NEW YORK – Quietly, as the looming possibility of a U.S. military attack on Syria dominated news internationally, the government of Poland announced a decision to confiscate half of the nation’s pension funds in an attempt to delay an impending government debt crisis.

While details remain hazy, Reuters reported Sept. 4 that Polish Prime Minister Donald Tusk announced a government decision to transfer to ZUS, the government pension system, all bond investments in privately owned pension funds within the state-guaranteed system.

For now, private pensions in Poland will be allowed to keep equity investments that in the Polish state-guaranteed pension system tend to be approximately half of all private pension investments.

Polish Finance Minister Jacek Rostowski said the change will reduce Polish national debt about 8 percent of Polish Gross Domestic Product, or GDP, a move that allows the Polish government to resume another round of aggressive debt creation by borrowing in international markets, as reported by ZeroHedge.com.

By confiscating, or otherwise “nationalizing” the bonds held private retirement accounts of Polish citizens, the government – with public debt currently standing at approximately 52.7 percent of GDP – circumvents two threshold restrictions that deter the government from allowing debt to rise to over 50 percent of GDP, followed by a second deterrence that kicks in when national debt hits 55 percent of GDP.

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Reuters reported that by shifting bonds held in private retirement accounts into ZUS, the government can book those assets on the state balance sheet to offset public debt, giving the government more scope to borrow and spend.

As is the case with other nations in the European Union, Poland, faced with slowing economic growth, a grim job situation and declining tax revenues, has been forced to borrow to maintain the nation’s large social welfare system without imposing austerity measures.

International private investment advisers reacted with shock and dismay.

The reform is “a decimation of the [private pension fund] system to open up fiscal space for an easier life now for the government,” Peter Attard Montalto of Nomura Securities told Reuters. “The government has an odd definition of private property given its claims this is not nationalization.”

Private retirement accounts in Poland hold assets worth about 20 percent of Polish economic output and are among the biggest investors on the Warsaw bourse.

How the move will affect many international investment firms remains uncertain, but the Polish private pension market includes many well known firms such as ING, Aviva, Axa, Generali and Allianz.

Reuters further reported Polish government officials have tried to reinsure private retirement investors, saying the overhaul avoids the more radical options of taking both bond and equity assets away from the private retirement founds outright, in a more comprehensive government confiscation.

Poland’s private pension until now has been a hybrid system in which mandatory contributions that are made into both the state pension vehicle, ZUS, and the private funds that are collectively known by the Polish acronym OFE.

Although Poland is in the EU, it continues to utilize the zloty as the national currency, not the Euro.

Poland’s move follows a similar move by the Mediterranean island-nation of Cyprus in March when the government confiscated 10 percent of all bank accounts. Cyprus sought to raise 6 billion euros to meet a condition set by international bankers, including the International Monetary Fund, or IMF, as a condition of finalizing a proposed Eurozone bail-out.

In November 2012, WND reported the Obama administration was exploring a creative way to finance continuing trillion-dollar annual federal budget deficits by forcing private citizens holding IRA and 401(k) accounts to buy Treasury bonds.

WND report two years earlier that the U.S. Department of Labor and the Treasury Department held joint hearings on whether government lifetime annuity options funded by U.S. Treasury debt should be required for private retirement accounts, including IRAs and 401(k) plans.