Polish Budget at Risk as Ruling Party Bids Up Campaign Promises

Finance Minister Mateusz Szczurek will reduce the nation‘s budget deficit to below 3 percent of economic output this year from a peak of 7.8 percent in 2010, removing Poland from the European Union‘s list of fiscal policy offenders. Spending and tax-cut promises offered by the Civic Platform and Law & Justice, its main rival, risk swelling the budget and inflating Poles‘ appetites for social outlays regardless of who wins the election, according to Citigroup Inc.‘s Polish unit.

While Law & Justice seeks to attract voters by promising as much as 21 billion zloty ($5.7 billion) in family subsidies, the ruling Civic Platform offered on Sept. 12 to curb payroll and value-added taxes, which will jointly cost the budget 16.7 billion zloty per year. Compared with Poland‘s budget deficit plan of 46.2 billion zloty this year, such election pledges could force the next government to loosen fiscal rules which force spending curbs if public debt tops safety thresholds.