Poor Poland (or Cyprus 2.0?)

by **patches70** on Fri Sep 06, 2013 2:54 pm

Poland is struggling with debt, with a debt ratio of 52% of GDP (haha! Is that all?). To clear the debt from their balance sheets Poland has confiscated half the funds held in private pension funds of it's people. Half.

Poland has a debt thresh hold of 55% of GDP, their version of a debt ceiling. By confiscating those funds and adding to the general treasury her thresh hold is indeed lowered and she is free to borrow and spend anew. Of course, as soon as they approach the thresh hold yet again they'll have to just go ahead and confiscate more from private funds or legislate the thresh hold away.

Those who had their funds confiscated have not, nor will, receive any compensation at all. It now belongs to the Polish government. This is obviously an extreme move to make by any standards. One that would not be taken if there were any other options. From Poland's point of view, there were no other options, they had too much debt.

Many of those pension funds raided were funds owned and operated by foreign companies. PIMCO (investment firm, specializing in pension accounts, US company), Aviva (insurance company, UK company) and many others. They've just seen half their pension funds in Poland nationalized.

A pension plan overhaul had been expected in Poland, but no one ever expected that private pension plans would be stolen nationalized overhauled while public pensions remained untouched.
Shock is how investors are viewing this development. Luckily, Poland though a member of the EU still has her own currency. After they've reached their debt limit, have confiscated all the private funds that they can and none will purchase her debt due to risk, then Poland can go ahead and print just as much of the zolty as she wishes.

The Polish Prime minister said this-

Poland wrote: We believe that, apart from the positive consequence of this decision for public debt, pensions will also be safer.

That's right, by confiscating funds and offering zero compensation Poland has made pension funds "safer". LMFAO.

Well, there you have it, yet another blueprint on how to deal with sovereign debt, either steal the needed funds from people's bank accounts or raid their retirement nest eggs.

http://www.reuters.com/article/2013/09/ ... UV20130904

Now, back to "War! In the middle east" and "the global economy is improving" memes, nothing to see here......

by **AndyDufresne** on Fri Sep 06, 2013 3:17 pm

Poland has done well in my EU4 game. So, that's something.

--Andy

by **notyou2** on Fri Sep 06, 2013 7:06 pm

Don't they make money selling sausages?

by **BigBallinStalin** on Fri Sep 06, 2013 10:23 pm

This is great. As we all know, theft creates an incentive for more production, thus they'll have to make more sausages to compensate for their loss in future earnings.

Future Polish presidents slogan: "WORK, YOU DAMN POLES, WORK!! Vote for me."

by **Baron Von PWN** on Wed Sep 11, 2013 8:48 am

Interesting, the article says something about government guaranteed pension plans. Does this mean the government took on the risk of the private funds? This might help to explain their willingness to just nab private property. Either way a discouraging turn of events.