Warsaw, 21^st February 2019

 

The Union of Entrepreneurs and Employers on the eurozone – there is no need to hurry

 

The Union of Entrepreneurs and Employers has published a report on Poland’s entry into the Euro zone – it analysed probable profits and losses related to the possibility of Poland joining the Monetary Union and replacing the zloty with the euro. As a result of this analysis, scepticism is recommended as to the plans for the rapid introduction of the single market currency.

The study reminds the reader of the motives behind the creation of the euro. “From the very beginning, the euro was a political project, not an economic one. The fall of communism resulted in a political vacuum. Living in the shadow of the Soviet-American conflict, Western Europe faced several dilemmas, including the issue of solving the problem of a divided German state. Other European powers, primarily France, concluded that the consent to Germany’s re-unification was conditioned by their adoption of the single European currency. They feared the strength of the German mark,” remembers professor Robert Gwiazdowski, author of the report.

Due to the fact that non-economic factors were behind the introduction of the euro, many economists believed that this experiment could not succeed. “Nobel Prize winner Milton Friedman predicted that the currency would last for about 10 years. In fact, he was not mistaken, as it was after a decade when the eurozone suffered from a big crisis, which would end with the collapse of the project, had it not been for the European Union’s leading states, obviously motivated by political factors,” adds Robert Gwiazdowski.

The public opinion is convinced that Poland has committed to become a member of the euro area. Although this is seemingly true, it is worth recalling that no date has ever been set. Moreover, the accession to the eurozone was to be based on the criteria agreed to in Maastricht, which are no longer valid today. The report proves, therefore, that there is no legal possibility of pressuring Poland in the context of joining the Monetary Union.

In Poland, the discussion with regard to joining the eurozone resembles the one in Western Europe when the concept of the new currency were merely created. “The voices calling every now and then for the euro to be introduced as soon as possible are only political actions, without any justification. The wealth of nations is not the result of the colour of the paper one uses in a store to pay,” said Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers.

The report names a number of risk that could impact the Polish economy in the case of an ill-considered introduction of the euro. Interest rates set by the European Central Bank may turn out too low for Poland, which is a country with low GDP and a relatively low level of prices, which in turn may result in macroeconomic imbalances, including a real estate bubble. Furthermore, the Polish economy would be deprived of today’s trump card on the European market, namely low labour costs. Poland is not ready yet to compete with Western countries in other fields, e.g. with the degree of innovativeness.

The report also point to considerable differences betwen the Polish economy and the economies of euro area members, e.g. greater flexibility of the labour market or low development of the rental market. The common monetary policy may not be adapted to the cyclical situation in our country. When functioning within the Monetary Union, it is also more difficult to react effectively to the crises encountered.

“In a world of diversified economies, a common currency will either have an inflated value for some or an underrated for others. Strong countries will therefore become stronger, whereas weaker ones will become even weaker. Therefore, we have to first become a strong economy, and only then can we think about adopting a common currency,” says Tomasz Wróblewski, president of WEI.

 

21.02.2019 Report of the Union of Entrepreneurs and Employers: The Euro. A legal and economic analysis of the profits and losses of Poland’s accession to the euro area

 

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Warsaw, 19^th February 2019

 

Union of Entrepreneurs and Employers on Sunday trade in Europe:
Polish regulations extremely restrictive

 

Free trade on Sunday rather than any restrictions is the standard in Europe, and Polish regulations in this area, in the target shape, are extremely restrictive – these are the most rudimentary conclusions from the report by the Union of Entrepreneurs and Employers on trade on Sundays in Europe.

The postulates of limiting trade on Sundays are in Poland nothing new under the sun. This topic would come back every now and then to the public debate over the last several years, but it did not materialise in the form of specific provisions until November 2017, when the law on limiting trade on Sunday was passed.

“From the very beginning, the Union of Entrepreneurs and Employers was critical about the draft law limiting trade on Sunday,” says Marcin Nowacki, vice-president of the Union. “We pointed out that such a sectoral form of regulation would in no way serve the majority of employees. We also emphasised that it certainly would not help small shop owners, but rather the opposite, meaning it would lead to a wave of bankruptcies. Today we see that we were right.”

Regardless of the views on the regulations in force since March 2018, it should be noted that the supporters of these restrictions often refer in their argumentation to examples of other countries in the European Union where allegedly analogous provisions apply. Meanwhile, the Polish legislator, limiting trade on Sunday, decided to take a course directly opposite to European trends.

“One must stress the fact that most European Union member states do not restrict trade on Sundays in any way,” said Katarzyna Włodarczyk-Niemyjska, director of the Law and Legislation Department of the Union of Entrepreneurs and Employers. “Those countries that had decided to introduce such restrictions, did so a long time ago, in completely different socio-economic conditions and generally are now withdrawing from this solution and liberalising the law. In turn, Hungary, which decided to undertake such an experiment relatively recently, immediately, because after only one year of the new regulations being in force, returned to free Sunday trade.”

