Analysts says coalition may not find will for strong ERM-2 financial reform

"A coalition of Civic Platform (PO) and Law and Justice (PiS) will not take responsibility for carrying out the requirements of ERM-2 in the short-run," said Tomasz Zdyb, an analyst with Pekao. In order to enter the ERM-2 mechanism the country would have to meet the criteria of convergence, which in Poland's case would require strict discipline in terms of public finances. The criteria include maintaining the budget deficit at 3% and public debt at the level of below 60% of the GDP, which would result in limiting social contributions. If the decision about entering the ERM-2 is not made within two years, than the whole process is likely to be shifted until after the following parliamentary elections. "No coalition will limit expenditures before the elections," said Piotr Kuczyński, an analyst with DM WGI. (Parkiet, p. 6) M.M.