Finance Minister Jacek Rostowski has presented his plan before the lower house of parliament to handle the financial crisis in Poland.
Central to the government’s plan is that it will not increase the national deficit still further, a strategy that has been undertaken in countries such as the UK.
“Our path through the crisis must secure the safety of Poles, so we are looking for a Polish answer to a Polish problem,” stated the Minister this morning.
He added that the financial crisis has manifested itself differently in Poland than in other countries.
“Poland has a healthy banking system – this is our strength. Poland also has a large national debt – this is our weakness,” Rostowski stated.
He compared the situation of Poland to that of the UK, where the banking system is a failure but national debt is much less. In 2008, the percentage rates for two-year bonds issued in Poland and the UK were similar – about 5.7 percent. This year, Poland’s percentage rates on two-year bonds stayed at that rate while Great Britain pays 1.5 percent. However, Rostowski claimed that other countries are in a worse situation, citing the example of Hungary whuch pays 11 percent interest on two-year bonds.
“Poland is somewhere in the middle. There is some danger that going in the direction of increasing the deficit, we would end up like Hungary. We never want to be in that situation. Poland will not become a second Argentina and the government under Donald Tusk will not burden future Polish generations,” added Rostowski.
The Finance Minister told parliamentarians that the country needs to borrow 155 billion zloty (40 billion dollars) this year – more than eight times the current budget deficit. Poland must get this money by selling government bonds, which will not be easy, according to Rostowski, because other countries, like the US, Germany or the UK, are first in line for credit bailouts.
Jacek Rostowski assured parliament that the government knows what to do in order to turn a pessimistic situation in Poland (1.7 percent GDP predicted growth) to a more optimistic one.
“We are prepared for further budget cuts. We do not want to increase taxes or the deficit,” assured the Finance Minister. (mmj/pg)