The global economic crisis is finally catching up with Poland, and as the government attempts to spend its way out, it is racking up some hefty bills.
Already, Poland is on course to see its budget gap to surpass its target by half this year, according to a Bloomberg report. In late June, the Organization for Economic Cooperation and Development (OECD) predicated a 6.2 percent budget deficit for Poland for 2009. The Finance Ministry’s most recent forecast puts the deficit at 27 billion złoty. A revised plan is expected in August.
Poland has until 2012 to get their deficit in line with EU standards – which means below three percent of its gross domestic product (GDP). If Poland wants to enter the euro zone that year, as the current government has planned, that is one of the prerequisites.
Poland is not the only EU country in trouble. EU finance ministers also gave Romania, Hungary, and Lithuania until 2011 and Latvia until 2012 to cut their deficits to below the three percent mark. In fact, 21 out of the 27 countries in the Union are predicted to have budget deficits over three percent due to the financial crisis.