Commerzbank’s Tatha Ghose highlights that President Karol Nawrocki has rapidly accumulated a record number of vetoes, blocking key legislation on crypto assets, taxation and healthcare. Ghose expects Nawrocki to continue obstructing reforms until the 2027 elections. With uncertainty over whether the KO coalition can retain a majority and PiS potentially returning to power, this persistent political risk is seen as a drag on Zloty valuation.

Nawrocki’s obstruction seen Zloty negative

"Poland’s President Karol Nawrocki has vetoed three more government bills in recent days, which has raised his tally to 36, the record for presidential vetoes (President Aleksander Kwasniewski (1995-2005) was the previous record holder with 35 vetoes). But Nawrocki's vetoes have come in the just 10 months whereas Kwasniewski's had accumulated over two 5-year terms."

"The vetoes were on the Crypto-Asset Market Act, which the government is using to try and bring EU-level regulation to the industry – the president alleges the government's proposals won't effectively regulate the business. Nawrocki also vetoed the Tax Ordinance and Fiscal Penal Code Act and the Publicly Funded Healthcare Services Act."

"In general, Nawrocki was always going to play an obstructive role in order to frustrate policymaking and reforms. He should be expected to continue vetoing government legislation until the autumn 2027 general elections. The ruling KO coalition has regained its footing somewhat and now leads in all polls, but there is a question of whether it would be able to form a majority again after the next election."

"And this keeps the prospect of opposition PiS returning to full government and also controlling the presidency alive. And, this prospect acts as a drag on the zloty’s valuation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)