Poland without the excessive deficit procedure – Republic

Source: Bloomberg

Council of the EU took off from the Polish excessive deficit procedure – informs the Ministry of Finance.

According to the recommendation of the European Commission in mid-May, the EU Council decided today to remove the Polish excessive deficit procedure. “Thus, Poland has reduced the excessive deficit a year earlier than was recommended by the Council. This demonstrates the effectiveness of the government’s strategy and of its action, “writes the finance ministry in a statement.

In 2009. Council decided that an excessive deficit in Poland and recommended that this be corrected to below 3 per cent. Of GDP. Today, After six years, whereas the achieved results and forecasts for the future, the Ecofin Council ends applicable to Polish excessive deficit procedure.

“After the procedure, the government will be oriented towards further reduction of public finance imbalances without jeopardizing the medium-term prospects development of the country “- declares resort. And he adds that its completion is also the opportunity to shape fiscal policy in a manner more appropriate to the economic situation, though still within the limits of the national and EU law (in particular stabilizing the expenditure rule and the requirements of the path to MTO). As pointed out by the Minister Mateusz Szczurek: “expenditure policy framework limits the force of that year expenditure rule that says how much the public finance sector may spend in a given year. However, if, when the deficit is below 3 percent. GDP scale cutting decreases, which gives some freedom, but at the same time it is not a change that pozawalałaby on giant public spending. “

The End of the excessive deficit procedure will also entail an increase in credibility Polish. In the future it may result in an increase in the rating of Polish and will help improve the performance of the economy in the medium and long term.

The Communication Ministry of Finance stresses that in 2014. deficit of the general government in Poland was 3.2 percent. GDP and exceeding the reference value of 3 per cent. GDP was due solely incurred in that year cost of implementing systemic pension reform of 1999. (0,4 per cent. of GDP). Government gross debt reached 50.1 percent while. GDP, well below the reference value 60 per cent. of GDP. At the same time the European Commission forecasts indicate ensuring a permanent reduction of the deficit, which in the years 2015-16 will decrease to 2.8 percent respectively. GDP and 2.6 proc.PKB. Sector debt, in turn, remain well below 60 percent. GDP.

According to the European Commission, the aggregate deficit of the European Union countries in 2014. GDP was 2.9 and 2.4 percent of the euro zone. GDP. The deficit in Poland was thus similar to the EU average, and adjusted for the costs of systemic pension reform (ie. Comparable with countries that have not implemented the pension fund capital) he beats her. At the same time, the debt of the sector in 2014. Poland was significantly lower both than the EU average (88.4 per cent. Of GDP) and the euro area average (94.2 per cent. Of GDP).

The excessive the deficit is covered by 10 countries, including 8 EU euro zone countries: Ireland, Portugal, Slovenia (term reductions until 2015.), Spain, Greece, Cyprus (2016.), France (2017.) and Finland ( to which only opened a procedure) and 2 outside the euro area – Croatia (2016.) and the UK (financial year 2016-17).