Various external threats do not translate into higher costs of financing Polish – told PAP Minister Mateusz Szczurek, justifying a possible reduction in the credit line with the IMF. In his view, Poland is becoming quite safe haven to other countries.
The finance minister confirmed that Poland is inclined to submission of an application to the International Monetary Fund (IMF) for a reduction of 25-33 per cent. Flexible Credit Line (FCL), but stressed that no final decision was made yet on this issue.“With the execution of any further threat from the outside you can see that such things as, for example. Limiting the pace of quantitative easing in the United States, the crisis in Ukraine, if a slowdown in the euro zone is not impressed on our cost of funding and do not threaten the stability of funding. Z this perspective, the current scale of the credit begins to seem unnecessary “- told PAP Szczurek on Saturday evening local time in Washington, where he takes part in the autumn session of the IMF and the World Bank.
Szczurek warned that if the situation in the world will change and will “stir the market, which will be translated on the profitability of our bonds, it can imagine no change in the size of the credit line.” “But at the moment our bond market quotations indicate a decreasing risk” – he added.
With regard to the concern expressed by the IMF of a recession in the euro zone, the minister pointed out that the impact of the recession just bond prices is positive, because “the economic downturn causes expectations to keep interest rates at a low level.” “As long as you do not hit it in the stability of the financial system, it contributes to lower financing costs and the ease of obtaining it, than vice versa. And it is in this moment also on the Polish bond market” – he explained.
the IMF on January 18, 2013. Poland has extended access to the FCL for two years in the amount of SDR 22 billion, which is approx. 33.7 billion. Poland does not use funds under maintained since May 2009. Credit line with the IMF and – as highlighted MF – treats it as a precautionary instrument.
Szczurek picked up on Saturday in Washington awarded the “Minister of Finance 2014. From Central and Eastern Europe”, which is awarded every year by the Emerging Markets website. Two years ago, it was the then head of the Ministry of Finance Jacek Rostowski.
Szczurek admitted that perhaps this is the last of this type of award, for “Poland practically married already with a group of emerging countries.” He said that Poland can still be regarded as catching-up economies from the point of view of its economic growth, but when it comes to the financial market and the debt market is “grow up with the term”.
“As long as our presence in emerging markets comes down to industry awards writings, this is not a problem. Much more important is how you react profitability of our bonds in the external environment: do we have to pay expensive financing our debt in the wake of the sell-off in emerging markets, on the contrary, if we are rather safe haven in these circumstances. Increasingly, this is the place “- he believes.
Referring to the main topic of the meeting of the IMF and World Bank, which was a struggle with economic stagnation, Szczurek said that in the minds of European leaders increasingly raises a voice for infrastructure investments. “I am sure that the new European Commission in the coming months or quarters, put into effect, along with the governments of some additional changes that will lead to increased public and private investment. Staying trapped in very low economic growth is not Europe, and destroys the growth potential for years to come “- he said.
He recalled that Poland already seems to 3.7-3.8 percent. GDP of public funds for investment, which is a “high score” compared to the rest of the EU.
At the beginning of the week the IMF for the third time this year lowered the growth forecast for the world – this time to 3.3 percent. The Fund has warned that the prospects are of particular concern for the major eurozone countries, Japan and large emerging economies such as Brazil. According to the head of the IMF, Christine Lagarde, the eurozone could fall into severe recession if governments do not carry out reform and not increase development-oriented investments. The IMF also warned against the serious consequences if geopolitical tensions persist.
From Washington Inga Czerny
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