Zyta Gilowska denied accusations that she had cooperated with the socialist secret service but gave in under pressure and surrendered her post late in the morning on Friday as her case was sent to court for verification. The PM Kazimierz Marcinkiewicz accepted the resignation but also instantly named a successor, which helped the market regain its footing. In fact, the swift nomination of the unknown PM aide Pawel Wojciechowski as a candidate for the Finance Minister post received an unexpectedly warm welcome from bonds. Wojciechowski and Marcinkiewicz reassured markets that the MinFin would stick to the PLN 30 bn. deficit target and the fiscal rigidity would remain the key goal of government policy. Hence even though Wojciechowski is completely unknown to financial markets and has no position in politics whatsoever, in terms of policy we should see a smooth transition from Gilowska. Nonetheless the lack of political clout could prove to be a major setback for Wojciechowski in dealing with the populist government coalition partners. The FinMin story completely overshadowed the core CPI release later in the day. Meanwhile net inflation remained unchanged at 1.0% y/y supporting the view that even the robust growth in consumption is not generating significant inflationary pressure.