Fiscal Reform in Poland
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Fiscal Reform in Poland had been adopted to build an efficient market economy. In the first half of 1999 the public finances were getting low for which, Poland’s economic growth lost speed. The main cause of the fiscal problem was the increasing social expenditure of the Polish government.
Moreover, several earlier fiscal reform plans failed as well. So in early 2000, the Polish government started a new plan for fiscal reform.
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Different Attempts to Reform:
The Balcerowicz Plan: According to the renowned Polish economist Balcerowicz, the government started a reform strategy based on the earlier reform plans. The government’s goal was to retain the budget deficit and public debt by 2003 under !% and 30% of the Gross Domestic Product respectively. Government’s expenditure had been reduced. But the growth lost its pace in the middle of 2000 and the political support for reform was also not there.
Bauc Period: Due to the dominance of the election politics in 2001, the reform was stopped. The budget deficit of the Polish government also increased.
Belka Period: After that bad experience in 2001, Belka, the honorable finance minister of Poland, implemented a new plan of fiscal reform. A fiscal rule was introduced to abstain the government’s social expenditure and to keep the inflation rate low. This plan had been supported by the other people in the governance as well.
Kolodko’s Package: In 2003, according to Professor Kolodko’s reform package the Polish government introduced a consolidation plan to reduce the increasing expenditure. The government was able to pass that plan in the parliament.
Hausner’s Fiscal reform Plan: The former deputy Prime Minister of Poland Hausner proposed another plan of fiscal reform in 2003. This plan aimed to restructure the nonprofitable public companies by reducing the social expenditure. This plan was well accompanied with some good reform proposals and the then Deputy Prime Minister Belka also endorsed it.
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Fiscal Reform Packages in 2004:
The Polish government introduced some packages of fiscal reform in 2004. These were:
(1)Making way for the country’s EMU entry in 2008 – 09.
(2)Ensuring sustainable medium term economic growth.
