LAUSR

Growing volumes of public debt have been one of the characteristics of most free-market economies, including Poland. Financing investments, as well as current consumption with public borrowing, seem very attractive to governments. On the other hand, public authorities cannot use ever-increasing debt (see, e.g., Martins-da-Rocha, Vailakis 2012; Minea, Villieu 2010; Wigger 2009). Public debt instruments used to be treated as “risk-free” papers, and the last financial crisis verified this perception. The risk premium went up, making the cost of debt service higher. We should remember that lowering debt service costs is the essential aim of a public debt management strategy. In recent years, according to the debt management strategy in Poland (Strategia... 2018, pp. 9–15), this aim should be achieved by: • maintaining the flexibility of the financing structure in terms of market, currency, and instrument choice; • increasing the share of the domestic instruments; • decreasing the share of foreign currency-denominated securities; • maintaining the average time to maturity of public debt at about 5-years (which is a shorter term than the initial average term to maturity of instruments directed to foreign investors).