Poland's Tusk vows austerity to safeguard growth

Poland's freshly elected centrist prime minister vowed Friday to use his second consecutive term to introduce sweeping austerity reforms aimed at safeguarding growth amid crisis in the eurozone. Donald Tusk vowed to bring the annual public deficit to the EU ceiling of 3.0 percent of Gross Domestic Product next year and rein in the national debt to 52 percent of GDP from the current 53.8 percent, in a bid to keep Polish growth on track. A recent European Commission forecast put Polish growth at 2.5 percent in 2012 and 2.8 percent in 2013, after a robust 4.0 percent this year. Not yet a eurozone member, Poland is the only state in the 27-member bloc which has escaped recession, boasting 15.4 percent growth in the 2008-11 period while the EU as a whole suffered a 0.4 percent contraction. Tusk pledged to do away with wide-ranging tax breaks and raise the retirement age to boost the public coffers, along with tax hikes on raw materials like copper, silver and future shale gas supplies in Poland. Retirement age, currently fixed at 60 for women and 65 for men will be raised incrementally from 2013 to 67 for both men and women, by 2020 and 2040 respectively, he told parliament in a keynote policy address. Tusk also announced changes to pension privileges for the military, police, judiciary and clergymen. Employers would be required to raise pension contributions by 2.0 percent while farmers, who are currently exempt from income tax, will become taxpayers as of 2013. Public administration will also see cuts, with the exception of spending on the armed forces and the police. "Only strong players will make it through the crisis," Tusk said amid forecasts of a possible recession in Europe next year due to the eurozone's deepening debt crisis. "Someone once said that in the EU, one has a choice -- either to eat at the table or be on the menu. Poland will eat at the table," Tusk quipped. Earlier Friday, President Bronislaw Komorowski nominated a "continuity" cabinet following the October 9 re-election of the country's centre-right coalition led by Tusk. Parliament is expected to approve the 20-member cabinet lead by Tusk's centrist Civic Platform (PO) on Saturday. Having again teamed up with junior coalition partner, the PSL Polish People's Party, Tusk's government commands a stable majority of 235 in the 460-seat lower house of parliament. Key government figures including Finance Minister Jacek Rostowski, Foreign Minister Radoslaw Sikorski, Economy Minister Waldemar Pawlak and Defence Minister Tomasz Siemoniak have retained their posts. With Poland gearing up to co-host the Euro 2012 soccer championships with Ukraine, Joanna Mucha, 35, was named Sports Minister, one of four women in the new cabinet. A member of the European Union since 2004, Poland currently holds its six-month rotating presidency until the end of the year. Although it is obliged to adopt the single currency, no deadline has been specified for the move. Officials have vowed Poland will meet the macro-economic criteria for eurozone entry by 2015 but insist the country will only join after the debt crisis is resolved.