Polish Budget Does Not Go Far Enough to Tackle Pensions System Problems Say Economists

02 September 2010 (PLANSPONSOREurope.com) The former deputy president of Poland’s central bank has said the budget deficit plan the government is to adopt is superficial and shirks making crucial reforms.

“The governments’ reforms are just a marketing pitch,” Professor Krzysztof Rybiński told the Dziennik Gazeta Prawna.

In order to reduce public debt and make sure it does not exceed 55 percent of GDP – which under the constitution would trigger deep cuts in public spending, with many jobs lost and services cut – the government plans to raise VAT by one percent to 23 percent on most items, enforce a public sector pay freeze and increase the rate of privatization.

But economists such as Rybinski say the debt reduction plan does not go far enough and avoids tackling necessary reforms of the pension system and raising the retirement age. The government, they say, is nervous of making radical reforms ahead of local elections in the autumn and a general election next year.

Katherine Blackler
editors@plansponsoreurope.com