By Pawel Sobczak
WARSAW (Reuters) - Andrzej Duda, a youthful lawyer backed by the main opposition party, was sworn in as Poland's president on Thursday, marking a rightward shift in the EU's largest eastern member state and the start of a potentially awkward cohabitation with the government.
The president has limited powers in Poland but Duda may use his position to press the agenda of the opposition Law and Justice party (PiS) ahead of an October parliamentary election, when it hopes to oust the centrist ruling Civic Platform (PO).
PiS has maintained a strong lead in opinion polls since Duda, 43, unexpectedly defeated PO-backed incumbent Bronislaw Komorowski in Poland's presidential election in May.
"I believe in good cooperation with the government," Duda told the two chambers of parliament in his inaugural speech.
But he also reiterated his election campaign promises, which include cutting the retirement age, raising the tax-free income threshold and paying child benefits. Though conservative on social and moral issues, PiS favours a bigger state role in the economy than PO.
Experts say the campaign pledges would cost about 300 billion zlotys (£50.4 billion) by 2020, or about 3 percent of national output per year. Hours before Duda took the oath of office, the PO-appointed finance minister said Poland could not afford the changes.
As president, Duda -- who becomes Poland's sixth head of state since the fall of communism in 1989 -- can veto government bills and propose his own legislation. He is also head of the armed forces and has a say in foreign policy.
Duda, a strong critic of Russian actions in Ukraine, Poland's eastern neighbour, reiterated on Thursday his calls for stronger NATO security guarantees and an increased presence of the Western military alliance on Polish soil.
Earlier this week, Duda said Poland should be a part of peace talks in the Ukraine crisis, a sign of his ambition to increase Warsaw's international role.
PiS also takes a more sceptical approach towards the European Union and joining the euro than PO. In July, Duda's main foreign policy adviser urged a more cautious approach towards European integration.
MORTGAGES
One possible area of contention between Duda and the government is a PO-drafted bill on Swiss franc mortgages.
The bill, approved by parliament on Wednesday, will allow
more than half a million Poles who took out Swiss franc mortgages in the hope of enjoying low interest rates an option to convert their debt into zlotys at the current market rate.
It is a politically sensitive issue as many Poles struggle to repay their loans following a surge in the Swiss franc this year. The government plan could cost Polish lenders $5 billion (£3.2 billion) and banking shares plunged on Thursday.
It is unclear whether Duda will now sign the bill or veto it. During the campaign he proposed a full conversion at a historical rate, a move that could cost lenders up to $17 billion, possibly pushing some of them under water.
(Writing by Wiktor Szary; Editing by Gareth Jones)
