Da Vinci Masterpiece and Coal: Poland’s Budget Cushion Plan

  • Government seeks to spend more as budget gap seen below plan
  • Da Vinci masterpiece seen worth $240 million, Dziennik says

Leonardo da Vinci’s Lady with an Ermine.

Photographer: Carl Court/AFP via Getty Images

Poland’s one-year-old government is changing rules to allow it to spend budget reserves after better-than-expected tax collection gave it more fiscal breathing room.

On the wish list is the country’s most valuable painting, the 1490 “Lady with an Ermine” by Leonardo da Vinci, which is already on public display at the state-held Wawel castle in Krakow and owned by the aristocratic Czartoryski Foundation, as well as funds to beef up the Agency for Material Reserves, a body that has bought coal from the ailing mining industry.

Dziennik Polski newspaper reported last week the government may spend up to 1 billion zloty ($240 million) to purchase the da Vinci work along with other art owned by the foundation. The painting itself is insured for 300 million euros ($318 million) when it travels, while the entire collection was once priced at about 4.5 billion zloty, foundation Deputy Chief Executive Officer Rafal Slaski said by phone. The most expensive da Vinci painting to date is “Salvator Mundi” sold for $127.5 million in 2013.

“The Czartoryski collection has been built up for more than 200 years and is one of the most valuable in the world,” Deputy Culture Minister Jaroslaw Sellin told public radio this week. “It would be good if it was owned by the nation.”

Budget Shortfall

Poland’s budget shortfall will amount to about 40 billion zloty, below the planned 54.7 billion-zloty gap, after the government raised taxes on lenders and improved tax collection, Deputy Prime Minister Mateusz Morawiecki said last month.

In an e-mail reply to questions from Bloomberg, the Finance Ministry didn’t specify how much money could be re-routed by the new legislation. Bank Millennium SA economist Grzegorz Maliszewski said the decision is more in the realm of politics and ideology than economics, and it most probably won’t “destabilize” public finances.

Poland, which relies on coal for about 90 percent of its electricity, last year bought the dirty fossil fuel from state-owned mines to boost its strategic reserves. Last month, the government gained European Union approval for its $1.9 billion bailout of the industry.

The price of a ticket to see Lady With an Ermine is 10 zloty, according to its website.

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