POLISH banks should be in Polish hands, or so says the ruling Law and Justice (PiS) party. Since PiS came to power in 2015, Polish ownership of banks’ shares has risen, last year surpassing 50% for the first time since 1999. What the government calls “repolonisation” is a form of creeping nationalisation, with foreign-owned banks being bought up (on a voluntary basis) by state-controlled companies. But while PiS extols the virtues of economic patriotism, economists are more wary.

“Repolonisation” has become a buzzword under PiS, applied to everything from shipbuilding to medicines. The government has also toyed with “repolonising” newspapers owned by foreign publishers, including Ringier Axel Springer, a Swiss-German media company. “Capital has a nationality, especially in this incredibly politically sensitive segment, the media,” says Jaroslaw Sellin, Poland’s deputy minister of culture.

PiS presents repolonisation as a return to earlier times. After communism collapsed in 1989, most banks in Poland were state-owned. Over the next decade, many were sold to foreign financial groups. By repolonising banks, the government is bringing the “family silver” home, says Mateusz Morawiecki, who was promoted to the job of prime minister in December. Observers have noted the irony. As recently as 2015, Mr Morawiecki was CEO of Bank Zachodni WBK, which is controlled by Santander, a big Spanish banking group.

After smaller takeovers, repolonisation culminated with the sale in June 2017 of a 32.8% stake in Pekao by UniCredit, Italy’s biggest lender, to PZU, Poland’s state-controlled insurer, and the Polish Development Fund (PFR) for 10.6bn zlotys (€2.5bn). The transaction gave Polish capital control of 53% of the banking sector.

Repolonisation is a matter of macroeconomics, not ideology, says Pawel Borys, the head of the PFR. But it chimes with the government’s broader statist instincts, involving economic interventionism and high social spending, says Janusz Jankowiak, the chief economist at the Polish Business Council. “Pride in Polish companies” and “economic patriotism” are driving the country’s economic development, said Mr Morawiecki in a speech in May.

PiS’s brand of repolonisation carries risks, economists warn. It increases state control over lending, which could then be used to fund risky projects rightly avoided by private banks. Meanwhile, further consolidation into fewer, state-controlled banks could reduce competition, pushing up the cost of loans and therefore consumer prices. Since Pekao was repolonised, there has been speculation that it could merge with PKO BP, Poland’s biggest bank (which has denied this). The new, state-controlled giant would have a market share of one-third and some 15m customers. Mr Borys suggested last year that it would be a “good solution”, in the context of increasing Poland’s role in the European banking market.

For now, the government has hailed repolonisation a success, with Mr Morawiecki calling it “a strong security buffer” against turbulence on international financial markets. Yet as other foreign banks mull selling their subsidiaries in Poland, there may be further takeovers. The Polish economy is in good shape, with low unemployment and solid growth. But for PiS, patriotic meddling remains in vogue.