Technical Assistance Reports

Republic of Poland: Technical Assistance Report-Aligning the Stabilizing Expenditure Rule to the European Union Fiscal Framework

Publication Date:

June 12, 2024

Electronic Access:

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Summary:

The stabilizing expenditure rule (SER) in Poland has been instrumental in fostering fiscal discipline in the years leading up to the pandemic. The pandemic and subsequent shocks severely tested the expenditure rule. Returning to the SER limit after severe shocks proved challenging, making clear the needs to revise the SER to preserve its credibility. The government could enhance the credibility of the expenditure rule through broadening its coverage and strengthening compliance, including establishing an independent fiscal council. Moreover, aligning to the EU fiscal framework will require (i) ensuring expenditure limits implied in the SER to be consistent with the EU net expenditure path; and (ii) providing explanation on the differences in expenditure coverage and classification between the SER and the EU fiscal framework to ensure compliance. Over time, transition to binding multi-year limits in the SER would improve linkages between annual budgets and medium-term fiscal planning.

Series:

Technical Assistance Report No. 2024/049

Subject:

EU governance framework Expenditure Fiscal councils Fiscal governance Fiscal policy Fiscal rules International organization Monetary policy

Frequency:

regular