Poland is around the EU average in terms of public debt-to-GDP. However, with high military and social spending, the planned deficit-to-GDP ratio for 2026 will be the largest in the Union. With each year of a persistently high deficit, Poland’s position in the ranking of the most indebted EU member states will continue to rise.
This creates a self-perpetuating debt spiral, as the increased risk perceived by investors and state creditors leads to higher bond interest rates compared to those of eurozone countries. This, in turn, may become another argument for replacing the Polish sovereign złoty with the euro, something PM Donald Tusk has advocated in the past.
Indeed, combined with the continued irresponsible policy of living on credit, a Greek-style scenario could eventually materialise. This is a real risk, as factors such as high social spending, an excessively complex and costly administration, excessive bureaucracy, demographic challenges, complex labour law, and social reluctance to implement structural reforms have long been present in Poland. Adopting the euro—which could enable the continued financing of populist policies through even cheaper credit rather than through economic development—may therefore become an irresistible temptation.
Łukasz Bernaciński, PhD is director of Ordo Iuris’ Center for Analyses and Studies, Warsaw
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