Poland Cuts To The Chase On Euro
The Polish authorities have proposed drastic savings to get Poland's economy in shape to join the euro.
The goal is to save 31 billion zloty (about €6.5 billion) over 4 years, according to French paper
Le Figaro. The aim of the plan is to reduce Poland's swelling budget deficit, which stands at nearly 6 percent of its gross domestic product. Poland will not be entitled to apply to join the euro until this deficit is halved. The measures proposed include scrapping disability pensions and raising the pension age for women to 62 from the current 60. Jobs will be cut in the public sector to save more money and political parties will have their state funding reduced. However, the moves still have to be cleared by the Polish parliament where the government does not have a majority. This is a risky strategy on the part of the Polish authorities. Although growth has been recovering in the Polish economy (reaching 4 percent last year), unemployment remains stubbornly high - at nearly 20 percent. These measures are likely to dampen growth and increase unemployment, which may not be easy for the currently unpopular government to explain.