EC moves closer to opening excessive deficit procedure against Poland

2009-05-14

The European Commission (EC) on 13 May presented report which assesses recent and current budgetary developments in Poland and reviews the short- and medium-term prospects in the light of overall economic conditions and policy action taken by the government. This report is the first step towards initiating the excessive deficit procedure against Poland (and three other new member states).
The move followed the publication of official statistics last month that showed that the country’s general government deficit amounted to 3.9% of GDP in 2008, well in breach of the 3% ceiling requirement enshrined in the Maastricht Treaty and twice the level in 2007. The procedure will probably be formally opened next month.
Joaquin Almunia, the EU commissioner for economic and monetary affairs, stressed that the rise in the deficit could not be attributed to the economic downturn and reflected poor economic management by the Polish government, notably its failure to consolidate the public finances and rein in social spending during the boom times.
In a report released earlier this month, the Commission predicted that Poland’s general government deficit would reach 6.6% in 2009 and 7.3% in 2010.