Will Polish government coalition battle break the Polish economy?
Classified Polnews
Economists in Poland have warned that the Polish economy cannot withstand increased spending without being forced into a possible downward spiral. But an ongoing battle between Polish Government coalition partners may result in just such a spending increase and could possibly break the Polish economy.
Poland
Economists are warning that the Polish government should be making spending cuts now and preparing for an economic slowdown. They're warning that financial reform must occur now or never. See http://www.pulsbiznesu.pl/content.aspx?sid=6938&guid=FFB0C22D-B04E-4D9D-BFB0-4E29DB4326BF Economists say that the deficit must be cut now or never
But the Polish Government coalition is locked in a battle over who will control the coalition and that battle revolves around spending demands put before the Polish Government by the minority coalition partner Samoobrona. See Polish government control shifting to minority leftists
Within the past month Samoobrona threatened to not support a Polish government position unless the government agreed to increase spending to support promises that the Deputy Prime Minister and leader of the Samoobrona political party, Andrzej Lepper, made to his constituency. Under the veiled threat of new elections being forced by Samoobrona, the Prime Minister Jaroslaw Kaczynski caved into Lepper's demands and found the money by increasing taxes. Minority Polish government coalition parties force the Polish government into a tax increase
Samoobrona has once again threatened to not support the Polish government and to not support the passage of the Polish budget unless there is more spending on other programs.
Samoobrona wants spending increases based on a projected growing economy.
The proposal by a Samoobrona directly contradicts the recommendations of the economists who are predicting a slowdown in the economy.
The Prime Minister must now make a very tough decision. For him to get enough votes to get his budget approved, he has to increase spending. If he increases spending, he chances the breaking the Polish economy in the not too distant future.
Will he agree to an increase in spending and possibly jeopardize the Polish economy or will he take a firm position on his budget and chance going to new elections?
