23 January 2003

In January, the Polish government approved the final version of the National Development Plan for 2004-06. The document presents ways of using funds that Poland will receive from the European Union. On this basis, Poland will apply for concrete assistance set aside for it in the EU budget.

The government approved the total amount of public funds that will be earmarked for the implementation of the plan. They will total 14.8 billion euros, including 11.4 billion euros (77 percent) from EU coffers, such as structural instruments and the cohesion fund.
Poland will receive more than 7 billion euros from structural instruments. As the EU follows a rule whereby financial assistance from Brussels is accompanied by the beneficiary countries' own contributions, the rest of the money-3.4 billion euros-must be provided by Poland in 2004-06. Some of the missing amount, 2.7 billion euros, is to come from the national budget in 2004-06; private funds will account for the remainder.

Ewa Freyberg, deputy minister of the economy, labor and social policy, said Poland would have to find an extra 900 million euros, or almost zl.4 billion, in its own budget, to wholly use funds provided by the EU. This is a major burden for the Polish budget as it continually struggles with the deficit. Government spending in 2003 is expected to total zl.193.5 billion, and receipts are set at zl.154.8 billion.

The adoption of the plan requires intensive work from the Ministry of Finance. Freyberg said a part of Poland's own contribution would be money from the budget spent on the construction of roads and the fight against unemployment; yet in order to find the entire missing amount in the budget, Poland would have to change the structure of its budget and plan expenditure on these purposes in the next three years. The Ministry of Finance is expected to present the expenditure plan by the end of February.

In a statement released after the meeting, the government said that "the strategic goal of the National Development Plan is to develop a competitive economy based on knowledge and enterprise, capable of long-term and harmonious growth." Implementing this plan is expected to guarantee sustainable economic growth, increased employment and the inclusion of Poland into the European transport infrastructure system, in addition to the development of regions.

The most funds will go towards developing infrastructure (5.5 billion euros) and upgrading the competitiveness of the Polish economy (4.8 billion euros). More than 4.6 billion euros will be spent on supporting regional development.

If Poland manages to take advantage of all the money promised by the EU, its gross domestic product may grow 3.5 percent in 2006, according to calculations offered by experts from the Ministry of the Economy.

Meanwhile, Poland's National Development Plan has been submitted to the European Commission, and by mid-February officials in Brussels will also receive detailed plans for using EU assistance in individual sectors of the Polish economy.

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