RCSS' final warning that public finances are on the verge of collapse

The Government Center for Strategic Studies (RCSS) warn that the public debt will exceed the level of 55% of GDP in 2004, and if there is no significant cut in state spending, this figure is likely to grow to as much as 60%. According to RCSS, the first warning threshold was already surpassed with a current public debt of 51% of GDP. This means that in 2005, the ratio of budget deficit to revenues cannot exceed the level of that in 2004. However, if the public debt exceeds 55% of GDP next year, then the 2006 budget would have to be very tight. "This would be a dramatic step for the economy, as expenditure cuts would have to be made everywhere including development," said Tadeusz Chrościcki from the RCSS. "Public finances are about to collapse. This has to be stated clearly. We need social support to drastically cut expenditures. This cannot be delayed. The decisions have to be immediate and must relate to 2004," Chrościcki argued. (Parkiet, p. 1; Puls Biznesu, p. 8) A.K.