Karol Nawrocki has been the President of Poland since 6 August 2025. During the election campaign, the president-elect made it clear that he would not support government bills aimed at restoring constitutional order in the judiciary — including those concerning the status of so-called “neo-judges” or repairing the Constitutional Tribunal.[1]
Nawrocki intends to suggest his own proposals regarding the judiciary. The future president has also announced that he would block privatization[2] and attempt to introduce tax breaks costing around PLN 19 billion annually[3] — all this. At the same time, the EU’s excessive deficit procedure against Poland is initiated. The parliamentary majority faces the difficult task of governing effectively. Nevertheless, there are still areas where essential, albeit limited, reforms can be implemented, despite potential obstruction from the new president.
What can the government do without passing new laws?
During the current parliamentary term, out of 184 laws passed, President Andrzej Duda vetoed only six and referred seven to the Constitutional Tribunal. In total, Duda blocked just 7% of the bills presented to him for signature.[4] Of course, even announcements of vetoes — for example, of laws restoring the rule of law — can partly delay government work and create uncertainty over the adoption of planned reforms. However, this should not entirely halt work on necessary reforms. From a political perspective, the Sejm should continue to pass and present essential bills to the president for signature. If the president signs them, positive changes will come into force; if not, the political responsibility will fall on the president, backed by PiS.
Even in the least favorable scenario for the government — a complete blockade of new laws — some options remain available. The primary mechanism is, of course, changing government regulations. One must bear in mind, however, that executive acts cannot, on their own, restrict individual rights or impose new obligations[5] — these are reserved exclusively for statutes.
Yet certain positive changes via regulations are still possible. These include altering inspection practices, simplifying forms, easing statutory obligations imposed on specific entities, and even certain tax-related changes. For example, although the abolition of specific taxes requires a statute, some loopholes (left by PiS) remain. Article 146ef in connection with Article 146ej of the VAT Act allows the Minister of Finance to apply reduced VAT rates to selected categories of goods through regulation. Finally, the Minister of Finance can suspend tax collection altogether with an executive act.
Privatization without legislation
A particular opportunity for the government to carry out necessary changes, even in the face of presidential obstruction, lies in privatization. The share of state ownership in the Polish economy is very high — according to some studies, it’s the highest in the European Union.[6] Politicians of the ruling coalition, including Prime Minister Donald Tusk, have announced the intent for the depoliticization of state-owned companies.[7] Yet genuine depoliticization of the economy, meaning the reduction of political influence, can only be achieved through a decrease in state ownership[8].
The share of state-controlled entities in the Polish economy varies depending on the measure used. In 2016, the International Monetary Fund estimated it at around 17% of value added in the economy and 13% of employed workers — the highest share among post-socialist EU member states.[9] In some sectors, state ownership is even higher. For example, in the banking sector, it stands at 48.7% while among the 100 largest companies it reaches 49.6%[11].
There are clearly too many state-controlled companies in Poland. Privatization is necessary — and in principle, can be conducted without statutory changes. Unfortunately, there are two major exceptions to this rule. First, some state-controlled companies are explicitly named in statutes. For instance, the Broadcasting Act lists companies such as TVP (Polish Television) and Polskie Radio (Polish Radio). Similarly, the State Forests company (Lasy Państwowe) is specified in the Forestry Act. Secondly, the State Property Management Act of 2016 identifies 30 companies whose shares cannot be sold by the State Treasury.
The sale of shares is prohibited in the following companies:
| 1) Agencja Rozwoju Przemysłu; | 2) Centralny Port Komunikacyjny; |
| 3) Enea; | 4) Energa; |
| 5) Giełda Papierów Wartościowych; | 6) Grupa Azoty “Puławy”; |
| 7) Grupa Azoty; | 8) Grupa Azoty Zakłady Chemiczne “Police”; |
| 9) Grupa LOTOS; | 10) Jastrzębska Spółka Węglowa; |
| 11) KGHM Polska Miedź; | 12) PERN; |
| 13) PGE Polska Grupa Energetyczna; | 14) PKP Cargo; |
| 15) PKP Polskie Linie Kolejowe; | 16) Poczta Polska; |
| 17) Polska Grupa Lotnicza; | 18) Polska Grupa Zbrojeniowa; |
| 19) Polska Wytwórnia Papierów Wartościowych; | 20) Polski Fundusz Rozwoju; |
| 21) Polski Holding Nieruchomości; | 22) Polski Holding Obronny; |
| 23) Polski Koncern Naftowy Orlen; | 24) Polskie Górnictwo Naftowe i Gazownictwo; |
| 25) Polskie Koleje Państwowe; | 26) Powszechna Kasa Oszczędności Bank Polski; |
| 27) Powszechny Zakład Ubezpieczeń; | 28) Tauron Polska Energia; |
| 29) Totalizator Sportowy; | 30) spółka celowa, o której mowa w przepisach ustawy z dnia 11 sierpnia 2021 r. o przygotowaniu i realizacji inwestycji w zakresie odbudowy Pałacu Saskiego, Pałacu Brühla oraz kamienic przy ulicy Królewskiej w Warszawie |
Unfortunately, the largest state-owned companies — and those most distorting competition — are covered by a statutory ban on privatization. The only permitted option is the transfer of their shares to other SOEs, which in practice means the possibility of mergers between state-owned companies. The remaining state-controlled enterprises may be privatized — the sale of shares is permitted with just the consent of the Council of Ministers.
