Euro adoption pushed back as EC launches excessive deficit procedure against Poland

2009-06-26



The European Commission (EC) on 24 June opened the excessive deficit procedure against Poland. The move was prompted by the publication of official statistics showing 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.
Joaquin Almunia, the EU commissioner for economic and monetary affairs, stressed that unless corrective measures were undertaken, the country’s fiscal situation could deteriorate further, also given the sharp downward revision of the government’s forecast for 2009 growth, to just over zero. He revealed that the Polish government now expected the 2009 general government deficit to be close to the Commission’s projection of 6.6% of GDP, rather than to its own forecast of 4.6% (according to the EC’s forecasts published in May, in 2010 the deficit will widen further, topping 7% of GDP).
In view of these bleaker prospects for the country’s public finances, the Commission advised EU finance ministers to give Poland until 2012 to bring its deficit down below the 3% ceiling.
The EC's decision marks a setback for the government’s plan to push for an early adoption of the euro in 2012-2013. According to Almunia, the earliest realistic date is now 2014.