Polish Finance Minister Andrzej Domanski said on Friday that a pledge of 5 billion euros ($5.6 billion) from the European Union to help the country recover from the worst flooding in at least two decades may not be enough to cover her losses.
The worst flooding to hit central Europe in recent memory has caused widespread damage in Poland, the region’s main economy, with some analysts saying the final cost could equal or exceed that seen after the devastating floods of 1997.
European Commission President Ursula von der Leyen said on Thursday that the EU will allocate billions of euros to help central Europe recover from severe flooding.
“We know that the losses are very high, very high, although we don’t know the exact number yet,” Domanski told private broadcaster TVN24.
“So I think that this amount, this 5 billion euros for Poland is a sufficient amount. It does not at all mean that it is an amount sufficient to cover all losses.’
Domanski declined to answer questions about how much of the total damage would be covered by pledged EU funds – worth around 0.6% of Poland’s economic output in 2024.
“I’m not sure. Damage assessment is ongoing,” he said.
In 1997, massive floods devastated southwestern Poland, causing approximately 12 billion zlotys in damage, or 34 billion zlotys in today’s prices.
Infrastructure development over the past three decades has increased the extent of damage in the affected area, Polish economist Slawomir Dudek wrote on social media platform X earlier this week.
He said Poland may be forced to amend its 2024 budget once the final cost of the flood is known.
Poland, which forecasts the general government deficit to rise to 5.7% of gross domestic product in 2024 and 5.5% in 2025, has been tasked by Brussels to reduce the deficit to the bloc’s 3% limit in the coming years.
Domanski has previously said he favors a four-year deficit reduction course.
“I will fight for this path of fiscal adjustment, i.e. the reduction of the deficit in the coming years, to be as mild as possible, adapted to the exceptional situation in which Poland finds itself,” he said.
Warsaw has cited increased defense spending following Russia’s invasion of Ukraine, combined with the COVID-19 pandemic and shocks in energy prices in recent years, as the main reason for its increased deficit levels.
(1 dollar = 0.8959 euros)
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