Poland rebuked over budget deficit

The Commission has told Poland to make more effort to lower its budget deficit below 3%. Hungary also has “yet to travel the full length of the road”.

The Commission formally recommended, on 7 February 2007, a reduction to Poland’s budget deficit. Economic and Monetary Affairs Commissioner Joaquín Almunia said: “Thanks to higher-than-expected growth, Poland has a good opportunity to correct its excessive deficit in 2007, provided that an additional effort is made.”

Upon accession, Poland was in excessive-deficit procedure and was given until 2007 to correct its deficit. According to the Polish projections, a deficit of 3.4% is expected for 2007. 

However, the Commission expects the Polish deficit to be higher than this, and therefore recommended a “little extra effort” to correct the deficit, in order to put state finance on a “firmer footing”. 

The Polish government does not agree with the Commission. On 2 February 2007, Finance Minister Zyta Gilowska said that the EU was “painting Polish reality too darkly”, Bloomberg reported.

Hungary was told to rigorously implement the budget for this year, as it is facing large adjustments – the country needs to reduce its deficit by 7.4%, bringing it down from 10% in 2006 to 2.7% of GDP by 2010. The Commission states that in order to achieve this, Hungary must rigorously implement the 2007 budget, curb public expenditure and improve budgetary control.

The EU executive has examined the second group of “stability and convergence programmes” of six countries (including Poland, Malta, Hungary, Finland, Ireland and Luxembourg). The programmes are budgetary projections that member states need to notify to the Commission each year, according to the Stability and Growth Pact.

On 14 February 2007, the last group of stability and convergence programmes will be assessed by the Commission.

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