The government will not fight inflation by raising unemployment, Mateusz Morawiecki, the Polish prime minister, said in an October 21 interview for the Dziennik Gazeta Prawna (DGP) daily newspaper.
Morawiecki thus responded to DGP’s query whether the government should not tighten its fiscal policy to back the Polish central bank, the Monetary Policy Council of which had been raising interest rates. According to DGP, this could help keep base inflation down.
“The battle with inflation must involve an adequate mix of fiscal, monetary and regulatory policy. If the regulatory policy is tight – and it is in many places, for instance on the financial markets – and the monetary policy is restrictive, fiscal policy cannot be radically tight, because this would lead to a drastic slump in economic growth and a rapid rise in unemployment,” Morawiecki said.
“If anyone wants to convince me to fight inflation with soaring unemployment, they can forget it. We will be tightening our fiscal policy, but on the other hand we will continue to channel aid to the most needy social groups,” he added.
Morawiecki said the government’s anti-inflation policy included price caps on electricity and fuel, and aid to energy-sensitive sectors of the economy.
Morawiecki was also asked about Poland’s on-going rule-of-law dispute with the EU, which had blocked its access to an EU post-pandemic fund that was to finance a National Recovery Plan (KPO).
The European Commission has contested a series of reforms of the Polish justice system, most notably the institution of a disciplinary chamber for judges at the Polish Supreme Court. Subsequently, the EU Court of Justice ruled the chamber’s closure, but Poland refused to obey the order, which resulted in the blockage of its post-pandemic EU funding.
According to some observers, the conflict could also lead to Poland losing its cohesion funding.
Morawiecki said Poland believed it had fulfilled the EU’s requirements regarding the disciplinary chamber, and planned to file for funding under the KPO in the coming weeks.
He added that he was “not worried” about Poland’s cohesion funds, but admitted the issue could arise “if the matter falls into the hands of radicals.”
Commenting on the Russia-Ukraine war, Morawiecki said he feared an attack on Ukraine’s northern border by Russian and Belarusian forces.
He added that it was of major importance to provide Ukraine with arms, as this would show Russia “that the whole free world is standing behind Ukraine.”
When asked about his predictions for next year’s parliamentary elections, Morawiecki said he was sure the United Right would win a third term in power. (The First News/Business World Magazine)