State ownership – what exactly are we talking about?
| State-owned enterprise | State Treasury company | Indirectly state-controlled company | Local government-controlled enterprise |
| There are only 16 state-owned enterprises sensu stricto. Some are in liquidation. In practice, this category is of little significance, as it covers relatively small entities. | Companies such as Orlen or KGHM. These are the firms we usually mean when we talk colloquially about state-controlled enterprises. The register of companies in which the State Treasury holds shares includes around 400 entities.
|
For example, Fabryka Cukierków “Pszczółka” Sp. z o.o. – Sweets Factory. A company in which shares are held by other SOEs or by the Polish Development Fund and other entities, rather than directly by the State Treasury. The exact number of such companies is difficult to determine. | For example, MPO (waste management) or MZA (public transport), as well as some sports clubs operating in the form of companies. Currently, there are about 2,600 companies in Poland whose sole shareholder is a local government. |
The state controls companies such as Pomorsko Mazurska Hodowla Ziemniaka Sp. z o.o (potato farm). This entity even brags of being a company of “strategic importance for the national economy.”[12] Still state-owned are Fabryka Cukierków Pszczółka (sweets factory), Dobre z Lasu (a mushroom store), as well as horse stud farms.
In addition, the state controls, among others:
- Meat-processing plants;
- Fur-processing plants;
- Cold storage facilities;
- A cable factory;
- A flooring factory;
- A dozen or so animal breeding centers;
- A shoe factory;
- A woodworking machinery factory;
- A plywood factory.
There are no economic reasons for the state to be engaged in selling mushrooms online or in horse breeding. Moreover, privatizing these enterprises would not carry political risk. In the banking sector, reducing the share of state ownership could be achieved, for instance, through the sale of Alior Bank, controlled by PZU (a solution already considered before[13]), as well as Pekao SA, controlled by a PZU–PFR consortium. A significant reduction of state ownership in the economy — though excluding the largest and most important enterprises — requires at most the consent of the Council of Ministers.
Another area for potential privatization, not requiring statutory changes, consists of subsidiaries of state-owned companies. If the shareholders of these subsidiaries are not exclusively state-owned legal entities, even the consent of the Council of Ministers is not required.
One such example is Polska Press, owned 100% by Orlen. The sale of this company by Orlen is possible with the consent of its supervisory board. A similar situation exists in the aforementioned Alior Bank — since no share package is owned directly by the State Treasury or by a state-owned legal entity, its sale does not require the approval of the Council of Ministers. The ownership structure differs in the case of Pekao SA, where part of the shares belong to the PFR, a state-owned legal entity. The sale of this particular shares’ package would require the approval of the Council of Ministers.
Conclusions
It is also worth remembering one of the most important statutes — the state budget. In the case of the budget, the president has no possibility of exercising an effective veto. The government should pay particular attention to the budget law — especially given that Poland currently records the second-highest deficit in the EU[14] and is subject to the excessive deficit procedure.
A presidential veto should likewise not halt the work of parliament and government. Andrzej Duda vetoed only 7% of the bills presented to him for signature. Even if Karol Nawrocki vetoes more, the government should nonetheless pursue reforms — regardless of the president’s stance.
References
[1] Nawrocki jako prezydent zaproponuje rozwiązanie problemów wymiaru sprawiedliwości, PAP, 28.05.2025, https://biznes.pap.pl/wiadomosci/gospodarka/nawrocki-jako-prezydent-zaproponuje-rozwiazanie-problemow-wymiaru
[2] Nawrocki: nigdy nie zgodzę się na prywatyzację lasów, naszego narodowego dobra, PAP, 30.04.2025,
[3] PIT 0% dla rodzin: Karol Nawrocki obiecuje 280 tys. zł zwolnienia z podatku dochodowego, INFOR, 28.06.2025,
https://www.infor.pl/prawo/wybory/prezydenckie/6961513,pit-0-dla-rodzin-karol-nawrocki-obiecuje-280-tys-zl-zwolnienia-z-podatku-dochodowego.html
[4] Weta Andrzeja Dudy za rządów Tuska. Ile ich było?, onet.pl, 11.06.2025,
https://www.onet.pl/informacje/demagog/weta-andrzeja-dudy-za-rzadow-tuska-ile-ich-bylo/qz6xlfd,30bc1058
[5] Art. 7 in conjunction with Art. 31(3) in conjunction with Art. 92 of the Constitution.
[6] Jabrzyk B., Komunikat FOR 9/2024: Własność państwowa – nowy rząd idzie w ślady PiS. https://for.org.pl/2024/03/18/komunikat-9-2024-wlasnosc-panstwowa-nowy-rzad-idzie-w-slady-pis/
[7] Premier zapowiada radykalną propozycję ws. odpolitycznienia spółek SP, PAP, 20.06.2025, https://biznes.pap.pl/wiadomosci/gospodarka/premier-zapowiada-radykalna-propozycje-ws-odpolitycznienia-spolek-sp
[8] Zieliński M., Odpolitycznienie przedsiębiorstw kontrolowanych przez państwo. https://for.org.pl/pl/a/9454,odpolitycznienie-przedsiebiorstw-kontrolowanych-przez-panstwo
[9] IMF, Reassessing the Role of State-Owned Enterprises in Central, Eastern, and Southeastern Europe, 2019, Figure 4.
[10] KNF, Dane miesięczne sektora bankowego – Aprill 2025
[11] M. Bałtowski, G. Kwiatkowski, State-Owned Enterprises in the Global Economy, 2022, Routledge, pp. 299-300.
[12] https://pmhz.pl
[13] PZU przestanie być właścicielem Banku Pekao i Alior Banku? Bank.pl 03.09.2024, https://bank.pl/pzu-przestanie-byc-wlascicielem-banku-pekao-i-alior-banku/
[14] Zieliński M., Michnik M., Komunikat FOR 23/2024: Budżet na 2025 rok – deficyt (nie)odpowiedzialności. https://for.org.pl/2024/10/16/komunikat-23-2024-budzet-na-2025-rok-deficyt-nieodpowiedzialnosci/
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