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Thursday, February 29, 2024

The government conducts two budget settlements. For national and EU needs. The difference is colossal

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The Law and Justice government keeps two different statistics on state debt. One for national needs and the other for EU needs. According to “Rzeczpospolita”, the difference between them already reaches PLN 322 billion. – This is double bookkeeping – Professor Jerzy Hausner, former deputy prime minister for economy, comments for the newspaper.

The Law and Justice government calculates Poland’s debt in two ways. According to the national methodology and according to the EU methodology, for the purposes of reporting to EU authorities. According to “Rzeczpospolita”, the difference between these two types of statistics amounted to about PLN 322 billion at the end of March.

According to Polish state methodology the public debt amounts to PLN 1,209.9 billion. It includes liabilities incurred by individual units of the sector on the financial market. Meanwhile, the debt of the EDP (excessive deficit procedure), which is the basis for calculating the EU debt criterion and takes into account the central and local government sector, amounts to PLN 1,531.8 billion.

Importantly, the debt calculated according to the EU methodology also includes funds that are formally not included in the budget and are beyond the control of the parliament. These funds are solely controlled by the government.

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READ ALSO: What you need to know about Polish debt – check Konkret24>>>

Funds multiply and debt increases

As “Rzeczpospolita” notes, the most important source of this debt, which is not visible in Polish statistics, is debt from extra-budgetary funds. Mainly from FPC-19, i.e. the COVID-19 Prevention Fund. It amounts to over PLN 154.3 billion and increased by almost PLN 6.2 billion during the last quarter.

The debt of activities resulting from the PFR financial shield has not changed for two years – it is almost PLN 74 billion. PLN 13.8 billion)” – enumerates “Rzeczpospolita”.

As the journal remindsSupreme Chamber of Control when assessing the budget two years ago, it warned that the government is pursuing a policy that is not conducive to the transparency of public finances. A few days ago, NIK for the first time negatively assessed the implementation of the budget. What happens to debt outside the budget, NIK called “alternative budget” – reminds “Rz”.

– This is double-entry bookkeeping. The one covered by the Budget Act is subject to the Sejm’s audit, the other is not. NIK has pointed this out many times. The government’s budget implementation report shows a deficit of PLN 12 billion, while everyone knows that the actual deficit is around PLN 100 billion. The report on the implementation of the budget, which the parliament receives, contains a precise settlement, but we do not know what exactly the remaining PLN 88-90 billion was spent on. Who controls it and how? There are many such extra-budgetary funds and there are many disposers. Only in some time, when we subject them to a real audit, we will see how many irregularities there were. This part of public spending additionally spoils the financial system of the state – commented for the newspaper prof. Jerzy Hausner, chairman of the OEES program council, former deputy prime minister for economy.

We know the amounts, but I don’t know what they are spent on

Maciej Bukowski, an economist from the University of Warsaw and the head of WiseEuropa, notes that this “political economy has moved us towards illusion”. It also indicates that we know less and less about the debt, because it is contracted, for example, by Bank Gospodarstwa Krajowego, which may hide behind banking secrecy.

– Thanks to Eurostat statistics, we find out what these amounts are. We do not know for what specific purposes they were borrowed and under what conditions – emphasizes Bukowski.

READ MORE: Morawiecki on the budget deficit: PLN 12 billion. “Not a real number”>>>

Main photo source: Marcin Obara/PAP

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