Poland's premier backs under-fire finance minister

Reuters News
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Posted: Jul 24, 2013 7:54 AM
Poland's premier backs under-fire finance minister

WARSAW (Reuters) - Poland's prime minister praised the performance of his finance minister on Wednesday, cooling recent talk that Jacek Rostowski could soon be replaced due to divisions over economic policy.

In June, sources close to the government told Reuters that Prime Minister Donald Tusk might want someone else in the finance minister's post as British-born Rostowski would not accept a loosening of fiscal policy to fix a stumbling economy.

This view has since been reinforced by the government's decision to revise this year's budget after the slowdown hit tax revenues, a move seen as unpopular with the finance ministry.

Local media speculated that Rostowski could be replaced by the European Budget Commissioner Janusz Lewandowski.

But Tusk played down such expectations.

"Someone who acts at a time of a crisis surely makes mistakes, but the balance of Rostowski's actions is absolutely positive and thanks to him we pay less for our borrowings," Tusk said at a news conference in the Polish city of Pulawy.

The difficult fiscal situation has been eagerly used by the main opposition party, Law and Justice (PiS), who have called for a special parliamentary committee to investigate budgetary issues as well as Rostowski's actions.

Under the new budget plan, this year's deficit will be widened by about $5 billion.

Poland will suspend a rule that prevents the deficit growing if, as is the case now, public debt is over 50 percent of gross domestic product. At the same time, there will be spending cuts worth about $2.6 billion.

The lower chamber of the Polish parliament, Sejm, started a 4-day debate on the budget revision and changes in fiscal law on Tuesday.

(Reporting by Dagmara Leszkowicz; Editing by Toby Chopra)