EU’s 5 billion euro aid for Poland may not cover all flood losses, minister says

By Karol Badohal

WARSAW (Reuters) – Polish Finance Minister Andrzej Domanski said on Friday a pledge worth 5 billion euros ($5.6 billion) from the European Union to help the country cope with the fallout from its worst flooding in at least two decades may not be enough to cover its losses.

European Commission President Ursula von der Leyen said on Thursday the EU would make billions of euros available to help central Europe recover from severe floods.

“We know that the losses are very large, very high, although we do not know the exact number yet,” Domanski said in an interview with TVN broadcaster.

“So I think that this amount, these 5 billion euros for Poland is an adequate amount. It does not mean at all that it is an amount sufficient to cover all the losses.”

Poland, which forecasts its general government deficit at 5.7% of gross domestic product in 2024 and 5.5% in 2025, has been tasked by Brussels with reducing the shortfall to the bloc’s 3% limit in the coming years.

Domanski has previously signalled he was in favour of a four-year deficit reduction path.

“I will fight for this path of fiscal adjustment, that is limiting the deficit in the coming years, to be as gentle as possible, adapted to the exceptional situation in which Poland finds itself,” he said.

Warsaw has cited increased defence spending following Russia’s invasion of Ukraine, in addition to the COVID-19 pandemic and energy price shocks in recent years as the main cause for the elevated deficit levels.

($1 = 0.8959 euros)