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The Warsaw Voice » Business » September 30, 2013
Business & Economy
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End of the Crisis?
September 30, 2013   
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While attending an economic conference in the southern resort of Krynica in September, Prime Minister Donald Tusk said Europe is no longer in crisis. This announcement did not apply to Poland, because, according to Tusk, the crisis never reached these shores in the first place—all thanks to the policies of his government. This does not mean, however, that the Polish people can now rest on their laurels, Tusk said. He announced a “new plan for Poland” to help the country weather the post-crisis period and sustain economic growth. To this end, it is necessary to make life easier for companies through moves such as the “construction of a simpler tax system,” Tusk said. He did not specify what this would involve.

Tusk’s optimism is encouraging. But is it fully justified? Just a few days before Tusk’s address in Krynica, the government submitted a 2013 budget revision to the lower house of parliament—precisely because of the crisis. The revision adds about zl.16 billion to this year’s originally planned budget deficit of zl.35.6 billion. The reason for the amendment is lower-than-expected tax revenue in the first half of the year.

The government’s recent proposal for changes to the pension system—designed to improve budget statistics—further contradicts Tusk’s proclamation of the end of the crisis. The government intends to transfer part of the funds amassed by the country’s open pension funds (OFE) to the government-run Social Insurance Institution (ZUS). This move will significantly reduce public debt. In addition, the government says citizens will be able to choose whether they want their pension contributions to go to ZUS or OFEs. After the proposed changes to the pension system, OFEs will no longer be allowed to invest in Treasury bonds or bonds guaranteed by the Treasury.

Not everyone is happy with the government’s plans. Critics say the move is primarily designed to reduce public debt and is completely at odds with the objectives of the 1999 reform of the pension system, which separated the system from the budget in order to safeguard the former from politicians looking for a quick fix to public debt problems.
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