The white scaley chalk is effloresence.

Effloresence is caused by water penetrating the block from outside, dissolving minerals in the block, then depositing the dissolved minerals as crystals on the inside as the water evaporates.

Effloresence deposits are removed using a muriatic acid solution.

But removing the deposits without also treating the water problem from the outside will only leave you with badly painted walls.

One must treat the source of the problem, water penetrating the block first, and only then can the inside be properly coated.