Poland has received a dressing down from the European Commission

The EC says Poland needs to be more aggressive with its fiscal adjustment if it wants to enter the eurozone. The response came after Poland presented an updated version of its convergence program, known as the Hausner plan, after Deputy Prime Minister Jerzy Hausner, that was markedly less ambitious than the original version. It sets out a gradual reduction of the budget deficit from 5.4 percent of GDP in 2004 to 2.2 percent by 2007. In the original plan, the budget deficit was planned to be just 1.5 percent of GDP by 2007. These new figures are based upon real GDP growth of 4.9 percent on average in 2005 and 2006, down from 5.7 percent in 2004. In 2007 the economy is predicted to rebound with a 5.6 percent growth in GDP, something which analysts remain skeptical about. In order to meet the criteria for entry to the EU, Poland would have to fully implement the comprehensive measures contained within the Hausner plan. This would mean a 4.7 percent impact on GDP for 2005-2007 and, although Poland has satisfied Brussels that it can correct the budget deficit in the short term, the risky strategy leaves many obstacles to getting the deficit below three percent of GDP by 2009, a key requirement for entering the single currency. EC officials also criticized the government's lack of specific steps to secure a long-term balance of public finances. However, the Polish government remained resolute in the face of the EC critique. "Poland will enter the eurozone in 2009," Hausner asserted. "The government maintains its convergence plan. I know nothing about any change of the government stance." Addressing the EC, Hausner said: "Your anxiety is understandable, but we do what we think is proper. Stop worrying unnecessarily."