Poland is going to vote in a presidential runoff Sunday. The country is one of the few economic success stories in Europe.
Its economy is growing far faster than some of the larger economies. It grew 2.9% last year, eclipsing 2.8% growth in the U.S. And it slammed Europe’s three largest economies with minus 0.2% growth for Germany and plus 1.1% for both in France and the U.K.
Poland’s economy has grown 11 times larger since 1986, almost twice as fast as the U.S. did over the same period.
“The last year or two has seen a boom, and it’s getting publicity,” Mateusz Urban, a senior economist at Oxford Economics in Warsaw, Poland, told FOX Business earlier this year. “There really is a European tiger right at Germany’s door.”
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The success is partly due to the unleashing of Poland’s human capital as well as the well-known Polish work ethic. On top of that, Donald Tusk winning the role of prime minister in 2023, taking over from the right-wing Law and Justice Party, has helped. Before Tusk, the government was targeted and sanctioned by the European Commission over claims it did not have an independent judiciary. Critics have also wondered why Tusk escaped sanctions over the closing down of some Polish media.
Now Poland will choose a new President in a runoff between the center left and the right wing. After the initial vote earlier this month, there are now only two candidates, Warsaw Mayor Rafal Trzaskowski, a left-leaning candidate, and Karol Nawrocki, backed by the right-wing Law and Justice party.
As of Thursday, Trzaskowski was leading 48% to 47% over Nawrocki, according to a poll of polls published in Politico. The two candidates are statistically neck and neck, but whatever happens, one of them will take over from the current president.
“[If Trzaskowski] wins the election, both the government and presidency would be pro-European Union,” Ben Habib, a former co-deputy leader of the Reform UK party, told FOX Business. “There’d be no inherent checks on the legislative agenda.”
Still, it could also go the other way if the presidency goes to Nawrocki. “While the presidency in Poland is largely ceremonial, the election outcome with either support or hinder the Tusk government’s EU-aligned reform agenda,” Elias Haddad, senior markets strategist at Brown Brothers Harriman in London told FOX Business.
“The President has veto power and Tusk does not have a three-fifths majority in the Sejm (lower house) to override a veto,” Haddad said.
Adding to the interest in the contest has been the Trump White House, which is said to be backing Nawrocki. Indeed, earlier this month he met President Trump at the White House as well as DHS Secretary Noem who was at CPAC in Poland, where she gave her backing to him too.
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There is at least one similarity between both candidates. They want to cut taxes.
“It’s easier to make promises when you aren’t in charge,” Urban, senior economist at Oxford Economics in Poland said. “The difference is in the shape not the idea.”
He said a win by Nawrocki would put far more pressure on fiscal stability because the reduction in taxes would likely be steeper than what Trzaskowski proposes.
Either promise of lower taxes might be a dream given its huge spending over the last four years. Last year, Poland’s defense spending hit 4.2% of GDP, the highest percentage of any NATO member, and that spending partly led to an annual fiscal deficit of 6.6% of GDP last year, up from 1.8% in 2021, according to Trading Economics. Much of the spending has gone to the defense budget after Russia invaded Ukraine in February 2022.
“The EU is going to do all it can to get Trzaskowski to win, but rising discontent and the negative impact of EU policies like the Green New Deal and the 2030 Agenda may give power to the nationalist candidate,” Daniel Lacalle, chief economist at Tressis in Spain, told FOX Business Digital.
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