Incoming PO-led government bodes well for economic reforms.


The election victory of the liberal-conservative civic forum (PO) in Poland on 21Oct was larger than expected at 41.4% share of votes, which is goods news for the markets.
Together with the conservative peasants’ party PSL (8.9%) the PO will be able to form a stable majority.
The only risks to markets result from possible concessions by the PO to coalition partner the PSL or to the socialist LID on social spending in order to overturn any potential veto on legislation by president Lech Kaczynski. 

Asset conclusions: The PO win can be seen market positive in terms of econmic reforms, stable fiscal policy and political commitment to join the euro by 2012.