8th March 2004
Friday, December 18th, 2009
The week's events covered in Poland AM
Analysts from the Center for Social and Economic Research (CASE) believe that the government's prognosis of five percent growth in coming years is far too optimistic.
ECONOMICS
Analysts from the Center for Social and Economic Research (CASE) believe that the government's prognosis of five percent growth in coming years is far too optimistic. CASE argues that a rate closer to four percent is more realistic due to a low level of general investment and rising imports coupled with falling exports.
Increases in VAT rates on construction materials, which come into effect on May 1, are expected to result in greater sourcing from abroad. It is expected that there will be a huge increase in gray imports from the Czech Republic where VAT on building materials will remain at five percent until the end of 2007, compared with Poland's 22 percent.
The Minister for Scientific Research and Information Technology, Michał Kleiber, is to present amendments to the existing law on offset contracts within the next few weeks. The changes will allow more time to negotiate contract details, as well as give the government the chance to allocate money to sectors other than defense, as well as to discuss changing fiscal regulations.
Senators from both the coalition and the opposition have proposed almost 200 further amendments to the VAT bill in addition to the Sejm's 320. The newly proposed changes include reducing VAT from 22 percent to seven percent on food products, which would cost the budget over zł.4 billion. The final vote on the bill will take place on Thursday.
Eurostat, the European Statistics Office, has changed regulations governing transfers to Open Pension Funds (OFEs), excluding them from the public sector finances register. This means the state's indebtedness to OFEs will now have to be counted as part of the public debt, causing the public sector deficit to rise to 7.2 percent of GDP. As the government won't be able to reduce the debt artificially by changing various definitions, it is likely that public debt will exceed the constitutionally critical level of 60 percent.
POLITICS
Draft proposals for the restructuring of state hospitals have come in for criticism from the ruling Democratic Left Alliance's (SLD) own deputies. According to the proposals, public hospitals would have to become public utility companies by January 1, 2006, although this deadline is now likely to be pushed back or scrapped altogether.
Civic Platform (PO) leader Donald Tusk has rejected the Hausner plan, but announced that his party will vote in favor of three draft bills concerning pre-pension benefits, the reorganization of the farmers' social security system (KRUS) and the valorization of pensions. Tusk believes that the scheme will result in social expenditure cuts amounting to zł.30 billion as opposed to the proposed zł.50 billion cuts, while the reduction in administrative costs would only further increase the tax burden.
SLD and the Federation Parliamentary Club (FKP) led by Roman Jagieliński, signed a coalition agreement which appears to have saved the Hausner plan. Although the SLD and FKP played down talk of horse trading during the negotiations, well placed sources say that the FKP will be able to appoint deputy ministers of agriculture, treasury and the economy.
Data has been recovered from Aleksandra Jakubowska's computer hard disk from when she was Deputy Culture Minister. It clearly showed that Lech Nikolski, then head of the Prime Minister's Political Office, and Włodzimierz Czarzasty, National Radio and Television Council (KRRiTV) Secretary, were actively involved in the process of forming the media bill, a fact that all three had denied.
In an as yet unpublished report on the Rywin affair, Jan Rokita of PO accuses former TVP President Robert Kwiatkowski, KRRiTV Secretary Włodzimierz Czarzasty, and then Deputy Culture Minister Aleksandra Jakubowska, of cooperating with Lew Rywin in his corruption proposal aimed at Agora. Rokita also suggests that Prime Minister Miller supported the actions undertaken by Jakubowska.
INTERNATIONAL NEWS
Hungary has proposed to Kiev that it replace Poland as a representative of Ukrainian interests in the EU following the failure of the Donbas Industrial Association (DIA)'s tender for the privatization of the Częstochowa Steel Mill. According to DIA, Poland broke tender procedures and has led to high level claims of discrimination against Ukrainian companies.
Deputy Foreign Affairs Minister Jan Truszczyński declared during a meeting of the Green Faction of the European Parliament that Poland was ready to discuss changes to the Nice Treaty. He also revealed a compromise concerning vote allocations within the European Council, based on dividing the square root of a country's population by a given factor.
President Aleksander Kwaśniewski last week met with Prime Minister Ariel Sharon during a two day visit to Israel. He also signed a contract worth zł.2.4 billion (E500 million) with Israel's Rafael which will supply Poland Spike missiles and favorable offset contracts.
DOMESTIC NEWS
Four general directors of public television (TVP) have been dismissed in the first wave of changes introduced by the newly appointed company president. TVP's three channels will now each be responsible for their own news services following the break-up of the company's Television Information Agency (TAI).
The Finance Ministry has decided that every person filling out a Personal Income Tax form for 2003 can now transfer one percent of the value of the payable tax to a selected organization deemed as working for the public benefit. Around 20 organizations have so far received this status while several hundred others are currently awaiting approval.
From Warsaw Business Journal
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