Polish conservatives from Law and Justice won the election

Jarosław Kaczyński and Beata Szydło, Law and Justice (©PAP)

Local elections in Ukraine.

Conservative GERB wins the local elections in Bulgaria.

Czechs are changing their pension system.

Estonia has the lowest government debt to GDP ratio.


Plenty of political comments in Poland after Sunday’s election. Official results are expected Tuesday morning, but it is now clear that Law and Justice (PiS) party will take all the power and swept Civic Platform (PO) away from the podium. „Despite Poland  being the fastest-growing economy in the EU during the PO’s eight-year term, the country looks to have grown tired of the ruling liberal, centre-right Civic Platform party (PO), and to have backed a return to power for the veteran nationalist Jarosław Kaczynski’s Law and Justice party (PiS)” – Financial Times wrote. PiS’s leaders Jarosław Kaczynski and Beata Szydło have already announced that the most important issues in the nearest future will be economic ones. The party is going to reshape Poland and commentators are curious what will be the financing. PiS’ promises were:

  • increasing the gross minimum wage to PLN12 (EUR2,8)
  • providing a monthly payment of PLN500 (approx. EUR120) per child,
  • withdrawing from the pension reform done by Civic Platform and allowing people to retire at the age of 60 (for women) and 65 (for men),
  • raising the tax free personal allowance to PLN8.000 when now it’s PLN3.100 (to EUR1882 to from EUR730).

The costs of the reforms are estimated to be PLN1bn. Where would PiS find money? For e.g. the party plans to impose tax on banks assets. “Polish people are expecting we will care for their businesses”, said Beata Szydło, the deputy chief of PiS who probably will be the next Prime Minister. She said the drafts of new bills are ready. An economist Ryszard Petru, the leader of a new Nowoczesna party, commented that Poland cannot afford such ideas. And that there is no PLN1bn in the state budget. Nevertheless PiS will form the government without any coalition thus will have a lot of autonomy in ruling the country.

The turnover in Sunday’s election was 51 per cent. The threshold for single parties was 5 per cent and for coalitions 8 per cent. The parties that will enter the parliament are (according to the most recent exit polls by IPSOS):

  1. Law and Justice (PIS) 37.7 per cent
  2. Civic Platform (PO) 23.6 per cent
  3. Kukiz’15 8.7 per cent
  4. Modern (Nowoczesna) 7.7 per cent
  5. Polish Peasant Party (PSL) 5.5 per cent

The United Left (Zjednoczona Lewica) got 7.5 per cent but – if official announcement will confirm this result – will not have any MPs as the threshold for coalitions is 8 per cent. Let us remember the victory of PiS came after the party’s candidate Andrzej Duda won Poland’s presidency in May 2015.


and more


132 political parties took part in local elections held on Sunday in Ukraine. The second round of elections is open to question when taking into account Kyiv and Lviv. Vladimir Klitschko will probably become Kyiv mayor, but the second round is quite possible according to show exit polls of Savik Shuster Studio (SSS). Klitschko got 38.4 per cent of votes while the member of Samopomich Association Serhiy Husovsky got 9.2 per cent. The other candidates were Boryslav Bereza – with 8.5 per cent of the votes, Volodymyr Bondarenko (of Batkivschyna party) with 8 per cent and Oleksandr Myrny (of Svoboda party) with the result of 6.6 per cent. In Lviv the leader is Andriy Sadovy, with 48.6 per cent of the votes followed by Ruslan Koshulynsky with 14.6 per cent of the votes.



According to the Gallup exit polls, the GERB party of Bulgarian Prime Minister Boyko Borisov, gained approx. 34.5 per cent of the vote nationally, in the national election held on Sunday. The second was the Bulgarian Socialist Party (BSP) which serves as the main opposition force, with 17.2 per cent of ballots. The third was the liberal Movement for Rights and Freedoms (DPS) reaching 14.6 per cent. Following were right-wing Reformist Bloc (RB) with 9.0 per cent and President (2002-2012) Georgi Parvanov’s ABV party with 4.3 per cent of the vote. Official results are expected Monday.


Referendum on e-voting

Bulgarians have also voted in a referendum on the introduction of an online voting. According to Alpha Research’s poll, more than 70 per cent of Bulgarians backed the idea of e-voting. Some 26.6 per cent said „no” to the idea. Now the proposal on e-voting would be sent to Parliament and the deputies would have to take it into consideration (as the referendum result is not binding). To make the outcome binding, the referendum should have a voter activity of about 3.5 million people.


