European Commission ‘not concerned’ with Poland’s increased spending on social incentives

The European Commission said that it is not concerned that the recent social incentives proposed by the ruling Law and Justice (PiS) party will pose a risk to the country’s fiscal sustainability.

“In Poland, we see that economic conditions remain favorable. There is robust economic growth. we saw 5.1 percent growth last year, we expect solid growth of 3.5 percent this year,” the EC’s Vice President Valdis Dombrovskis said.

“Public finances are gradually improving, the fiscal deficit is estimated to have narrowed down to 0.9 percent of GDP last year, we also see improvements in tax collection, so in the short term we see no major risks to fiscal sustainability,” he added.

He warned, however, that in the longer term, increased spending on pensions might cause a risk as Warsaw lowered the retirement age.

During its party convention, PiS leader Jarosław Kaczyński promised a new slate of state-funded social incentives that would cost, according to the Ministry of Finance up to PLN 40 billion a year.