Poland and the International Monetary Fund

[3] High debt severely hindered Poland's transition, with annual loan and interest payments equivalent to US$10.3 billion, one-sixth of the country's gross domestic product (GDP).

[4] Poland's first IMF agreement was approved in February 1990 for a one-year term of special drawing rights (SDR) 545 million.

[8] Political opposition led to a deviation from the IMF's reform program, with the government easing monetary policy in the second half of 1990.

[6] The Paris Club, an informal group of Western governments, announced a proposal to forgive half of Poland's US$33 billion debt, contingent upon the nation signing a new arrangement with the IMF.

[9] Although the IMF hoped for Poland to take a more active role in limiting inflation, the organization offered the country a new arrangement from its Extended Fund Facility (EFF).

[7] Supported by the IMF, the Polish government proposed conservative fiscal policies, including expenditure cuts and new taxes equivalent to 5% of GDP.

[6] The London Club, an informal group of international private lenders, agreed to reduce Poland's US$13 billion debt by 45% contingent upon an IMF arrangement.

[14] Poland's next arrangement with IMF occurred 15 years after the previous SBA in 1994, in the form of a Flexible Credit Line (FCL) in 2009.

[15] Its aim was to provide the organization's members with an alternative lending stream to a short-term balance of payment deficits caused by external shocks.

[15] FCL is similar in structure to a SBA, as it must be requested by the member nation and approval is dependent on predetermined qualification criteria.

[11] The two principal distinctions in comparison to SBAs are the absence of access limits or conditionalities, as FCL-qualifying nations are perceived to consistently implement responsible and appropriate macroeconomic policy.

[16] The credit line increased the country's reserves by one-third during this period and provided security against macroeconomic issues deriving from a volatile currency which had seen a 40% fall between July 2008 and April 2009.

[24] Morawiecki stated that the decision was determined following analysis of tax data, macroeconomic parameters, and evaluation of budget stability and currency reserves.