Central European Business Review 2013, 2(2):51-60 | DOI: 10.18267/j.cebr.46

Poland's Public Finance Convergence with the Euro Area

El¿bieta Kawecka-Wyrzykowska
El¿bieta Kawecka-Wyrzykowska, Warsaw School of Economics, Jean Monnet Chair of European Integration, ekawec@sgh.waw.pl

The situation of Poland's public finances has been improving. Helped by solid economic growth in 2011, Poland has reduced its budget deficit in line with the Commission's recommendations. However, contrary to earlier forecasts, in 2012 it was still well above the ceiling of 3% of GDP. As a result, the excessive deficit procedure was extended by two years, by 2014. The deficit should be further reduced to reach, in 2015, the level of 1% of GDP in terms of structural deficit. The slowdown of the economy in 2012 and probably in 2013 will not make this task easy. Public debt has risen steadily over the past few years but in recent times, the level has still been well below the 60% of GDP ceiling. The national reform program and the convergence program were adopted by Poland's Council of Ministers on 25 April 2012. The convergence program outlined in an integrated manner the fiscal consolidation efforts, the key structural reforms and the reforms that underpin macroeconomic stabilization. In the medium- to long-term, Poland is faced with a number of challenges. A very low labor force participation rate, in particular of women, and the poor quality of vocational training and education are major concerns given an ageing population. The low level of public and private R&D spending, weak links between science and industry and poor innovation performance call for improvements. Apart from the program of national reforms, crucial for future sustained economic growth and good performance of public finances, an additional factor stimulating activities towards fiscal improvement should be Poland's participation in strengthened economic governance architecture recently introduced in the EU. Euro adoption remains an important goal of the Polish government. The uncertain situation in the euro zone has, however, postponed adoption of a clear timetable of joining the euro zone. The government decided that an additional condition to join the euro zone, apart from meeting the nominal convergence criteria (and legal conditions not discussed here), is stabilization of the euro area situation.

Keywords: convergence fiscal criteria; public finances stabilization; Poland's budgetary situation; EU economic governance; Economic and Monetary Union (EMU)
JEL classification: E61, F32, F33

Received: January 30, 2013; Revised: May 25, 2013; Published: June 30, 2013  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Kawecka-Wyrzykowska, E. (2013). Poland's Public Finance Convergence with the Euro Area. Central European Business Review, 2(2), 51-60. doi: 10.18267/j.cebr.46
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. European Commission (2012). Six-pack? Two-pack? Fiscal compact? A short guide to the new EU fiscal governance, (accessed May 24, 2013), [available at: http://ec.europa.eu/economy_finance/articles/governance/2012-03-14_six_pack_en.htm].
    2. European Commission (2012a). Commission Staff Working Document. Assessment of the 2012 national reform program and convergence program for Poland. Accompanying the document. Recommendation for a Council Recommendation on Poland's 2012 national reform program and delivering a Council Opinion on Poland's updated convergence program for 2012-2015, COM(2012) 323 final. May 30, 2012.
    3. European Commission (2012b). Council Decision (104§12) abrogating the Decision on the existence of an excessive deficit, (accessed June 1, 2013), [available at: http://ec.europa.eu/economy_finance/sg_pact_fiscal_policy/excessive_deficit9109_en.htm].
    4. European Commission (2013). Recommendation for a Council Decision abrogating Decision 2005/183/EC on the existence of an excessive deficit in Poland (presented by the Commission), Commission,, SEC(2008) 2011 final, Brussels, June 11, 2008.
    5. European Commission (2013a). Recommendation for a Council Recommendation with a view to bringing an end to the situation of an excessive government deficit in Poland, COM (2013) 393 final., Brussels, May 29, 2013.
    6. Eurostat (2013). Tables, Graphs, and Maps Interface (accessed June 6, 2013), [available at: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1〈uage=en&pcode=tec00115].
    7. Index Mundi (2011). Poland - Labor participation rate, (accessed June 1, 2013), [available at: http://www.indexmundi. com/facts/ poland/labor-participation-rate].
    8. Kawecka-Wyrzykowska, E. (2009). New Member States of the Euro Zone. First experiences and lessons for Poland. Working Papers No. 300, Warsaw School of Economics.
    9. Kawecka-Wyrzykowska, E. (2013). Enhanced Economic Governance In the EU: Alternative To a Political Union?, International Journal of Management and Economics, 37. Go to original source...
    10. Ministry of Economy, Poland (2009). Analiza sytuacji gospodarczej Polski w I po³owie 2009, (accessed May 24, 2013), [http://www.mg.gov.pl/NR/rdonlyres/C14A5DE8-7236-4770-A72D-44D7 A0454F93/ 56245/2q2009_pl.pdf].
    11. Ministry of Finance, Poland (2012). Finanse publiczne w Polsce w okresie kryzysu, (accessed May 24, 2013), [available at: http://redir.atmcdn.pl/http://o2/tvn/web-content/m/p1/f/R/a/Raport_do_druku.pdf].
    12. Ministry of Finance, Poland (2012a). Program konwergencji. Aktualizacja 2012, (accessed May 24, 2013), [available at: http://www.mf.gov.pl/ministerstwo-finansow/dzialalnosc/finanse-publiczne/sytuacja-makroekonomiczna-i-finanse-publiczne/program-konwergencji;jsessionid=1CD81995A2F2AAB6259AC2532986EB7D].
    13. Ministry of Finance, Poland (2012c). Conference on Economic Governance in the EU/ euro area: What lessons for Poland? July 16, 2012, (accessed May 24, 2013), [available at: http://www.mf.gov.pl/dokument.php?const=1&dzial=4844&id=305520〈=en].
    14. PMR (2011). Tusk announces major reform agenda for new government, (accessed May 24, (accessed June 1, 2013), [available at: http://www.polishmarket.com/113484/Tusk-announces-major-reform-agenda-for-new-government.shtml].
    15. Rae, G. (2012). Austerity Policies in Europe. The Case of Poland, Friedrich Ebert Stiftung, Economic Policy Analysis, August.
    16. Trading Economics (2013). Labor participation rate; male (of male population ages 15+) in Poland, (accessed June 1, 2013), [available at: http://www.tradingeconomics.com/poland/labor-participationratemale-percent-of-male-population -ages- 15-plus-wb-data.html].

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content