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Eastern Europe

Polish government announces huge investment plan

Poland's prime minister has unveiled a multibillion-euro investment plan to fuel growth. The move is also aimed at boosting support for the government, which has seen its popularity dwindling of late.

On Friday, Prime Minister Donald Tusk announced a big investment program aimed at fostering growth as Warsaw fears that two decades of solid expansion might slowly come to an end.

Germany's biggest eastern neighbor has for years been able to sustain robust growth while the economies in much of the European Union have sputtered and faced recession. But recent figures suggest that the Polish economy will next expand by only 2 percent, a meager figure by national standards.

"We should create leverage for investments and credits worth around 40 billion zlotys [10 billion euros, $12.66 billion] until 2015 and around 90 billion zlotys, if we count over six years," Tusk told a session of parliament.

Hedging bets

As European Union cash for important infrastructure projects is set to decline over the next couple of years, Warsaw's answer to the expected gap in resources will be to channel state-owned company shares and privatization revenues into a special fund to underwrite investment.

Tusk said the measure would go a long way towards boosting growth and keep fresh borrowing at bay. "We'll fight to ensure that debt and deficit stay at safe levels," the prime minister told parliament.

His announcement came as popularity polls have showed his center-right party overtaken by the opposition Law and Justice. Tusk is seeking a confidence vote in a bid to boost his coalition government's chances of sticking together between now and the next general election in three years.

hg/mkg (Reuters, AP, dpa)