Polish victorious right to kick off coalition talks

WARSAW - Poland's centre-right parties crushed the ruling left in an election on Sunday, exit polls showed, but face tough coalition talks as they remain split on the economy and will battle a presidential vote on October 9.

Exit polls put the Law and Justice conservatives with 28 per cent ahead of their pro-business allies, the Civic Platform, with 25-26 per cent, the biggest triumph for heirs of the Solidarity movement since the fall of communism in 1989.

The two parties assured they wanted to rule together and said talks could start this week.

"We have long said we want this coalition and there are no reasons why it shouldn't happen," said Law and Justice leader Jaroslaw Kaczynski, the likely next prime minister.

Both promise to create more jobs, lower taxes and weed out corruption that tainted the four-year rule of the reformed former communists.

Reflecting a wider European debate, the two allies differ over how far to go in embracing the free market and how much welfare Poland, with wealth levels at half the EU average, can afford.

ORPHANED SOCIALISTS

The Civic Platform has promised to move fast with tax cuts, deregulation, privatisation and euro adoption and barely hid their disappointment that the conservatives' tough talk on crime and pledges to uphold the welfare state secured them victory.

"I think that voters with socialist views were orphaned by the collapse of the left and shifted to Law and Justice," said Bronislaw Komorowski, a Civic Platform leader.

"The Law and Justice programme at its core is socialist and Poland is fed up with socialism."

The conservative's lead over Civic Platform disappointed investors, who piled into the Polish zloty, bonds and stocks when opinion polls indicated earlier this month that free market champions would lead the next cabinet.

Economists say the zloty was set to weaken when markets open on Monday, also reflecting concern that the presidential campaign may disrupt coalition talks.

"The presidential campaign is still going on, so the battle between the Platform and Law and Justice will continue," said Ryszard Petru, chief economist at Bank BPH in Warsaw.

The October 9 vote that could go into a run-off two weeks later pits Civic Platform leader and front-runner Donald Tusk against conservative Warsaw mayor Lech Kaczynski.

The parliamentary campaign exposed the rift between the growing middle class, which wants more free market, and those who feel left behind after 16 years of painful reforms.

Political analysts say the Kaczynskis cleverly tapped that anger, painting the Civic Platform proposal of a 15 per cent flat tax as a gift for the rich at the expense of the poor.

- REUTERS