“The government must face this.” Prof. Hausner calls for an urgent review of state spending
We need to urgently review and rationalize our spending. That is: less funds for current consumption, and more for changes in the property, investment and productivity side of the economy. (…) We need to look at the state’s assets and consider how to generate more revenue from them. It is worth analyzing what land the army and the Military Property Agency have, what State Treasury companies, such as KGHM or coal companies, have, and whether all this land is necessary for them. The same applies to railway assets – says in an interview with “Wprost” prof. Jerzy Hausner, economist, former deputy prime minister, former minister of economy, labor and social policy, former member of the Monetary Policy Council. The Chairman of the Open Eyes Economy Summit Program Council also talks about, among other things, what the downgrading of Poland’s rating means, where the dispute between the government and the president is leading, where we are inferior to the Scandinavian countries and where the increase in the credibility of the NBP, which has not been observed for years, comes from.
Agnieszka Niehearowska, “Wprost”: Moody’s lowered Poland’s long-term rating to “A3” from “A2”. Are you surprised?
Prof. Jerzy Hausner: No, because two other rating agencies, Standard & Poor’s and Fitch, had already lowered Poland’s rating one category lower. Importantly, Moody’s commented on its rating with a neutral outlook, which means that it does not expect any further deterioration in the near future. Nevertheless, it is a clear signal to investors that the risk of lending money to Poland has increased. As a result, they will expect higher profitability. To put it simply: the interest rate that we as a country will have to pay for people buying our bonds will be higher.
Will Poles feel this decline in the near future?
The effect will be indirect because the valuation of treasury bonds may affect the assessment of other property assets by investors. Therefore, the negative effect will affect entrepreneurs rather than consumers.
Do you expect further declines?
The rating downgrade itself should be seen as a clear assessment: the budget situation and public finances in Poland are unfavorable. On the other hand, the neutral perspective results from the fact that the agency appreciates our high economic growth. As long as we maintain this growth, I do not expect the rating to deteriorate further.
There is also a thread in Moody’s argument that goes beyond economics. We are talking about the lack of cooperation between the president and the government.
There is no doubt that we have a constitutional stalemate – all government initiatives that could be aimed at balancing public finances, and thus maintaining a higher rating, are blocked by the president. And even if the government presented the most credible fiscal consolidation plans from the investors’ point of view, the probability of their implementation is relatively low.
This leads to a key question: how to stop the dynamic growth of debt? Do you share Dr. Henryka Bochniarz’s fear that the blocked government will ultimately have to reach into taxpayers’ pockets and raise taxes?
Let’s look at this in a broader context. We are dealing with a constant increase in public debt in relation to GDP. Fast enough that we are exceeding subsequent prudential thresholds specified in the Public Finance Act. Let me remind you that in 2025 the deficit reached as much as 7%. GDP and even if the government assumed a slight improvement for this year – i.e. a reduction to the level of approximately 6.5%. – then it is unlikely. In addition to the accumulated debt from the past, there is a high current deficit, resulting from, among others, from the increase in security spending.
If you were the Minister of Finance today, where would you look for savings?
