After holding back for several months, outgoing Finance Minister Jan Pociatek finally admitted that the new four-party coalition government would be inheriting the state coffers with a much bigger hole than previously announced.
On Tuesday 22 June Pociatek told a group of independent economists that the state would have about EUR 1 billion less in taxes for this year than planned. In practical terms, this means the budget deficit for 2010 is likely to be in the region of 7 percent, rather than the 5.5 percent declared in official documents.
Pociatek blames the deficit on weaker tax revenues, while denying accusations that the deficit is due to higher government spending. “It was caused by a change in taxes … The state has been spending even less than is projected in the budget,” he said.
Pociatek clearly kept the bad news discreet in the run-up to the general elections on 12 June and also put off the meeting with economists for as long as he could. Analysts are now warning that the new government will have to make major savings and substantially cut expenditures.
The four centre-right parties that are about to take power have already indicated that they plan to combat the deficit by abolishing various tax-breaks, and the excise taxes on tobacco, alcohol and fuel might also be increased.