Warning on Polish readiness to adopt euro

Poland’s government is not undertaking reforms needed to repair public finances, possibly endangering its efforts to join the euro, according to Stanislaw Gomulka, who resigned this week as deputy minister of finance.

“I felt I could not discharge my duties as someone who was supposed to initiate a programme of significant reforms in public finances,” Mr Gomulka told the FT, adding that he felt he was not getting political backing from Donald Tusk, the prime minister.

The government replied by stressing that Mr Tusk and Jacek Rostowski, the finance minister, were determined to push through reforms.

Mr Gomulka, a former lecturer at the London School of Economics, helped advise Poland during its 1989 leap from socialism to capitalism. He joined the government in January with the brief to reform public finances. He also prepared a convergence programme, setting out the path to adopting the euro.

Slawomir Skrzypek, the central bank governor, on Friday said Mr Gomulka’s departure weakened Mr Rostowski and endangered the convergence programme.

Although Mr Gomulka said he continued to support the Civic Platform party government and believed Mr Tusk was “basically in favour of reforms as far as his gut feelings are concerned”, he said the political constraints faced by the government had made pushing through any reforms very difficult.

The largest obstacle comes in the form of President Lech Kaczynski, who has been unenthusiastic about plans to reform the health service and the pension system. Civic Platform and its coalition allies in the smaller Polish People’s party do not have enough votes in parliament to override a presidential veto.

But, Mr Gomulka said, if the government failed to introduce reforms, specifically those aimed at curbing early retirement and getting a higher proportion of Poles to work, “we may have a problem with the budget for next year”.

He also criticised government plans to privatise state assets, to be announced next week, as “not very ambitious”. He was worried that, faced with opposition from the president, the government had decided that instead of pushing through controversial measures, it would do very little, hoping to win the next parliamentary and presidential elections with a big enough majority to allow it to undertake reforms.

“I cannot be certain which strategy is better,” he said. “In current circumstances, I do not see much scope for significant reforms.”

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