Polish Presidential Election: A Crossroads for EU-Aligned Investments – Act Now Before the Vote

The 2025 Polish presidential election, set for May 18 with a potential runoff on June 1, marks a pivotal moment for investors in EU-aligned sectors. The outcome will determine Poland’s trajectory on critical issues like EU funding access, regulatory alignment, and foreign direct investment (FDI). For those positioned correctly, this election could unlock substantial gains—or, conversely, expose portfolios to significant risk. Below, we dissect sector-specific exposures and outline actionable strategies to capitalize on the political landscape.

Pro-EU Victory: A Catalyst for Infrastructure & Energy Plays

A victory for pro-EU candidates like Rafał Trzaskowski (Civic Platform) or Szymon Hołownia (Poland 2050) would signal continuity with Prime Minister Donald Tusk’s centrist policies. This alignment with Brussels increases the likelihood of Poland securing the remaining €20 billion in EU recovery funds earmarked for infrastructure, renewable energy, and digital projects. Sectors to prioritize include:

1. Utilities & Renewables:
2. PGE (WSE: PGE): Poland’s largest electricity generator, which has aggressively expanded renewable energy capacity. Pro-EU policies could fast-track permits for wind and solar projects, boosting PGE’s growth prospects.

4. Rail and Transportation:

5. PKP (WSE: PKP): The national rail operator stands to benefit from EU-funded upgrades to its aging infrastructure. A pro-EU outcome would accelerate projects like the Warsaw–Kraków high-speed rail link, driving revenue growth.

6. Banking (Conditional):

7. Banks like mBank (WSE: MBK) and Pekao (WSE: PEK) could see stabilized lending environments if EU ties remain strong. Pro-EU policies reduce regulatory uncertainty, supporting credit growth and cross-border transactions.

Anti-EU Risks: A Warning for Banks and FDI-Dependent Sectors

A Eurosceptic victory—particularly by candidates like Sławomir Mentzen (PolExit) or Grzegorz Braun—would threaten Poland’s access to EU funds and destabilize investor confidence. Key risks include:

1. Banking Sector Vulnerabilities:

2. Anti-EU rhetoric could trigger capital flight, pressuring banks’ liquidity and credit quality. **** highlight sensitivity to political instability.

3. FDI Inflows at Risk:

4. Foreign investors in manufacturing (e.g., automotive) and tech sectors rely on Poland’s EU membership for tariff-free access to European markets. A “PolExit” scenario could deter FDI, hurting companies like Asseco (WSE: ASECO), which depends on EU-linked IT contracts.

5. Zloty Depreciation:

6. A Eurosceptic outcome would likely weaken the Polish zloty (PLN), raising import costs for firms reliant on EU-supplied inputs. **** underscores this risk.

Strategic Investment Playbook for the Runoff Period

1. Aggressive Positioning in EU Subsidy-Driven Stocks

• Buy PGE and PKP: These stocks are directly tied to EU recovery funds. Even a runoff scenario creates a “wait-and-see” rally as pro-EU candidates consolidate support.
• Short banks if Eurosceptics lead polls: Use derivatives to hedge against potential declines in mBank or Pekao if anti-EU candidates gain traction.

2. Hedging with Zloty Forwards

• Pair equity bets with zloty currency forwards to offset exchange rate risk. A pro-EU outcome could stabilize the PLN, while a Eurosceptic surge would amplify losses without hedging.

3. Focus on Near-Term Catalysts

• The May 18 election is the primary catalyst, but runoff dynamics on June 1 will test investor sentiment. Monitor polling trends and campaign rhetoric on key issues like EU funding and migration policies.

Conclusion: Act Before the Crossroads

The Polish election is a binary event with outsized implications for EU-aligned sectors. Pro-EU candidates offer a clear path to unlocking stalled infrastructure projects and stabilizing banking stocks, while Eurosceptic victories threaten to derail progress. Investors should:
- Overweight PGE and PKP immediately, targeting a 10–15% upside if pro-EU candidates prevail.
- Hedge PLN exposure using forwards to neutralize currency risk.
- Avoid banking equities unless Eurosceptic momentum fades.

The window to position before the runoff is closing. Act decisively—this election will define Poland’s economic trajectory for years to come.