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Rostowski Has ‘Serious Doubts’ About Polish Debt-Rescue Plan

Polish Finance Minister Jacek Rostowski said he has “serious doubts” about the country’s plan to introduce non-tradable pension bonds and raise employers’ welfare contributions.

The proposal to boost the amount employers give to social-welfare funds would lead to higher unemployment and increase taxes, Rostowski said today in an interview with private Radio RMF.

The comments contradict yesterday’s statement by Prime Minister Donald Tusk that the government is “very close” to a compromise on pension transfers and show a yearlong dispute within the Cabinet on how to keep public debt from exceeding 55 percent of gross domestic product isn’t settled.

Poland is struggling to win European Union approval for excluding pension-overhaul costs from public debt. While the EU last month rejected Poland’s request, shared by eight other members of the bloc, the country is insisting on the redefinition of debt, Tusk said.

Under the Polish constitution, an increase in public debt above 55 percent triggers mandatory spending cuts.

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