Winiecki, MPC: Poland needs no LTRO-like mechanism

Poland need not employ its central bank to spur corporate lending as the country is not troubled by a low rate of investments but rather a low rate of savings, Monetary Policy Council member Jan Winiecki said, referring to the plans announced by the new PM Beata Szydlo in her inaugural speech.

“First of all, most small and medium-sized companies finance their investments with own means,” Winiecki said. “As a result, already now the demand for credit is lower than supply.”

“[T]he basic problem of the Polish economy is not a low rate of investments – it is visibly sufficient for Poland to grow fastest among post-communists states long-term,” he said. “The problem is a low rate of savings.”

Moreover, experiences of countries where such a program has been implemented “are not positive,” Winiecki argues, pointing to inefficient investments in Hungary and low demand for central bank loans in Great Britain.

Prime Minister Beata Szydlo had named LTRO as a funding formula for increasing investments in the economy during her inaugural policy speech. Improved EU fund spending, activation of corporate deposits and expanded use of state funds, including at state-controlled firms, were also named as funding drivers.

jba/ maf/ ami

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