Czech Republic

The voluntary second-pillar pension system would be eliminated by January 2016 – the Czech government has confirmed. As the Prime Minister Bohuslav Sobotka of Czech Social Democratic Party explained in late 2014 „the system was not beneficial for most Czech workers and had attracted relatively few members”. The system was introduced in 2013 by the previous government of Petr Nečas of Civic Democratic Party and funded by diverting 3 per cent of the 28 per cent first-pillar social security contribution alongside an additional 2 per cent of member’s gross wages. No more than 80.000 of recipients of the pillar would decide whether they like to have that 3 per cent to be returned to their bank accounts or reinvested info existing third-pillar funds.


EURO area and EU28 area

New data on government debt to GDP ratio was released by the Eurostat. The leader in budget planning in the whole European Union is Estonia with the budget deficit of 9.9 per cent. The second and the third are respectively: Luxembourg with 21.9 per cent and Bulgaria with 28.3 per cent.

Among the CEE countries the lowest public debt have:

  1. Estonia: 9.9 per cent
  2. Bulgaria: 28.3 per cent
  3. Latvia: 35.3 per cent
  4. Lithuania: 37.6 per cent
  5. Romania: 38.0 per cent
  6. Czech Republic: 41.7 per cent
  7. Poland: 51.0 per cent
  8. Slovakia: 54.5 per cent
  9. Hungary: 79.6 per cent
  10. Slovenia: 80.8 per cent

The government debt fell in Q2’2015 compared with Q1’2015 in euro area, as well as in the whole European Union. In general, the government debt to GPD ratio reached 92.2 per cent in eurozone and 87.8 per cent in the whole EU. The previous results were respectively 92.7 per cent and 88.1 per cent. But compared with the Q2 2014 – the ratio fell in the eurozone (from the level of 92.7 per cent) and rose in the EU28 (from the level of 87.3 per cent). The EU’s total debt is EUR 12.5 trillion.


Czech exports to Germany to jump to record CZK1.25 trillion

Exports from the Czech Republic to Germany will jump to a record CZK1.25 trillion in 2015 – Czech Association of Exporters reports. That means an increase of 7-8 per cent y/y. More than 30 per cent of all Czech exports head to Germany. The other destinations are Slovakia, Great Britain, the USA, France and Poland. The significant sectors are the automobile industry and manufacturing.


What’s up in indexes?

On Friday, October 23rd only SAX of Bratislava and UX of Kyiv dropped. The others were growing…

The Budapest Stock Exchange BSE was closed on Friday, October 23rd. It was 1956 Revolution Memorial Day. On Thursday, October 22nd it was up 1.56 per cent (at 21883.78 index points) compared to Wednesday (when it was 21548.56 index points). From year-end it’s up 31.per cent.

BET (of Bucharest) was up 1.12 per cent on October 23rd, increasing from 7045.23 index points on Thursday to 7124.30 index points on Friday. From year-end it gained 0.58 per cent.

PX (of Prague) increased from 987.08 index points to 986.39 index points Thursday to Friday. It was up 0.85 per cent d/d. And from year-end it’s up 4.19 per cent.

WIG20 (of Warsaw) gained 0.06 per cent on Friday. It climbed from 2106.29 index points on Thursday to 2107.43 index points on Friday. From year-end it dropped by 9.00 per cent.

OMXT grew by 0.12 per cent. On Friday it was 866.79 index points while the day before it was 865.75 index points. And from year-end it’s up 14.80 per cent.

OMXR (of Riga) was up 0.10 per cent at 581.65 index points (compared with 581.09 index points the day before). From year-end it’s up 42.55 per cent.

OMXV (of Vilnius) dropped by 0.36 per cent – from 484.40 index points on Thursday to Friday’s 482.68 index points. From year-end it’s up 6.69 per cent.

SAX (of Bratislava) lost 2.32 index points on Friday ending with 283.74 index points – compared with 290.48 index points the day before. From year-end it’s up 27.63 per cent.

SOFIX (of Sofia) grew by 0.73 per cent to 446.74 index points – from Thursday’s 443.49 index points. And from year-end it dropped by 14.43 per cent.

UX (of Kyiv) lost 0.09 per cent, decreasing from 777.79 index points to 777.11 index points Thursday to Friday. And from year-end it dropped by 24.79 per cent.

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