M. Continuo

PM Tusk claims victory in Polish election



    By Gabriela Baczynska and Pawel Sobczak

    WARSAW (Reuters) - Polish Prime Minister Donald Tusk claimed victory for his centre-right ruling Civic Platform in a parliamentary election on Sunday that gives him a mandate to press on with cautious economic reforms.

    An exit poll showed Tusk's pro-business party was on course to win 39.6 percent of votes, short of an absolute majority but comfortably ahead of Jaroslaw Kaczynski's nationalist-conservative Law and Justice party on 30.1 percent.

    Kaczynski conceded defeat and the Peasants' Party, Tusk's junior coalition partner for the past four years, said it was ready to renew the alliance.

    Projections based on the exit poll, conducted by TNS OBOP for national television, showed the two parties would have enough seats to secure a majority in the Sejm, the lower house.

    "I wanted to thank all of those who voted for us and those who didn't because we will be together bearing responsibility for Poland for four more years," Tusk said to cheers at his party's headquarters.

    Financial markets are expected to welcome the result, which points to four more years of relative political and economic stability in the European Union's largest eastern member state at a time of crisis in the euro zone.

    Poland was the only EU member state not to sink into recession during the 2008-09 global economic crisis.

    Finance Minister Jacek Rostowski said he was ready to remain in his post and reiterated his intention to reduce Poland's budget deficit to below 3 percent of gross domestic product next year, in line with promises to the EU.

    An aide to Tusk said the prime minister would continue his policy of gradual economic reforms.

    "At a time of global crisis, such turmoil on the global markets, even gradual reforms will require brave decisions and our coalition will continue to do them effectively," said the aide, Michal Boni.

    PERSONAL TRIUMPH FOR TUSK

    The post-communist Democratic Left Alliance won 7.7 percent -- a surprisingly poor result -- the rural-based Peasants' Party 8.2 percent, and a new liberal grouping called Palikot's Movement 10.1 percent, the exit poll showed.

    Projected results based on the exit poll showed Civic Platform and the Peasants' Party should have 239 seats in the 45-seat Sejm.

    The result is a personal triumph for Tusk, 54, a pragmatic liberal conservative whose party is the first to win re-election since the end of communist rule in 1989 in the country of 38 million people.

    Tusk now needs to tackle Poland's large budget deficit, set to reach 5.6 percent of gross national product (GDP) this year, and to rein in public debt, seen at 53.8 percent of GDP, or face the risk of Poland being downgraded by ratings agencies.

    He is expected to ask the Peasants' Party to recreate the coalition that oversaw four years of strong economic growth and steered Poland smoothly through the 2008-09 global crisis.

    He also favours closer integration with the rest of the European Union.

    Kaczynski's calls for a halt to privatisation, for higher taxes on the wealthy and for a more combative stance in dealings with Poland's EU partners had unsettled investors.

    A government led by Kaczynski, 62, would have been likely to strain Poland's relations with its two large neighbours, Russia and Germany, as happened when it was last in power from 2005 to 2007.

    Kaczynski distrusts both Berlin and Moscow -- Poland was carved up under a Nazi-Soviet pact before World War Two -- and raised eyebrows during the election campaign by repeating in a new book his view that Berlin is trying to subdue Poland.

    Tusk has good personal ties with German Chancellor Angela Merkel and has maintained a cautious rapprochement with Moscow, despite strains over a plane crash last year that killed then-President Lech Kaczynski, Jaroslaw Kaczynski's twin.

    (Writing by Gareth Jones, editing by Timothy Heritage)