Poland

Poland's Rafako said on Thursday that it was planning to file for bankruptcy, a day after Tauron demanded 1.3 billion zloty ($298 million) from a Rafako consortium that built a power plant the state-controlled utility says is faulty, Reuters reported. Rafako, which makes a wide range of boilers, disputes Tauron's claims for damages and fees, but is concerned they could impact its ability to conduct business operations and find an investor it is seeking, the company said in a statement.

Poland left borrowing costs unchanged as the threat of an economic recession overshadows concerns over the highest inflation in more than a quarter century, Bloomberg News reported. The country’s key interest rate was left on hold at 6.75% for the fourth consecutive month. Central bank Governor Adam Glapinski calmed an increasingly public dispute within the rate-setting Monetary Policy Council late last year as his warnings over excessive tightening dovetailed with signs that risks from inflation were subsiding as the peak neared.

The European Union will not pay out the vast majority of 75 billion euros ($73 billion) worth of development funds earmarked for Poland through 2027 unless Warsaw fixes the country's courts, a spokesman for the bloc's executive said on Monday, Reuters reported. Citing a flawed judiciary, the Brussels-based European Commission has already frozen some 35 billion euros assigned to Poland from a shared economic EU stimulus plan aimed at helping economies recover from the COVID-19 pandemic.

The National Bank of Poland (NBP) kept its main interest rate on hold at 6.75% on Wednesday, it said, opting to leave borrowing costs unchanged despite soaring inflation as it warned of an economic slowdown in the coming months, Reuters reported. With regional peers finishing monetary tightening cycles, Polish policymakers had also signaled that the end of rate hikes was near. However, with inflation rising to 17.2% in September, the highest since 1997, most economists had predicted that the cost of credit would continue to rise.

Poland’s foreign minister on Monday signed an official note to Germany requesting the payment of about $1.3 trillion in reparations for the damage incurred by occupying Nazi Germans during World War II, the Associated Press reported. Zbigniew Rau said the note will be handed to Germany’s Foreign Ministry. The signing comes on the eve of Rau’s meeting in Warsaw with German Foreign Minister Annalena Baerbock, who will attend a security conference.

Brussels is unlikely to back down on its demand that Poland respect the rule of law to receive post-pandemic recovery funds, officials said, despite threats from Warsaw that it could block decision-making within the European Union, Reuters reported. Poland would be eligible for 24 billion euros in grants and 11.5 billion in very cheap loans from the fund, designed to help member states become greener and more digitalised as their economies recover.

Poland's central bank raised its main interest rate by 50 basis points to 6.50% on Thursday, it said, delivering a hike below analysts' estimates as it balances the risks of an economic slowdown against surging inflation, Reuters reported. Some economists think Poland could tip into technical recession this year, but with inflation running hot most say further tightening is inescapable. "I believe that it is a very sensible decision from the MPC," said Piotr Bujak, chief economist at PKO BP.

Polish President Andrzej Duda has signed into law regulations replacing the controversial body disciplining judges with a new accountability panel in the hope it will persuade the European Union to release billions of euros in pandemic funds frozen over Poland’s political control of the judiciary, the Associated Press reported. Duda signed the changes into law late Monday, his office said.

Polish central bank Governor Adam Glapinski won parliamentary approval for a second, six-year term despite public anger over surging inflation and rapidly rising interest rates that is starting to chip away at the government’s popularity, Bloomberg News reported. The vote turned into a test of strength for the ruling coalition, which had struggled to secure sufficient support for Glapinski since his nomination by President Andrzej Duda in late January.

Poland urged its European Union partners on Monday to unite and impose sweeping sanctions on Russia’s oil and natural gas sectors over the war in Ukraine, and not to cave in to pressure to pay for their gas in Russian rubles, the Associated Press reported. The appeal came as EU ministers met in Brussels to discuss their response to Russia’s decision last week to cut gas supplies to Bulgaria and Poland. Energy giant Gazprom says the two countries failed to pay their bills in April. “We will call for immediate sanctions on Russian oil and gas.