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Poland cuts 2009 spending as revenues fall

WARSAW, Jul 2 – Poland\’s liberal government said Thursday it was cutting 2009 spending by three billion zloty (690 million euros, 969 million dollars) as revenues are expected to fall due to the global crisis.

The savings will be made with cuts to social benefits, spending in various government ministries and deferring some spending to 2010, Michal Boni, a senior advisor to Polish Prime Minister Donald Tusk told reporters.

Finance minister Jan Rostowski said the amendments would be submitted to parliament on July 7 at the latest.

"Talks with the ministries were fruitful. They also prepared the ministries for new savings planned for the 2010 budget," Rostowski said.

Last month the government increased the 2009 deficit from 4.0 billion to 5.9 billion euros (5.6 to 8.3 billion dollars) and revised economic growth estimates for 2009 down to 0.2 percent from 0.5 percent.

In February the government had already announced massive spending cuts for 2009 as the effect of the financial crisis began to be felt in Poland.

Rostowski reiterated no tax hikes were planned this year, but were possible in 2010.

"We have to have a path out of the deficit, but it will not be as steep as those in for example Britain," he said.

In 2008, Poland\’s public deficit came to 3.9 percent of GDP (gross domestic product).

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A deficit no higher than 3.0 percent of GDP is one of the key Maastricht Treaty criteria for entry into the eurozone. Poland vowed to adopt the euro as part of its 2004 EU accession deal but had not set a deadline for entry.

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