Aleksander Rutkowski (Directorate-General for Economic and Financial Affairs)
(Country Focus. 04. March 2007.
Brussels. 6pp. Tab. Free.)
National fiscal frameworks can complement the EU budgetary surveillance procedure. Poland has traditionally had a debt rule, but it did not discourage governments from running high deficits. High expenditure (mainly on social benefits) has been identified as one of the main sources of large deficits. Hence, the introduction of an expenditure rule may be beneficial for Poland. Such a rule was proposed in recent years in Poland but not adopted: the so called “Belka rule” set a ceiling of 1% on real expenditure growth. It has, however, not been implemented, but recently a nominal ceiling (“anchor”) has been introduced on the deficit of the central government. This Country Focus argues that the implementation of an expenditure rule is a complementary safeguard and does not entail abandoning the existing control mechanisms or giving up ongoing expenditure reforms. The effectiveness of the expenditure rule depends on the degree of enforceability and comprehensiveness.
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