82nd International Atlantic Economic Conference

October 13 - 16, 2016 | Washington, USA

Finance policy in Polish transformation

Sunday, October 16, 2016: 11:55 AM
Emil Antoniszyn Sr., Ph.D. , ECONOMY, Witelon State University in Legnica, 52-339 WROCLAW, Poland
After political changes in 1989, Poland received the great opportunity to become a free market economy. Structural and ownership reforms provided a force necessary for new economic development. After the Economic Transformation Program established by Polish finance minister L. Balcerowicz, the importance of Polish finance policy significantly increased as the state transformed to a free market economy and a new scope of public finance developed.  The purpose of Balcerowicz’s plan was an expedited break with the state planned economy and a turn to market equilibrium. Rapid changes caused serious social problems; including jobs lost at closed factories and depressed living standards. At the same time, reforms gave new chances for enterprising people to develop a free market and build a wealthy society.

In this paper, we use statistical, legal and financial analyses of data from 2004 to 2015, including statistical data from the Main Office of Statistics (GUS) and the National Polish Bank, regarding the budget and budgetary deficit. The methodological basis of the author’s research includes works of, among others, M. Blaug’s “The Methodology of How Economists Explain.” Examining prospects for Poland’s financial policy in the forthcoming years, we find that it is not beneficial, but even harmful for Poland. Socio-economic ties with the EU are weakening. The basis of the agreements with the EU and EFTA was the principle of asymmetrical liberalization, which formally meant greater advantages for the weaker partner, i.e. Poland, expressed in the early start and faster pace of ‘opening-up’ on the part of the EU and EFTA compared to Poland. As a result, after a few years, a pro-west direction in Polish financial policy formed, particularly in foreign trade. The present political situation in Poland shows the departure of Prawo i Sprawiedliwość (PiS) party projects from any real financial capacity of the state in conditions of a market economy. We can observe this train of thought in terms of an authoritarian state. The evidence of this is the colossal foreign debt of Poland, which at the end of 2015 amounted to PLN 1.3 trillion with GNP at 1.7 trillion. The policy of managing public debt in the EU is of prime importance and its assistance for us seems to be indispensable. The current financial policy of the present government remains contradictory to EU policies and does not comply with international realities. This leads us straight into a Greek-type crisis.