Gone but not forgotten
The Hausner Plan, a package of tough fiscal reforms designed to put Poland's finances on track to enter the ERM-2 exchange rate system by 2007, which is the final step before adopting the euro, has been stifled at every turn. Political wrangling over the series of reductions meant that of the zł.20.5 billion originally planned in administrative cuts and zł.34 billion in social savings, the government has only secured zł.9 and zł.14 billion respectively.
Now, due to growing frustration with his own party's unwillingness to bite the bullet and introduce the required cuts, Deputy Prime Minister and Minster of Economy and Labor Jerzy Hausner has resigned from his party, SLD, eliminating whatever political support the plan once had. The government will discontinue attempts to implement the reforms by the end of March, meaning that for all intents and purposes, the Hausner Plan is dead.
Though the package delivered little in terms of real reforms, Mateusz Szczurek, chief economist at ING Bank lšski, argues that the plan has not died in vain. "The most important accomplishment of the plan is that it created the politically accepted view that reforms must be made."
That means that whoever comes to power after the general election will be under pressure to rein in the country's hefty deficit, especially ballooning pension outlays-a prime target of the Hausner Plan.
"They will come to the same conclusions," says Michał Dybuła, chief economist with BNP Paribas. He believes that the next government will have to institute changes very similar to Hausner's. "Any reforms that the next party makes will have to be complimentary to those already introduced."
If the political climate remains as it now stands, the party taking office in the fall will be Citizen's Platform (PO), which so far has been hostile to the plan, opposing many of its key points.
Szczurek expects PO will take a year to formulate its own plan, "and then it will have to start implementing things that it's been voting against."
Key Points of the Hausner Plan
Social reforms:
Disability pension verification
Retirement age of 65 for women
Pension increases in line with inflation of five percent
Minimum pension eligibility raised from 20 to 25 years of work
Reform of the Farmers' Social Insurance Fund (KRUS)
Administrative reforms:
Reduction of defense spending
Restructuring of the rail system
Restructuring of the state mines
Reduction in the number of government offices and employees
Limiting use of private cars and cell phones by government employees
Now, due to growing frustration with his own party's unwillingness to bite the bullet and introduce the required cuts, Deputy Prime Minister and Minster of Economy and Labor Jerzy Hausner has resigned from his party, SLD, eliminating whatever political support the plan once had. The government will discontinue attempts to implement the reforms by the end of March, meaning that for all intents and purposes, the Hausner Plan is dead.
Though the package delivered little in terms of real reforms, Mateusz Szczurek, chief economist at ING Bank lšski, argues that the plan has not died in vain. "The most important accomplishment of the plan is that it created the politically accepted view that reforms must be made."
That means that whoever comes to power after the general election will be under pressure to rein in the country's hefty deficit, especially ballooning pension outlays-a prime target of the Hausner Plan.
"They will come to the same conclusions," says Michał Dybuła, chief economist with BNP Paribas. He believes that the next government will have to institute changes very similar to Hausner's. "Any reforms that the next party makes will have to be complimentary to those already introduced."
If the political climate remains as it now stands, the party taking office in the fall will be Citizen's Platform (PO), which so far has been hostile to the plan, opposing many of its key points.
Szczurek expects PO will take a year to formulate its own plan, "and then it will have to start implementing things that it's been voting against."
Key Points of the Hausner Plan
Social reforms:
Disability pension verification
Retirement age of 65 for women
Pension increases in line with inflation of five percent
Minimum pension eligibility raised from 20 to 25 years of work
Reform of the Farmers' Social Insurance Fund (KRUS)
Administrative reforms:
Reduction of defense spending
Restructuring of the rail system
Restructuring of the state mines
Reduction in the number of government offices and employees
Limiting use of private cars and cell phones by government employees
