...Transitional Law: In November 2014, the Polish government adopted a transitional law that will regulate the 2015 equalisation payments for Polish regions. Such a law is needed because the formula for calculating the regional equalisation payments was ruled unconstitutional at the beginning of 2014 and a permanent replacement system has yet to be agreed on. This law includes regulations that may be incorporated into the permanent equalisation law due for 2016 and beyond, which Fitch Ratings expects to be passed in 1H15. Impact: The 2015 formula for the calculation of equalisation payments is positive for the major donors and neutral for the beneficiaries. The Region of Mazowieckie (BBB/Negative), as the biggest contributor of payments, will pay about 40% less in 2015 than it would have under the equalisation mechanism valid until end-2014 (see Fitch Affirms Region of Mazowieckie at 'BBB'; Outlook Negative under Related Research). The burden for the Region of Dolnoslaskie will also be significantly...
