EU urges Poland to cut deficit

he European Union financial ministers on Tuesday renewed the call for Poland to bring down its budget deficit under the EU requirement.

"Poland should put an end to its excessive deficit situation," the financial ministers said in a recommendation, which sets the target for Poland to cut the deficit by at least 0.5 percent of gross domestic product (GDP) between 2006 and 2007.

The new recommendation also gave Poland six months to take effective action.

In its previous recommendation adopted in July 2004, the financial ministers urged Poland to bring down its deficit to 3.3 percent in 2006 and 1.5 percent in 2007 with spending on pension reform exempt from calculation.

Despite an improvement in Poland's fiscal position, the financial ministers' meeting last November found that action taken was proving to be inadequate.

According to their estimate then, the Poland's deficit for 2007 is expected to again exceed the maximum threshold of three percent of GDP once the budgetary costs of pension reform is taken into account.

The European Commission had warned the Polish deficit could hit 4.1 percent of GDP this year and 4.6 percent in 2006.

Poland has set the target for itself to lower the deficit to 3. 4 percent of GDP this year, bringing it down to 3.1 percent in 2008 and 2.9 percent in 2009.

Source:english.people.com.cn