Poland’s top politician backs away from aid for borrowers

WARSAW, Poland – The leader of Poland’s ruling party said Friday that the government cannot keep pre-election promises to help people hit by sharp increases in repaying Swiss franc loans, and that borrowers should instead “take matters in their hands” and seek compensation in courts.

Jaroslaw Kaczynski, the country’s dominant political leader, said the government had to be mindful of the whole economy and could not “take action that would shake the banking system” and hit all Poles.

“A responsible government absolutely cannot do that,” Kaczynski said.

In reaction, stock indexes of many banks soared at the Warsaw Stock Exchange, by as much as 4 per cent in some cases.

The unexpectedly difficult situation of people paying back loans drawn in Swiss francs has been the subject of heated public debate for years, ever since the value of the Swiss franc started increasing strongly against the Polish zloty.

Someone who drew a loan valued at 74,000 Swiss francs in 2008, for instance, faced payments of 1,500 zlotys a month. They would now be paying almost 2,100 zlotys, according to the wGospodarce.pl website.

In its largely populist and victorious electoral campaign, Kaczynski’s Law and Justice party promised to help some 500,000 people repay such loans. The proposals included pinning the loans to a lower exchange rate or making banks foot some part of the interest payments.

Last year, the government had called for a one-time conversion of these loans from Swiss francs to zlotys. But it backed down in August, instead proposing voluntary conversion of loans and requiring lenders to reimburse clients for excessive currency exchange fees.

Kaczynski’s comments drew angry reaction from the opposition.

“Due to such promises (of help) Law and Justice won the elections but is now turning its back on those it had made the promises to,” said Jan Grabiec of the pro-business Civic Platform that ruled from 2007-2015.

Speaking Friday on state radio, Kaczynski also said that the sweeping reforms the government is making in many areas, from the judiciary to education, are intended to remove remnants of the communist era and the later “pathologies” and are needed in almost every walk of life.