WARSAW: There is every indication that, with its healthy GDP growth of around 3.5 percent, Poland will continue to rank among the fastest growing economies in Europe this year. And forecasts by international financial institutions suggest that similar economic growth will continue in the next few years despite possible changes in Polish politics.
Bronisław Komorowski’s defeat in the presidential elections by challenger Andrzej Duda—a contender fielded by the conservative opposition Law and Justice (PiS) party who was largely unknown to the general public just six months earlier—came as a big surprise even for seasoned observers of Polish politics. Komorowski was a shoo-in for re-election, but his defeat cannot be attributed exclusively to a botched election campaign. Other, more important, factors included the public’s poor opinion of Komorowski’s track record and dwindling support for the governing Civic Platform (PO) party, from which Komorowski hails. On the other hand, Duda was able to draw voters to his side during the campaign, using attractive slogans and handing out election promises.
Even though many of the election promises made by both Komorowski and Duda concerned the economy, this is a sphere that is beyond the Polish president’s control. In the Polish political system, real power belongs to the prime minister and the government. Meanwhile, both contenders came up with generous spending proposals which, if ever implemented, would pose a significant burden on public finances. One of Duda’s main proposals was to lower the retirement age to its pre-reform level of 60 years for women and 65 years for men. Duda also promised to increase the non-taxable income threshold for taxpayers and increase child benefits. According to experts from the Employers of Poland organization, if carried out, Duda’s proposals would cost nearly zl.300 billion in total, more than the total government revenue target this year.
Although Duda avoided identifying specific sources of funding for his promises, PiS politicians argue there is money in the Polish financial system to fulfill all these promises without raising taxes or social security contributions. It’s enough to effectively collect taxes under regulations already in force and prevent untaxed profits from being transferred abroad, they say.
