reforms

The first significant policy move from the newly elected president is the repeal of part of his predecessor’s pension reform. As promised during the electoral campaign, President Hollande is bringing the legal age for retirement back from 62 to 60 years for those who started working at an early age. According to the French employer’s association MEDEF, this will lead to a 0.5% increase of the social contributions paid by employees.

In 2010 the public deficit in Poland reached at least 7.9% of GDP. The public debt, in turn, balanced around 55% of GDP. In order to rescue public finance, the Polish government announced end of 2010 the dismantling of the reform of pension system. In the opinion of Polish authorities, this system (and especially its obligatory private component) is one of the major causes of the budget gap. This interpretation and the reform proposal, shifting majority of contributions currently allocated to fully funded private pension scheme (the second pillar to public pay-as-you-go long run, divide the Polish society and especially economists. The strongest and the most constructive opposition is led by prof. Leszek Balcerowicz – father of market economy in Poland.

„We reform firmly, gradually and effectively” said Poland’s Finance Minister, refuting accusations that his government is postponing important reforms to public finances until after the next parliamentary elections, expected for 2011. And yet these reforms can be summed up in only in one way: they are poor.