Poland’s Cristina Moment?

by Andrew Stuttaford

Hmmm…

Financial Times:

With its back pressed against the fiscal wall by an unexpectedly sharp economic slowdown, Poland’s government on Wednesday took an axe to part of the country’s pension system in a bid to bolster public finances.

Premier Donald Tusk said that part of the country’s obligatory pension system run by private funds would be dramatically revamped, with 120bn zlotys ($37bn) in government bonds held by the 14 funds being transferred to the government pension scheme and cancelled, which will reduce public debt by about 8 percentage points from its current 55 per cent of gross domestic product.

The government deficit could fall by about 1 per cent of GDP to just under 3 per cent due to lower borrowing costs….

The funds will keep control of the 111bn zlotys they hold in equities and current benchmarks will be loosened. The funds will be banned from investing in more government debt.

Tusk said that the millions of Poles currently enrolled in the privatised system would have the choice of staying in the scheme or of transferring their assets into the government-run pension system…