Report on action taken by Poland under the excessive deficit procedure
On 21 October 2025, the Council of Ministers adopted Report on action taken by Poland under the excessive deficit procedure

Since July 2024, Poland has been subject to the excessive deficit procedure EDP. In accordance with the EU Council recommendation, in order to eliminate the excessive deficit, it is necessary to comply with the net expenditure growth rate as set out in the Medium-Term budgetary and structural plan for 2025–2028, adopted by the Government in October last year. The 2024 reform of the economic governance framework introduced a medium-term approach in the EDP, which is no longer focused on a specific year for the correction of the excessive deficit, but rather aims to ensure that the government deficit is brought and maintained below 3% of GDP over the medium term.

In January 2025, the EU Council obliged Poland to submit, every six months, starting from 30 April 2025 and continuing until the excessive deficit is corrected, reports on progress in implementing the Council Recommendation.

Report presents in detail the measures undertaken by the Government since the Annual Progress Report on the implementation of the "Medium-Term Fiscal-Structural Plan for 2025-2028", covering both those included in the draft Budget Act for 2026 and additional measures not included in the draft, which represent a positive risk factor for the forecast presented in the draft Budget Act for 2026 and in the Public Finance Sector Debt Management Strategy in the years 2026–2029.

According to the estimates contained in the report, after taking into account the above-mentioned revenue-side measures, cumulated  growth rate of net expenditure of the general government in 2024-2026 will exceed the growth rate recommended by the EU Council. However, this deviation (amounting to 0.4% of GDP) will remain within the flexibility granted to Poland in July for defence-related expenditure (the so-called national escape clause).
 

On 29 April 2025, the Council of Ministers adopted the first Annual Progress Report on the implementation of the "Medium-Term Fiscal-Structural Plan for 2025-2028".

The Member States of the European Union are obliged to submit an annual progress report on the implementation of their medium-term fiscal-structural plans, by 30 April of each year.

The expenditure path, which is a key element of the Plan, has been positively assessed by the European Commission. The Ecofin Council endorsed this trajectory on 21 January 2025 and indicated that in order to eliminate the excessive deficit it is necessary to adhere to the expenditure growth rate set out in the Plan.

The primary purpose of the Report is to provide information that will enable the Commission to assess the implementation of the Council recommendations. The European Commission assessment concerns only compliance with the expenditure path recommended by the EU Council and is made on the basis of the outturn data for the previous year.

The budget part of the Report (Chapter I) contains an estimate of the expenditure growth rate together with current information on measures supporting the reduction of the excessive deficit, in particular those included in the Budget Act and the Plan. 

The structural part (Chapter II), prepared by the Ministry of Economic Development and Technology in cooperation with the ministries, primarily presents the progress in the implementation of the reforms and investments presented in the Plan to implement the common priorities of the EU and the recommendations of the EU Council for Poland issued during the European Semester.

On 8 October 2024, the Council of Ministers adopted The Medium-Term Fiscal-Structural Plan for the years 2025-2028.

In line with the EU legislation, which entered into force in April 2024, every 4 years Member States should submit the medium-term fiscal-structural plans to the Council of the European Union and the European Commission and publish it¹. The Plan has been drawn up on the basis of the EU legislation and the European Commission’s guidelines². It uses the draft budget act for 2025 and the information available until 30 September 2024. 

The Plan presents the expenditure path, which provides for a gradual and growth-friendly reduction of the nominal general government deficit within 4 years. As a result, it should be possible to reduce the deficit to below 3% of GDP in 2028, thus exit the excessive deficit procedure (EDP) in 2029 and bring the general government debt below 60 % of GDP in the medium term.

In contrast to the budget act, the Plan is multi-year. If the Plan’s expenditure path is positively assessed by the European Commission, it will be recommended to Poland by the EU Council. Implementation of the Plan will be provided through annual progress reports (in April) and subsequent budget acts until 2028.

¹ Regulation (EU) 2024/1263 of the European Parliament and of the Council on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97
² The European Commission’s guidelines of 21 June on information requirements for medium-term fiscal-structural plans