Brussels to give more money

26th February 2010

© Asia Kortas More cash to flow into Poland Share:

Poland received two pieces of good economic news from Brussels on Thursday related to its past and future economic growth.

Early in the day, EC Budget Commissioner Janusz Lewandowski announced that Poland would receive an additional EUR 1 bln in EU funding over the next two years as a bonus for having repeatedly beaten expectations for its economy.  

Lewandowski explained that some EUR 3 bln in additional funds were to be awarded to new EU members that had beaten official economic forecasts.  "In 2011-13, additional cohesion funds will be made available for these members, particularly Poland, but also Slovakia and the Czech Republic," he announced.  

The EC has not yet drawn up a formula for divvying up the money, but Poland is expected to be given at least half of the total.   

The funds come from monies unspent in previous years by the EU's 27 members. The extra funding will be available for projects to support infrastructure, protect the environment, and develop poorer regions. 

Later on Thursday, the EC released new economic forecasts for the community's largest members. In the report, Poland's growth rate for 2010 was raised to 2.6 percent.  Just three months ago, the EC estimated that the Polish economy would grow at a rate of 1.8 percent this year. 

"Poland positively surprised us in the fourth quarter of last year when the GDP rose by 1.7 percent quarter to quarter," EU Economic and Monetary Affairs Commissioner Olli Rehn said in a press conference. 

He added that Poland's growth had been driven primarily by domestic consumption, as well as by other factors, including the country's relatively elastic labour market, cuts in income tax rates, and the positive effect of the zloty's decline last year on exports.