Brussels, 14/11/2006 (Agence Europe) - On Tuesday, the European Commission pointed the finger at Poland, which has not taken the necessary measures to correct its budgetary deficit in 2007, as it has been recommended to do by the Council in July 2004 (EUROPE 8741). It therefore proposes that the Council take immediate note (on the basis of article 104§8 of the Treaty) of the absence of effective measures. Once the Finance Ministers have taken position, at the Ecofin Council of 28 November, the Commission will soon issue new adjustment recommendations (under article 104§7), but will not set a new deadline. "Poland should make more ambitious efforts to consolidate its public finances given the strong economic growth that it is enjoying at the moment (...), irrespective of the target date that is set for the adoption of the euro", said Joaquín Almunia in a press release.
If, taking account of the costs of pensions reform, Warsaw's 2007 budget is looking at 3.7% of GNI (4.1% this year), the autumn forecasts of the Commission are a little more critical, putting the shortfall at 4% of GNI (EUROPE 9300). Poland, which notified a deficit of 2.5% in 2005 and should reach 2.2% in 2006, has failed to anticipate the application of the statistical rules, which no longer allow second-pillar funded pension regime contributions with the constitution of reserves to be treated as government revenue for accounting purposes. As of April 2007, the deficit figures will thus increase by two percentage points, the Commission points out. Under the rules of the revised Stability and Growth Pact (SGP), a proportion of the costs of pension reform cannot be deducted unless the deficit is close to the reference value of 3% of GNI. As the recommendations of the Council call on Warsaw to put an end to its excessive deficit in 2007 at the latest, they are unlikely to be put into practice, according to the Commission, which had already come to this conclusion in March when it examined the Polish convergence programme (EUROPE 9142). With growth at levels in excess of 5% of GNI in 2006, and two points above Community average in the next two years, Poland should take advantage of this to cleanse its public finances, the Commission adds, noting that with better than anticipated budgetary results for 2004-2006, the scope of the adjustment to be implemented was less than initially forecast. (ab)