Susan Fenton and Peter Cooney

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