I won’t fight inflation by increasing unemployment, PM says Daily – The First News

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Pawel Supernak/PAP

The government will not fight inflation by increasing unemployment, Mateusz Morawiecki, the Polish prime minister, said in an interview Friday for the daily Dziennik Gazeta Prawna (DGP).

Morawiecki thus answered the DGP’s question of whether the government should not tighten its fiscal policy to support the Polish central bank, whose Monetary Policy Council had raised interest rates. According to DGP, this could help keep core inflation low.

“Combating inflation must involve the right combination of fiscal, monetary and regulatory policy. If regulatory policy is tight – and it is in many places, for example in financial markets – and monetary policy is restrictive, fiscal policy cannot be drastically tightened, as this would lead to a drastic drop in economic growth and a rapid increase in unemployment,” Morawiecki said.

“If anyone wants to convince me to fight inflation with soaring unemployment, forget it. We will tighten 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 ongoing dispute with the EU over the rule of law, which has blocked his access to an EU post-pandemic fund that was to fund a national recovery plan (KPO) .

The European Commission has challenged a series of reforms to the Polish judicial system, including the establishment of a disciplinary chamber for judges of the Polish Supreme Court. Subsequently, the Court of Justice of the EU ordered the chamber closed, but Poland refused to obey the order, resulting in its post-pandemic EU funding being blocked.

According to some observers, the conflict could also lead to Poland losing its cohesion funding.

Morawiecki said Poland believes it has met EU requirements for the disciplinary chamber and plans to apply for KPO funding in the coming weeks.

He added he was “not worried” about Poland’s cohesion funds, but admitted the problem could arise “if the matter falls into the hands of radicals”.

Commenting on the Russian-Ukrainian 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 supply arms to Ukraine, as it would show Russia “that everyone free stands behind Ukraine”.

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.

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