Polish parliament passes PiS' flagship spending programme

By bne IntelliNews February 11, 2016

Dominated by the ruling Law and Justice (PiS) party, the lower house of the Polish parliament passed the child benefit programme on February 11. The benefit was one of PiS’ flagship policy pledges in its successful campaign for the October elections, but worries many analysts over its likely impact on fiscal discipline.

The programme grants monthly benefit of PLN500 (€112) for every second and subsequent child in Polish households, or every child in poorer families. The cost of the programme, which is due to start in April, is estimated at PLN17bn in 2016, increasing to PLN20bn in its first full year.

The scheme is the chief reason for worries over the short-term condition of the Polish budget; a plan to lower the retirement age is a concern in the short to medium term. PiS has introduced a bank tax and plans a tax on retailers in a bid to fund its spending.

Both levvies have been heavily criticised for their potential to hamper economic growth. With the deficit set to push higher, and even break the EU's 3% of GDP threshold according to some estimates, the whole package is straining the credibility of Poland’s fiscal and economic policy.

The first fallout from that was felt already, when Standard and Poor’s downgraded the country’s debt rating on January 15, weakening the zloty and hiking bond yields. Moody's and Fitch have warned they could follow suit. The difficulties have raised speculation that Finance Minister Pawel Szalamacha could be forced out just three months into his job.

Related Articles

Poland increases stake in state-controlled PKN Orlen

PERN, the Polish state-owned company managing the country’s network of crude oil pipelines, has bought a 4.9% stake in state-controlled oil and gas group PKN Orlen, the ministry of energy announced ... more

Czech CPI buys huge Central European retail portfolio

Czech real estate investor CPI Group has bought a large portfolio of Central European retail assets, local media reported on January 17. The investor, which has grown its holdings rapidly since ... more

Speculation over a second downgrade grows as S&P drops outlook on Polish economy

Speculation that Poland could suffer a second downgrade of its sovereign rating at the end of the week intensified on January 10, as Standard & Poor’s lowered its estimates on economic growth. ... ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss