Billions for flood recovery: high stakes for Prime Minister Tusk

Economic losses from the recent floods and the costs of reconstruction could amount to 0.5% of Poland's GDP, according to early estimates from economists. “We are certainly talking about tens of billions of z?oty”, said Finance Minister Andrzej Domański. Prime Minister Donald Tusk has assumed full responsibility for leading the flood response, aiming to weaken the position of his coalition partners in the process.

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In the Lower Silesian voivodeship, initial flood damages are estimated at PLN 3.65 billion, with the largest losses affecting the infrastructure managed by the Polish Waters Authority. The General Directorate for National Roads and Motorways (GDDKiA) has preliminarily assessed flood-related damages at around PLN 155 million. However, GDDKiA’s estimate represents only a fraction of the overall damage to road infrastructure, as the floods also destroyed roads managed by regional or local authorities. The railway infrastructure was also heavily impacted, with damages to Polish State Railways (PKP PLK) amounting to at least PLN 125 million. In addition, PKP Intercity has reported losses of PLN 100 million.

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Local authorities in Jelenia Góra, G?ucho?azy, and K?odzko have provided early cautious estimates of their damages. In Jelenia Góra, the flood caused PLN 750 million worth of damage. In G?ucho?azy, the cost of repairing municipal infrastructure alone could reach PLN 250 million. In K?odzko, initial estimates suggest losses of between PLN 100 and 110 million to the municipality's infrastructure, with repair and reconstruction efforts expected to take 5–6 years.

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Billions for reconstruction

Economists predict that the government’s spending on flood recovery will consume around 0.5% of GDP (approximately PLN 17 billion). In comparison, previous catastrophic floods in 1997 and 2010 required 2.5% and 1% of GDP, respectively. This disaster will therefore contribute to an increase in the national debt and budget deficit. Experts estimate that the flood will raise the budget deficit from the anticipated 5.4% of GDP to 5.6–5.7%.

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The Prime Minister has announced the appointment of a special envoy for post-flood recovery, tasked with coordinating efforts to rebuild the affected cities and infrastructure. The role will be filled by former Interior Minister and current MEP Marcin Kierwiński, who will play a key role in the reconstruction process, which is crucial for maintaining government support in the long term.

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Government response

Last week, the Council of Ministers declared a state of natural disaster in parts of the Lower Silesian, Opole, and Silesian voivodeships. This declaration, alongside the introduction of restrictions and obligations, paves the way for compensation payouts. Twenty thousand soldiers have been deployed to assist in the flood recovery efforts. A field hospital has been set up in Nysa, and a special bill is being prepared to provide additional aid to the areas affected by the flood.

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Financial assistance for flood victims has already been enabled, including grants of up to PLN 10,000 for immediate needs, up to PLN 100,000 for repairs to agricultural buildings, and up to PLN 200,000 for home repairs. Businesses have been offered tax deferrals, the option to pay in instalments, or have their tax liabilities written off, as well as extended deadlines for social security contributions. The Prime Minister also confirmed that the Borrower Support Fund would cover the housing loan repayments of flood victims for a year.

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The Ministry of Finance has created a PLN 1 billion emergency reserve for disaster relief and recovery efforts, in addition to the previously planned PLN 1.1 billion fund. In light of the floods, Finance Minister Domański also announced that the 2024 state budget would be amended within the next two weeks.

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According to a survey commissioned by Rzeczpospolita, 45% of Poles rated the government’s response positively, with only 16% offering a negative opinion and 15% giving a neutral assessment. This suggests that the government’s actions have been well-received, even outside its usual base of support.

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Tusk at the forefront

For Prime Minister Donald Tusk, the flood poses a significant political risk. He has subordinated the government’s efforts to flood management, personally leading the crisis team in the southern regions throughout the week. He has also sought to limit the media presence of government members to maintain control over the messaging. However, this has not spared the ruling coalition from public frustration over certain ministers’ remarks. Meanwhile, a behind-the-scenes media struggle is unfolding between Tusk and Deputy Prime Minister and Defence Minister W?adys?aw Kosiniak-Kamysz. The Deputy Prime Minister must be aware that, in the event of clear failures in the early stages of the flood response, Tusk is likely to shift the blame onto him.

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What is the current perception of the government’s flood response, and how is it playing out within the ruling coalition?

·???????? The greatest challenge remains the press conference on 13 September, during which Donald Tusk reassured the public, saying there was no reason to panic. Regardless of the context, the opposition has used this statement as evidence of Tusk downplaying the severity of the situation.

·???????? Kosiniak-Kamysz’s swift response, mobilising the Territorial Defence Forces in three provinces on 11 September and relocating them to potentially affected areas on 12 September, reflects unfavourably on Tusk. The PM had earlier promised the involvement of German troops, but the German side later clarified that no such forces had been sent to Poland. This statement was particularly poorly received, as Tusk had previously been critical of Poland’s "territorials".

·???????? Finance Minister Andrzej Domański announced financial support for flood-affected businesses, offering PLN 2,000 towards the purchase of cash registers. The opposition criticised this proposal as trivial and insufficient given the scale of the damage.

·???????? Similarly, a proposal for low-interest loans for flood recovery put forward by Climate and Environment Minister Paulina Hennig-Kloska (Polska 2050) was criticised by both coalition partners and the opposition. The minister later clarified that the support was intended for local authorities rather than individuals, but Tusk had to repeatedly reassure the public that flood victims would receive non-repayable aid.

·???????? Tusk also rejected a proposal from Szymon Ho?ownia to convene a special session of the Sejm, limiting the political capital that could be made from the flood. However, the PM cannot curtail the media exposure of the Defence Minister who oversees the wide-ranging military response.

What does this mean?

Donald Tusk stands to lose more than he could gain from the flood crisis. His own mistakes, along with those of others, will undermine his credibility. In recent days, he has aligned the government’s efforts with the flood response and placed himself at the forefront of the recovery. The stakes for Tusk could be even higher if he is considering a presidential bid. With elections on the horizon, the flood and the subsequent reconstruction will undoubtedly be central issues in the campaign. While Tusk has taken full responsibility during the crisis and is effectively mitigating its impact, he is also seizing opportunities to weaken his coalition partners where possible.

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