The establishment of the Economic and Monetary Union (EMU) on January 1st 1999 had a considerable effect on economic policies (in budget policy, in particular) of the "euro-zone" countries. Although the budget policy remained a domestic matter, it came under a joint control and coordination.

The need to ensure a rule-based, stable and coordinated functioning of the European Union had an effect on the member states' attitude towards the degree of exposing their domestic financial matters to the external interference. The "euro-zone" countries recognize and accept the need for intervention from the EU institutions, particularly as far as the public finances are concerned.

Excessive state budget deficit and total public debt are of primary importance here, since they may have a negative influence on the Economic and Monetary Union as a whole.

Within the last few years the "euro-zone" countries have aimed at keeping the ratio of their budget deficits to GDP below the referential 3% of GDP. Some of them have even reported a positive balance of their budgets. As for Poland - an applicant state to the EU, and soon also to the Economic and Monetary Union - the ratio of budget deficit to GDP is unfortunately much higher.

On the other hand, the public debt and its ratio to GDP all combined put Poland in a much better situation. Poland has been in compliance with the requirements of the Maastricht Treaty (stating that the ratio of public debt to GDP should not be higher than 60% of GDP) for quite a long time now and was the third country, after Luxemburg and Ireland, to achieve this aim (2002).

Although some of the "euro-zone" countries postulate relaxation of the timetable towards budget balance, the European Commission and the European Council remain rigid and unbending. Their policy aims at minimizing the problems which Germany - the initiator of the current Stability and Growth Pact - and probably France are facing at the moment. The growth of the above mentioned ratios in these two countries may bring about instability of their public finances.