WARSAW, Oct 16 (Reuters) – Poland’s liberal, pro-EU opposition looked to the road to forming the next government on Monday after official partial results and exit polls showed the ruling nationalists losing their majority parliamentary in the country’s most important elections in decades.

The ruling Law and Justice (PiS) party has repeatedly clashed with the European Union over the rule of law, media freedom, migration and LGBT rights since coming to power in 2015. Opposition parties have vowed to mend ties with Brussels and scrap reforms they say have eroded Polish democracy.

A late Ipsos exit poll released late Monday gave PiS 36.1 percent of the vote, which would translate to 196 lawmakers in the 460-seat lower house of parliament.

The opposition parties, led by former European Council President Donald Tusk’s liberal grouping Civic Coalition (KO), are expected to win a total of 249 seats, with KO winning 31.0% of the ballot boxes issued.

The official results after 63% of the voting districts had been counted put PiS at 37.5%, KO at 28.6% and its centre-right Third Way ally at 14.4%. In general, more conservative rural areas and small towns report their results faster than big cities where liberal parties are stronger.

The opposition’s victory in a vote seen by analysts as the most significant election for Europe in years could redefine the relationship between Brussels and the largest EU member state in central and eastern Europe.

Polish financial markets rose on the prospect of a Tusk-led government. The blue-chip WIG 20 (.WIG20) the share index was up 6.2% at 1320 GMT, while the zloty was 1.3% firmer.

“The expulsion of the nationalists will help restore damaged relations with the EU,” said Lee Hardman, senior currency analyst at MUFG bank.

“The zloty should continue to strengthen further in the near term in anticipation of improved relations with the EU which will help support growth and attract capital inflows.”

Tusk has said he would try to unlock some 110 billion euros in EU funds meant for Poland, but frozen over concerns about the rule of law.

‘Waiting calmly’

Even if the exit polls are true, Tusk and his Third Way and New Left allies may have to wait weeks or even months before getting their turn to form a government.

President Andrzej Duda, a PiS ally, has said he would give the winning party the first blow. On Monday, Duda asked for patience until the election results are known. “We are waiting calmly, democracy in Poland is stable,” he said.

However, with the far-right Confederation winning just 6.8%, below expectations, according to the late exit poll, PiS will struggle to forge a new government.

The leader of the Polish Peasant Party (PSL), part of the Third Way, ruled out joining a coalition led by PiS.

“The people who voted for us wanted change, they wanted PiS out of power,” Wladyslaw Kosiniak-Kamysz told private radio RMF FM.

The Organization for Security and Co-operation in Europe (OSCE), a rights watchdog, said Poland’s election had not been entirely free and fair.

“… the ruling party enjoyed a clear advantage thanks to its undue influence over the use of state resources and public media,” said Pia Kauma, head of the OSCE Parliamentary Assembly.

Poland’s electoral commission put turnout in Sunday’s vote at 73 percent, based on partial results, the highest since the fall of communism in 1989, underscoring the high stakes of this election.

Turnout among 18-29 year olds rose to 71% from 46% in the last parliamentary election in 2019, according to Ipsos.

In an aggressive campaign, PiS had presented the election as a choice between unchecked illegal migration under a government of leaders it said were beholden to foreign interests and a government that would protect Poland’s borders and traditions.

However, PiS faced accusations of democratic backsliding and undermining women’s rights after the government enforced a near-total abortion ban in 2021.

PiS was also accused of using lucrative positions in state-controlled companies to reward supporters.

“I hope that women now have more rights, that they feel more secure,” said Iga Frackiewicz, 43, a bank administrator.

“I also hope that nepotism will end, for example in state-owned companies and elsewhere.”

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