Poland’s public debt-to-GDP ratio has fallen to 48.1 percent under its current conservative government, far below the eurozone average of 90 percent and the EU average of 80 percent.
Southern European countries and Belgium, meanwhile, have debt-to-GDP ratios of over 100 percent.
The ratio is one of the Maastricht criteria for accession to the eurozone, but according to the latest Eurostat data, only 8 of the 20 eurozone states actually fulfill the 60 percent target for that ratio: the Netherlands, Ireland, Slovakia, Malta, Latvia, Lithuania, Luxembourg and Estonia. Even Germany, Austria and Finland have not hit the target.
Poland’s debt-to-GDP ratio inherited from the liberal government in 2015 was 513 percent. That was achieved by selling off public property and the effective nationalization of pension funds.
The fact that, despite major social transfers and the need for much higher military spending than was envisaged, the debt ratio has actually fallen is a major achievement of Poland’s current conservative government over its eight years in power. Poland’s state budget has more than doubled, yet its public debt remains under control.
There are two reasons for this. The first is a high rate of GDP growth. The second is the tightening up of the tax system, which has increased the flow of funds into the state’s coffers.
The reason the liberals failed to grow the budget was because they failed to grow state income at a sufficient pace. This is why they did not have significant social programs and had to sell off state property to keep the public debt-to-GDP ratio in check.