Poland braces for automatic austerity as debt nears 55% GDP threshold by 2028

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Poland’s government projects its public debt will breach a legal threshold of 55% of GDP by 2028, triggering automatic austerity measures under national law, according to a debt management strategy approved this week.
Finance Minister Andrzej Domański’s projections show net public debt rising to 54.7% of GDP in 2027, then 57.4% in 2028 and 58.1% in 2029 before easing to 57.3% in 2030. The 2028 breach would be formally confirmed in 2029, forcing the government to draft a 2030 budget with no deficit or one that reduces the debt-to-GDP ratio .
The law mandates a freeze on public-sector wage growth, pension indexation limited to inflation, a fiscal consolidation program, a review of state spending and revenue rules including VAT, and restrictions on local government budgets. The 2027 budget approved Tuesday forecasts revenues of 696.4 billion zł, expenditures of 977.6 billion zł, and a deficit of 281.2 billion zł .
Estonia’s government extended reduced salary indexation for top officials through 2030, saving an estimated €32.3 million over three years. The measure, initially introduced in 2024, applies to judges, ministers, and other senior roles, though judges argue it may violate the constitution .
In Germany, childless workers will pay an additional 0.3 percentage points in long-term care insurance contributions starting next year, raising the rate to 4.5% of gross income to close a financing gap. The change follows a 2001 constitutional court ruling requiring lower burdens for parents .
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