WARSAW: A planned overhaul of Poland's pension system may be partly unconstitutional, the government's legislation centre said on Monday, questioning whether privately-run pension funds can be transferred to the state.
The move would shift government bonds held by the funds back onto the state's balance sheet, reducing Poland's debt relative to gross domestic product and giving the government more scope to borrow and spend.
The legislation centre echoed previous comments by another government institution, the State Treasury Solicitor's Office, which said the overhaul was a classic expropriation, taking away non-state property from legal entities and transferring them to a state organisational unit.
If the pension reform is blocked, it will have an immediate impact on the next year's budget, limiting scope for government plans to stimulate Eastern Europe's largest economy before a series of elections starting next year.
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