The Financial Times has it about right. Poland has been heroic in its moves away from socialism towards a free-market order. Fairly low and flat taxes, limitations in government spending, much lower debt than the developed world. But next week’s move to seize pension assets as a roundabout way to default on government debt without triggering a technical default is a huge step backwards. It will hurt foreign investors and it, along with Hungary and Kazakhstan’s similar move, sets a terrible precedent for other nations. Sad to see backsliding among such an improved student of liberty.
“Among turbulent emerging markets, Poland is one of the heroes – with a robust economy and well developed capital markets to rival those of Turkey and Russia, which are not part of the European Union. It may be about to tarnish its reputation.
As part of an overhaul of the country’s pension system, Warsaw will next week transfer from privately-managed funds to the state 150bn zlotys (€36bn) of Polish government bonds and government-backed securities, which will then be cancelled.”
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