UPDATE 2-Poland names bank economist as new finance minister

Christian Lowe and Karolina Slowikowska
Wednesday, 20 Nov 2013 | 6:37 AM ET

* New Finance Minister is ING economist Mateusz Szczurek

* Change was part of wider cabinet reshuffle

* PM trying to reverse government's slide in polls

* Ministers for environment, education also changed

WARSAW, Nov 20 (Reuters) - Polish Prime Minister Donald Tusk named a bank economist as his new finance minister on Wednesday, an appointment designed to re-invigorate a government that many voters feel has lost its way after six years in power.

Mateusz Szczurek, 38-year-old chief economist for central Europe with Dutch bank ING in Warsaw, replaces Jacek Rostowski, who held the post for the past six years but had quarrelled with Tusk in the past few months.

Szczurek, one of a generation of younger Polish economists brought up after the fall of communism under the wing of incoming foreign banks, has no background in domestic politics and his appointment may shift the centre of gravity for financial policy-making in eastern Europe's biggest economy towards the prime minister's office.

"The finance ministry will be weak and just carry out policy measures dictated by the prime minister's office, and more specifically, the prime minister's chief adviser Jan Krzysztof Bielecki," said one leading Polish economist, who spoke on condition of anonymity.

Poland's economy is growing faster than its neighbours in the euro zone but is still close to its weakest in more than a decade. With the government's popularity sliding, Tusk is under political pressure to speed up growth before a 2015 parliamentary election.

Tusk told a news conference Szczurek would pursue the same macro-economic strategy as his predecessor. In his first comments after his appointment, Szczurek said his task was to guard public finances, and make sure Poland gets long-lasting benefit from European Union development funds.

Reuters had reported exclusively in August that Tusk was preparing to replace Rostowski within months.


The change was part of a cabinet reshuffle in which Tusk also named new ministers for the environment, sports, science and higher education and administration. Regional development minister Elzbieta Bienkowska was made deputy prime minister.

"For the next leap in our development, we need new energy," Tusk told a news conference at which he announced the changes.

Rostowski, a former academic who was born in London to a family of Polish emigres, was the public face of Poland's "economic miracle" - it was the only European Union state not to go into recession after the 2008 global financial crisis.

But his days were numbered after he failed to predict a sharp economic slowdown at the end of last year. The economy has since revived somewhat, but the 2013 budget he drafted assumed tax revenues that turned out to be wildly optimistic. That had to be revised, shaking Tusk's confidence in his minister.

Economists close to the government say Szczurek will have to make structural changes to fix the public finances.

Poland's government still spends far more than it earns in revenue. Rostowski masked that by changing the way public debt is calculated, and by finding short-term fixes, including a plan to transfer assets from private pension funds onto the state's balance sheet.

"Rostowski is an excellent tactician," said Dariusz Filar, a member of Tusk's Economic Council, an advisory body. "At the same time he ... fails to think strategically."

Economists say stop-gap solutions such as the pension transfer will buy Poland breathing space of two to three years, but after that the government will have to reform spending, including over-generous welfare for some sections of society.

But political imperatives are likely to interfere. A TNS Polska opinion poll published this week showed conservative but staunchly welfarist opposition party PiS with 31 percent support, while Tusk's Civic Platform had 22 percent.

Turning that rating around is a priority for Tusk, fighting to hold his party together and retain its leadership in the hope he can at least form part of a coalition administration after the next election.