Bauc's austerity plan rejected by ministers but supported by NBP governor

Prime Minister Jerzy Buzek has said that next year's central budget deficit cannot exceed zl.40 billion. Speaking in an interview on public television news yesterday, Buzek said, "The situation is difficult. We don't have a crisis, but we are endangered." A zl.40 billion deficit would amount to roughly 5.1% of GDP, significantly higher than this year's target of 3.9%. Earlier in the day, Buzek's government had rejected Finance Minister Jaroslaw Bauc's austerity plan, which set next year's budget deficit at 4.5% of GDP, or zl.35.3 billion. But Bauc's plan received support from the head of the central bank. In a letter to the prime minister obtained by Reuters, governor of the National Bank of Poland (NBP) Leszek Balcerowicz wrote that he did not question the macro-economic assumptions of Bauc's controversial plan, which was crucial to prevent a crisis in public finances. (Reuters)