Poland

Poland is slashing back plans to tap the bond market after a crackdown on tax avoidance raised more cash than expected, the Financial Times reported. The eastern European nation is running a budget deficit just a tenth of the size it forecast for this year, thanks to a pick-up in economic growth, as well as higher revenue from the tax reforms.

Polish Prime Minister Beata Szydlo sacked her finance minister on Wednesday and gave the job to the influential economy minister, saying a reshuffle was needed to make the government's wide-reaching economic stimulus plan more effective, Reuters reported today. Since winning an election last October, Szydlo's Law and Justice (PiS) party has pledged to spend billions of euros of private and public money to boost growth and wealth in Poland, while also giving the state more say in the economy.

The last overhaul of the pension system walloped Poland’s stock market, but the former banker charged with overseeing a new revamp says he is confident he can avoid a repeat, Bloomberg News reported today. “One of our aims is to strengthen the Polish capital market and make the bourse more attractive for companies seeking debuts,” Pawel Borys, who heads the state-run Polish Development Fund, said last week.

Poland's fourth biggest power group Energa said on Thursday it was not interested in buying assets or shares in state-run coal miner JSW as part of a rescue plan, Reuters reported. Poland's energy minister said on Wednesday that JSW, EU's biggest coking coal producer, may need a share issue as it needs more money than estimated last year. This has sent JSW shares 13 percent down on Wednesday and a further four percent on Thursday. Analysts also said that the comments have weighed on Energa's share price on fears that it will have to continue to help rescue state-controlled coal mining firms.

Poland risks breaching EU fiscal deficit rules in 2017 as the new populist government steps up public spending to pay for childcare handouts and promised tax cuts, the OECD has warned, the Financial Times reported. The EU’s sixth-largest economy is forecast to break rules mandating a fiscal deficit below 3 per cent of gross domestic product next year unless it backs down on the spending promises or finds a way to increase tax revenues rapidly.

Poland's prime minister has dismissed Deputy Finance Minister Konrad Raczkowski, the finance ministry said on Wednesday, over his comments that a few small lenders were destined to fail, Reuters reported. "We can confirm that Raczkowski has been dismissed by the prime minister," the ministry's press office said. Earlier this month, Raczkowski said that a few small Polish lenders were "toxic" and would go bankrupt later this year. In response, the financial regulator KNF said the banking sector was stable and effective.

Several small Polish lenders will fail this year, but their bankruptcies will not hurt Poland's financial system, deputy Finance Minister Konrad Raczkowski said. "Several banks are 'toxic' and they will fail this year still. They are small lenders, let me reassure you right away, and it will not disturb the Polish financial system," Raczkowski was quoted as saying by state agency PAP on Thursday. The failures will not be caused by Poland's new bank asset tax, Raczkowski said, but will be a result of mismanagement and poor institutional supervision.

Poland’s ruling party softened a tax on its financial industry which could have hurt its ability to finance the budget deficit, helping to rally government bonds today, Bloomberg News reported. Parliament’s public finance committee excluded banks’ roughly $41 billion in government- bond holdings from taxable assets “to prevent an increase in budget-financing costs,” Law & Justice lawmaker Wieslaw Janczyk, a deputy head of the committee.

The Polish president's economic advisor Zdzislaw Sokal told Reuters that the failure of SK bank which cost other lenders some 1.4 billion zlotys ($348.17 million) would not inflict any damage on the domestic banking sector. Sokal added that President Andrzej Duda was not ready yet to announce specific plans for legislation mandating a conversion of Swiss franc mortgages, one of his pre-election promises. Duda was elected in May. It was not clear yet, Sokal said, whether the conversion would be conducted at historical exchange rates, as this may be subject to discussion.

Coking coal producer JSW expects to reach an agreement with bondholders on a debt restructuring, the company's deputy head said on Friday, three days ahead of a deadline in the negotiations. State-controlled JSW is struggling to cope with record low coal prices and high mining costs and has had to cut costs. "Taking into account the talks up to now, both sides aim at an agreement and we assume that the agreement will be reached," Tomasz Gawlik told reporters at a news conference on the company's third-quarter results. He declined to give further details.