Poland's new PM: national interest key in EU future debate

By Agnieszka Barteczko and Anna Koper

WARSAW (Reuters) - Poland should defend its national identity and interests at a time when the European Union is debating its own future, the country's new Prime Minister Mateusz Morawiecki told parliament on Tuesday.

Warsaw has grown increasingly isolated in the European Union since the Law and Justice party (PiS) won power two years ago. Critics say its efforts to assert control over the courts and public media have subverted democratic standards.

Morawiecki, 49, was named prime minister last week in a government reshuffle, replacing Beata Szydlo as the PiS party gears up for elections over the next three years.

Morawiecki said Warsaw's economic policy - based on generous public spending and a growing focus on domestic capital instead of foreign investment - should not change.

Echoing the eurosceptic PiS calls for more say in Brussels' policy-making for national governments, Morawiecki said Poland's "sovereignty and tradition should be used in defending national interests".

"The future of the European project is being decided now," Morawiecki told deputies. "Poland fits perfectly into the European puzzle, but it cannot be forced in incorrectly. By doing so, you will destroy both the puzzle and the piece," said Morawiecki, a former bank executive.

Britain's decision to leave the bloc has also meant that Poland lost an important ally in its calls to curb further EU integration, while the election of French President Emmanuel Macron has fanned new fears in Warsaw of losing influence.

Morawiecki said Poland would oppose a vision of a multi-speed Europe, supported by Macron and which countries in the EU's east fear would mean deeper cooperation in the West at the expense of the bloc's single market.

"We don't want further divisions ... we oppose splitting of Europe between those are who better and those who are inferior."

Addressing economic policy, Morawiecki said Poland should strive to find a "golden middle" between a lean state "which abandons its citizens and a bureaucracy. We don't want either."

"Our national sovereignty and tradition are an advantage in efforts to modernise Poland, not a burden, as some are trying to tell us," he said.

PiS has gained in popularity since becoming the first in post-communist Poland to govern without a coalition. It has benefited from fast economic growth, record low unemployment, generous welfare and an increased emphasis on traditional Catholic values in public life.

However, private investment remains weak, with economists saying companies are reluctant to spend amid uncertainty over taxation and the government's influence over the economy.

Morawiecki, who as finance minister was also responsible for economic development policy before his appointment as prime minister, has long called for a greater role for domestic capital in the economy.

(Writing by Justyna Pawlak; Editing by Matthew Mpoke Bigg)