Budget deficit lands Poland in hot water

Published: 20 February 2005 y., Sunday
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."
Šaltinis: Warsaw Business Journal
Copying, publishing, announcing any information from the News.lt portal without written permission of News.lt editorial office is prohibited.

Facebook Comments

New comment


Captcha

Associated articles

The most popular articles

Volcanic ash cloud crisis: Commission outlines response to tackle the impact on air transport

European Commission Vice-President Siim Kallas, responsible for transport, today presented to the College a preliminary assessment of the economic consequences for the air transport industry of the volcanic ash crisis. more »

EU draft budget 2011: The future beyond the crisis

Boosting economic recovery, investing in Europe's youth and in tomorrow's infrastructures are the priorities of the 2011 draft budget adopted by the Commission on 27 April 2010. more »

Vice President Almunia welcomes Visa Europe's proposal to cut interbank fees for debit cards

European Competition Commissioner Joaquín Almunia welcomes proposed commitments by Visa Europe to significantly cut its multilateral interchange fees (MIFs) for debit card payments. more »

Volcano impacts flower business

Because of the Icelandic volcano, flower growers in Colombia couldn't get their stems to markets in Europe. more »

Salgado expresses conviction that all EU countries will support aid for Greece

The Second Vice President of the Spanish government and Minister of Economy and Finance, Elena Salgado, on Sunday played down the importance of apparent fissures within the EU concerning the Greek financial crisis, expressing her confidence that all countries would support the aid package for this country, which will be accompanied by a tough budget-tightening plan. more »

The European conformity mark

Commission launches an information campaign on the CE conformity mark - designed to ease the free movement of goods around Europe and protect consumers. more »

Airport security - who will foot the bill?

If Europe's airports ever open again the introduction of new security measures like body scanners will be expensive. more »

Learning the lessons from Greece

After Eurozone Finance Ministers agreed measures to address Greece’s financial woes last Sunday, MEPs quizzed leading economic figures, including the chairman of Goldman Sachs - former financial advisors to the Greek government - on how to strengthen EU economic governance and improve reporting of national statistics. more »

A new strategic vision for the EU's Tourism Policy

The European Tourism Stakeholders Conference, being held in Madrid today and tomorrow, will explore ways and means to strengthen the visibility of tourism at a European level and to verify how the actions to promote a competitive EU tourism industry. more »

EBRD, IFC, FMO, and ADM Capital Launch Fund to Help Companies in CEE, Central Asia, and Turkey Recover from Crisis

The European Bank for Reconstruction and Development (EBRD), World Bank Group member IFC, and The Netherlands Development Finance Company (FMO) have joined up with the Asia Debt Management Hong Kong (ADM Capital) to establish a regional fund to invest in midsize companies facing financing difficulties as a result of the financial crisis. more »