Analysts anxious minority government will open its coffers to curry favor

The incumbent Solidarity Election Action (AWS) minority government will be too weak to maintain the current pace of reforms and may even increase public spending to attract the disillusioned electorate ahead of the Presidential and parliamentary elections, concluded the American Chamber of Commerce in Poland (ACC). Krzysztof Rybinski from ING Barings said, "AWS recently proposed to reduce next year's budget deficit to 2.2 % of GDP, although Leszek Balcerowicz predicted it would not exceed 1.5% of GDP, and more spending will cause a financial crisis." ACC is equally apprehensive about the prospect of early elections and the handover of power to post-communist social-democrats from Democratic Left Alliance (SLD). "SLD's support for Poland's integration with the European Union (EU) is empty rhetoric," says Marek Matraszek from CEC Government Relations. The future government is not expected to curb public spending, which according to most economists is the only way to reduce the current account deficit and avert a financial crisis. Analysts from the New York-based MSI Global voice the same fears in a recent report and urge Poland to limit domestic demand or the correction would come in the form of a balance of payment crisis. (Prawo i Gospodarka, page 3) P.S.