Families in Poland are anxiously waiting to receive their first 500zl (€114) monthly benefit for each second and subsequent child. This was one of the most talked-about election promises announced by the ruling Law and Justice party ahead of its general election victory last October.
As reported by the Financial Times, however, the new child benefit was devised and pushed by the party’s political thinkers, and not its financial experts. Now, the cost of the handout has raised concern in the finance ministry.
Poland brought its fiscal deficit down from 8% in 2010 to 3% last year, but fears over looser spending have seen yields on Poland’s 10-year debt to rise 78 basis points over the past year. Warsaw has raised over €6.5bn in bond sales this year to account for increased spending.
There are 2.7m families and 3.7m children who are reportedly eligible.
The first payments are likely to start in July according to new legislation passed last week. It could provide larger families with the equivalent of another salary and, Warsaw hopes, boost the government’s popularity and increase fertility rates from one of the EU’s lowest levels, reported the Financial Times.
“This is a big move towards fixing Poland… real support from the Polish state for those who are the most important in our country: families with children,” said President Andrzej Duda. “I do not want a Poland where I hear all the time, ‘It cannot be done’.”