Poland's Tusk unveils big investment plan to ease downturn


* Polish economy, rare EU bright spot, is slowing sharply

* Tusk says to use state assets to leverage investment

* Pledges to keep debt, deficit at safe levels

By Dagmara Leszkowicz and Pawel Sobczak

WARSAW, Oct 12 (Reuters) - Polish Prime Minister Donald Tuskoffered voters a big programme of investment on Friday in aneffort to revive the slowing economy and halt a slide in his ownpopularity.

Tusk said trying to nurse spluttering economic growth washis priority, and that he would find billions of euros forinvestment in energy and other infra-structure projects.

In a signal to markets concerned that Tusk should not strayfrom his policy of prudent fiscal policy, he said theinvestments would not add to the debt or deficit in Poland,eastern Europe's largest economy.

"There is no other way for Poland than sustaining growththrough investments," Tusk told parliament in a speech. "Polandhas a real chance to defend economic growth and make ittranslate into more jobs."

Officials said state assets would be transferred tostate-owned bank BGK, and that this will be used to leverage 40billion zlotys ($12.66 billion) in investment forinfra-structure projects up to 2015.

Reuters reported last week that a plan for a "guaranteefund" was under discussion in the government. Under that plan,the guarantees would be in a non-state vehicle and so would notbe classified as debt.

Poland's economy will slow to 2.1 percent growth next year,the central bank forecasts. That is still healthy by thestandards of its European neighbours but a big drop for acountry that last year grew more than twice as fast and had beenviewed by markets as a rare bright spot in Europe.

The slowdown has hurt Tusk's popularity, with polls showinghis party had been overtaken by the opposition Law and JusticeParty.

In a measure likely to please voters, Tusk in his speechannounced that maternity leave would be extended and resourceswould be put into child-care. That was met with a round ofapplause from lawmakers listening to the speech.

Poland has until now managed to defy the downturn elsewherein Europe, mainly by pouring huge sums of European Union moneyinto roads and other infra-structure. It is the only EU countrynot to have slipped into recession in the past four years.

But Poland has spent most of the EU money, and the nextround of cash from Brussels will not kick in for two years, soTusk needs to find other sources of funds quickly.

($1 = 3.1604 Polish zlotys)

(Additional reporting by Marcin Goettig, Karolina Slowikowska,Adrian Krajewski; Writing)


Keywords: POLAND TUSK/