Confederate press conference attended by Deputy talker of the Sejm Krzysztof Bosak and associate of Włodzimierz Skalik, 10 October 2024.
Krzysztof Bosak:
– Today, on behalf of the Confederation, together with Vladimir Skalik, we want to mention to the draft budget for 2025.
What is conspicuous and what confirms our diagnosis is that Polish state – whether during the erstwhile government or the current 1 – is increasingly, increasingly thoughtlessly, increasingly bravado towards irresponsible fiscal policy. A policy of spending money with a light hand for very different purposes. And justified, and totally unjustified, on credit. The cost of sovereign debt.
And now, immediately responding to possible criticism. We know what budgetary policy is. Deficit and debt are the tools of this policy. And everything can be exaggerated.
Of course, right now. is fashion in economical environments to say that debt has no risks, is not bad. But that's just not true!
To a certain ceiling the state can be indebted, above a certain ceiling risks begin and over-standard costs begin. On 1 side The cost of this debt, together with the scale of the increase in debt, could increaseAnd they're getting bigger, of the another part the problem with borrowing this debt can and is increasing.
Today, our country is disproportionately indebted to the volume of its financial market. Therefore, we increase abroad debt as a Polish state in order to safe further budgets.
Third, the share of debt service costs in general budget costs is increasing. The bigger the public debt is not, as the Left says, “the better, due to the fact that the state will grow better”, it is simply a fairy tale for the naive. The more public debt we have, the greater the share of the cost of serving debt in the budget, not improvement expenditure!
A healthy economy can, of course, as the explanation of economics, economics, economics and economics teaches it, any economical imbalances are exacerbating budgetary policy. But in order to deflate this thing, in times of prosperity, it is essential to pay off these debts a little, and in times of bad economics a little.
And the doctrine right now is that Whether good times or bad, we owe as much as we canWe say it's good, and we're done with the flood! No, it's not smart politics.
In addition, this full left-wing communicative about debt allowing improvement policy to be created – left-wing and Pisan let us add. due to the fact that Prime Minister Morawiecki besides utilized this communicative and bet economists with a alternatively left-wing deviation. All this communicative is so untrue that very A crucial part of the expenditure that politicians are adopting here in the Sejm is not developmental.It's just social.. And we can analyse whether they were needed or not, reduced inequality or increased, stupidly or wisely, but that's not mostly improvement expenditure.
Now a small bit about numbers to capture the scale.
Somewhere between 2012 and 2022, For 10 years we had the state budget deficit only erstwhile shot more than PLN 50 billion. It was in the first year of the pandemic, that is, 2020.
The current draft budget for the next year is presented with a deficit amount of SIX AGEs higher, i.e. PLN 290 billion. This is not the amount of the full budget, it is only a deficit: PLN 290 billion.
Well For 10 years, we have not gone beyond 50 billion, and now we are to pass a budget with a deficit of nearly 300 billion PLN! I'm not old yet, but I'm old adequate to remember that The full state budget was about as large as the current deficit!
The increase in the budget deficit is alarmingBecause last year it was little than 200 billion, so we have a deficit increase of 50% a year. 2 years ago it was under 100 billion, which is 85 billion in 2023, in 2024 already 184 billion PLN and in 2025 it is expected to be 290 billion PLN. But if we increase the budget deficit by 100 billion all year, where will we be in the 10's? A billion gold deficits?
I think it is truly essential for individual to call out, ‘ Be careful! ’ And the force that calls out “Remember!” is the Confederate.
Once again, it's not that we're any kind of dogma, as the various quarter-intelligents say, who will read 1 left-wing book and think they realize everything from economics or public finances. The point is, we've been looking at these numbers for years and seeing what's happening. What is happening behind the scenes? Someone's got to do these budgets.
The more the budget implementation depends on debt-taking on the national and global financial market, the little power the democratically elected government has in Poland, and the more power the financial markets have with global institutions that can dictate the rules of debt to us!
Just as the European Commission has done in erstwhile years, saying: you want KPO, you want debt from the financial market, do what we say! Are you going to do something else? There's no candy, you're not!
Now, how much money do we request to borrow? First of all, who's doing this? Ministry of Finance. The Ministry of Finance travels the planet and presents the Polish state as a good debtor. And we can tell ourselves that we are an economy with the most unchangeable growth, that we have good forecasts and so on, while in the financial markets we are valued as a country of higher hazard than the richest Western countries. And it's besides hard to do otherwise, due to the fact that there are any nonsubjective factors, specified as our energy, like the proximity of war, like a lower level of wealth, a lower level of industrialization that makes us so valued. It's just She'll lend us more money.. It's a real measure.
Not just these growth rates. And now how much money do we borrow? In 2025, the increase in bonds to be issued, given by the press, is estimated at PLN 100 billion – the increase itself. Last year, the Treasury officially sold 252 billion bonds, now it has to sale them for 366 billion. But note, if anyone thinks this is all, they're in deep mistake and they don't know what they're talking about. For these are only government deficit and deficit bonds hidden in another around-budget funds.
There is something else that barely anyone remembers, and in my opinion, we are the only political force that will remind of it, how debt handling. And debt service is called bond roll. I mean, to keep this debt at the same level, you gotta sale quite a few bonds to keep the debt at the same level.
Data for the year are present that This year, the Ministry of Finance, in order to cover the deficit and rotation the debt, had to sale bonds for PLN 420 billion! I ask, how many billions of PLN will the Ministry of Finance gotta sale bonds next year? Is the debt policy forecast and deficit coverage already known? Well, you don't should be a large economical genius to say it's going to be with a large probability over half a billion zlotys! This will be the first time in the 3rd Republic, erstwhile the Polish State will gotta sale bonds for over half a trillion zlotys.
And it is not that if no 1 in the Polish parliament understands or analyses these data, then no 1 reads or analyses these data in banks or in credit rating agencies. Of course it is read, it is analysed, and the cost at which Poland will be borrowed capital, it will be the cost dictated in relation to the data we are talking about – and others are talking about, and this one, this 1 wrote it, can be indebted, the soul of hell is gone. If you're naive, believe it.
The debt of the Treasury itself next year will cost PLN 75 billion. So 75 billion zlotys will be paid only for interest. Only! It's not going anywhere. It'll be the pure profit of the financial institutions that debt us. It is most likely better for us to spend specified money on investments in Poland, for example on bankrupt wellness care, construction of railway lines, construction of CPK, than to make it a profit for owners of home and global banks.
We call for reflection on this issue. Dear left, from Left, from PiS, from Platform, from PSL and from Poland 2050, which you make and support specified a policy, answer the question, do you truly think that each debt is harmless and that all debt is safe? It's just not true. If that were true, the states would not go bankrupt and yet the states must restructure their debt, declare bankruptcy precisely due to the fact that there is no free lunch on the global financial market. Whoever pays is the 1 who dictates the rules of the game.