Poland’s first FCL arrangement was approved on May 6, 2009. A successor arrangement was approved on July 2, 2010. The Polish authorities have stated that they intend to treat the arrangement as precautionary and do not intend to draw on the FCL.

Following the Executive Board discussion of Poland, Mr. John Lipsky, First Deputy Managing Director and Acting Chairman of the Board, made the following statement:

“Poland’s macroeconomic performance was strong in the decade leading up to the global crisis, supported by sound economic policies. Inflation was brought down to low single digits, the commitment to the EU Stability and Growth Pact helped lower the fiscal deficit relative to GDP and limit government debt, and strong financial oversight bolstered the resilience of the financial system.

“Strong policy frameworks allowed the authorities to undertake countercyclical monetary and fiscal policies in response to the global crisis, while preserving financial sector stability. At the same time, the FCL arrangement supported investor confidence. As a result, Poland was the only EU economy to avoid a recession in 2009, and the government maintained access to international capital markets on favorable terms.

“The economy gathered momentum in 2010, underpinned by low interest rates, a neutral fiscal stance, improving external demand, and rising confidence in the wake of the second FCL arrangement. Looking forward, economic growth is projected to remain solid and balanced. The authorities are committed to keep implementing economic policies that preserve macroeconomic stability.

“However, sizeable downside risks remain, particularly from the possibility of further spillovers of financial turbulence in other parts of Europe. Against this background, the Executive Board today approved the authorities’ request for a new arrangement under the FCL facility as a successor to the previous arrangement approved in July 2010. The authorities intend to continue to treat the FCL arrangement as precautionary.

“The augmented duration and size of this successor FCL—new features made possible by the recent reform of IMF facilities—will allow the FCL to play an even stronger role in insuring Poland against external risks while continuing to support the authorities’ overall macroeconomic strategy.”