Minister Rostowski - photo - PAP“The Polish government’s goal is to swiftly balance public finances and lower the country’s excessive budget deficit to below three percent of GDP in 2012 by curbing expenditure,” Rostowski said at a press conference.
Minister Rostowski said expenditure policy was guided by the so-called “spending rule”, according to which the country’s outlays cannot not grow faster than one percent over the annual inflation rate.
Government spokesman Pawel Gras ensured that Poland is ready to tighten its belt.
“Last year we introduced a series of mechanisms which aim at reducing the budget deficit and prevent the country from running up further debts. These included a so-called “spending rule” and the open pension funds reform. We think that Poland can save money and not necessarily at the poor people’s expense,” said Gras.
The government raised VAT late last year by one percent to 23 percent on many items as part of an austerity drive.
Another measure which the government has come under criticism for is the reform in open pension funds, where contributions devoted to pensions directed to private funds will be sent to the state Social Insurance Company.
Olli Rehn met with Jacek Rostowski and Prime Minister Donald Tusk to discuss Poland’s budget deficit, which was 7.9 percent of GDP in 2010, and to prevent public debt from reaching 55 percent of GDP by the end of the year.
Commissioner Olli Rehn, concerned that Poland’s debt levels would keep the nation outside the Euro Zone if it was not tackled swiftly, deemed the meeting constructive.
“We had very constructive discussions on the ways and means to achieve this objective and the Polish government is providing us with information concerning economic forecasts and calculations to this effect. I expect that we will receive this concrete and detailed information in the coming days, by the end of the week,” he told reporters.
(pg/ab)