That’s incorrect. Relative to potential, Poland is underperforming. It’s recovering from a severe slump and has a lot of ground to make up. Wages are one-third of the EU average, and its eastern provinces, plagued with high unemployment, are some of the poorest in the union. To converge with the rest of the union, Poland should be growing faster.
This requires far-reaching structural reform. Too many Poles have short-term work or temporary contracts. Too many jobs are in low-wage, low-skill industries. Public spending should be aiming to modernize the economy and promote long-term growth through greater efficiency in energy, mining and agriculture.
Instead, the government is busy awarding hand-outs, such as a new child benefit, and making expensive promises, including a plan to lower the retirement age. Sales of telecoms licenses and new taxes will help fund the spending this year, but it’s unclear where the money will come from after that, or how the government will meet its 3 percent target for the budget deficit.
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