Poland overhauls pension funds to clear public debt | beyondbrics

Poland overhauls pension funds to clear public debt | beyondbrics:

"

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."

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