11.3.11

Poland experiences goodness of carbon tax: electricity the most expensive in EU




Not long ago Polish politicians, who steer the country declared that free market is the solution for the economic problems. Their supporters thought that they won their prize in casino but it appears that in reality they lost in Russian roulette.

 Once Civic Platform (led by Prime Minister Donald Tusk and FM Radek Sikorski - former employee of American Enterprise Institute in Washington DC) won elections it appeared to them that economic crisis passed somehow Poland hitting all of its neighbors. New government criticizing the Polish president and the fmr president of the National Bank of Poland, thanks to whose decision to postpone the euro adoption (now it seeems to be again euro fever - clearly someone wants to push the Central Europe to that totally failured system)  the state's economy survived financial tsunami, in the same time were creating more "jobs for boys (*)" enjoying stable situation. In effect an average increase in the government bureacracy was about 10 per cent.

When finally tsunami hit Poland, government reached for the reserves and the flexible credit line from the International Monetary Fund. The reserves were used to keep public debt at the end of 2010 on the psychological level a little below 55 per cent GDP.

In January however ruling politicians did not find new ideas except tax increase. Government increased taxes raising VAT rate from 22 to 23 per cent and from 7 to 8 per cent. Food tax and books/magazines tax increased from 0 to 5 per cent. Higher taxes are paying also taxi drivers. Government taxed more constructing materials increasing VAT tax from 22 to 23 per cent.

Economic crisis hits homes with higher food prices. For instance, only in one month average price of sugar increased about 35 per cent per kilo. (from 2.9 in Jan to 3.9 Feb.). More expansive is flower and salt, as well. The other reason for sugar price hike is the fact that EU imposed production limit on Poland and current government capitulated resigning from any negotiations.



Negative result of the EU policy is also increase of the electricity prices. In January 2011 Poland was forced to implement the white certificate, which is another name for a carbon tax. It is an obligation of the EU member to reduce their consumption of the electricity about 20 per cent to 2020. Poland has to support also renewable energy technology development and to purchase the CO2 credit. In effect government imposed on consumer 20 per cent of the new hidden tax in the price of an electricity to cover all of these obligations.

Looks like also the new bank tax will be imposed allegedly to provide more financial stability.

New president of the National Bank of Poland has the same view on euro adoption as his predecessor.

(...) backs the government's long-term strategy of taking Poland into the euro zone but says "we are not obsessed" with the common currency. The plan has moved to the back burner due to the global crisis and more recently the euro zone's own woes.

In such situation I wonder from where these people get so much optimism about the Polish economy, which seems to be nothing more than indeed Russian roulette. 

Ronald Reagan Quotes