THE IMPACT OF THE NATIONALIZATION OF THE PENSION FUND ASSETS EXPRESSED BY TREASURY BONDS ON PUBLIC FINANCE

Abstract

The aim of the nationalization of the pension fund assets expressed by treasury bonds was accounting reducing of open level of public debts and thus avoid exceeding the second prudential threshold according to national methodology to GDP. It was the easiest solution, which had immediate short-term effect. Reasoning that was conducted by government side was as follows: without necessity to fund additional borrowing needs due to OFE relation between debt and GDP would be significantly lower. Limiting or complete elimination of OFE will have positive influence on public finance also in a long-term period. The aim of the article is to demonstrate that OFE is not responsible for our public finance. The main reason for the imbalance are exceptions to the rules of the pension reform of individual governing groups. Consequently, if nationalization doesn’t solve any of the problems of structural imbalances in the polish public finance thus doesn’t close the path to re-build-up of debt. Therefore, it is necessary as soon as possible to star structural reforms and this time implementing them consistently.

Keywords

• OFE
• pension
• prudential threshold
• deficit
• public finance
• GDP