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New government faces cuts in expenditures

APA - Austria Presse Agentur
opublikowano: 26-09-2005, 09:53

Poland: Warsaw (Puls Biznesu) – The new government, to be formed of two central-rightist parties: Law and Justice (PiS) and Citizens’ Platform (PO), will heir public finances in a little bit better shape than the previous cabinet.

Poland: Warsaw (Puls Biznesu) – The new government, to be formed of two central-rightist parties: Law and Justice (PiS) and Citizens’ Platform (PO), will heir public finances in a little bit better shape than the previous cabinet.

However, the reform of expenditures, the so called “Haunser’s plan”, has not been implemented. The budget deficit will be lower than in 2001 and is going to amount to PLN 30.1 billion (EUR 7.7 billion) against PLN 32.6 billion four years ago, or 3.3 percent of GDP against 4.3 percent. It will not exceed 55 percent of GDP. The new cabinet will base on the budget draft prepared by the former government, so any changes may be minor.The tasks of the new government will comprise of cuts in social spending, reform pension system, and farmers insurance. Business expects lowering taxes. Poland must start getting ready to adopt the euro, which will require limiting the deficit and public debts.The new government will have to show much courage to cure public finances. Meanwhile, PiS and partly PO made it difficult themselves when they approved of the law for pensions for miners and VAT for construction materials. I’m afraid the coalition partners may withdraw from their election promises when they start losing popularity, Wojciech Kurylek, Kredyt Bank chief economist commented.(PLN 1 = EUR 0.256)

Poland/Economy/Public finances/Elections

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Podpis: APA - Austria Presse Agentur

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