At the same time, the Union’s experts point out that the minority of countries – that decided to limit trade on Sundays – introduced a variety of solutions. The almost total ban, which is to be in force in Poland from 2020 on, is a negative phenomenon on a European scale. It turns out that the legal landscape in the area of limiting trade on Sundays is much more complex than the simple dichotomy: “total ban” or “total freedom”.

“In the case of countries that restrict trade on Sunday, the standard from which basically only Poland breaks out is to use a variety of mechanisms mitigating the negative effects of such regulations,” says Jakub Bińkowski, secretary at the Department of Law and Legislation of the Union of Entrepreneurs and Employers. “Amongst these solutions, one can name, for instance, particular zones where trade on Sunday is allowed, the transfer of certain competences in this regard to local governments or extensive subjective exclusions relating, for example, to the store’s area.”

Spanish solutions constitute a series of interesting examples implemented to mitigate the risk arising from restricting trade on Sundays, as they combine all of the above-mentioned mechanisms. The Union of Entrepreneurs and Employers consistently postulates the withdrawal from the Sunday trading ban and replacing it with a Labour Code guarantee of two free Sundays a month for all full-time employees. This way, all sectors of the economy will be able to function normally on all days, while achieving the basic goal of the act on restricting trade on Sunday.

 

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Warsaw, 11^th February 2019

 

50 million inhabitants of Poland. Real actions, not just dreams

 

If Poland is to develop and build its position in Europe of a significant state, it must also be strong in the number of inhabitants. This is the main conclusion of the report of the Union of Entrepreneurs and Employers and the Warsaw Enterpise Institute. The authors wonder if in 30 years, Poland can be inhabited by up to 50 million people. About 11.5 million people more than today and more than 16 million more people than the demographic forecasts assume.

In Poland, for many years now, too few children are being born to ensure replacement of generations. Not only because the following generations are less numerous than the previous ones, but also because an increasing number of people are emigrating from Poland. There are already over 2.5 million Poles living abroad. We live increasingly longer, but there is ever fewer of us. From a young society, 20 years ago, we have become a society of older people.

Since the beginning of this decade, the number of inhabitants of Poland has stopped growing. If within 20-30 years we fail to reverse this trend, Poland has no chance of catching up with the West in terms of prosperity and economic development. According to the forecasts of the Central Statistical Office of Poland, even in case of the most optimistic scenarios of the Family 500+ programme’s impact on demography, the fertility rate in 2050 will amount to 1.85. The social policy that is being carried out may slightly reduce demographic risks, but it will not reverse the trend. The fertility rate must increase to at least 2.1.

In order to significantly increase the number of inhabitants of Poland, it is necessary to change the philosophy of functioning of the whole country. To this end, the Union of Entrepreneurs and Employers together with Warsaw Enterprise Institute propose a comprehensive program of demographic reforms in three points:

1. A reasonable and effective pro-family policy, the aim of which is to promote families in Poland in the 2 + 2 and 2 + 3 models. To achieve this, the following actions are necessary:

• increase in the number of financially accessible nurseries, kindergartens, school and out-of-school dayrooms,
• making labour law more flexible so that more people benefit from part-time work and other flexible forms of employment,
• review of parental and social benefits so that they simultaneously protect families in emergency situations and serve as guarantee for employers that employees have other options than taking advantage of employment to obtain financial benefits,
• creating an effective system of home construction executed by both the local governments and private companies in partnership,
• strengthening the position of local government as an institution that supervises and builds social infrastructure in the regions.

2. Creating conditions conducive to the return of emigrants from abroad, which will be achieved thanks to:

• reducing the tax burden on taxes and quasi-fiscal charges,
• creating an institutional order that ensures economic freedom and the ease of doing business,
• ensuring the possibility of working in accordance with education, with remuneration adequate to qualifications not only in major cities but throughout the country,
• reduction of construction costs by eliminating the bureaucracy in housing construction.

3. Smart absorption of immigrants, above all from countries neighbouring Poland, as a result:

• simplification of procedures related to legal employment of foreigners to the highest possible degree,
• creating conditions for residence of immigrant families in Poland,
• creating a fast track to recognise professional qualifications of immigrants,
• introduction of promotional activities, including promotion of Polish for foreigners and Polish language courses,
• creating a transparent procedure for obtaining permanent residence cards for settlement in our country.

The full and unabridged report is available for download at zpp.net.pl (materials).

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The report was created as part of the “Agenda Poland” project, a joint venture of the Warsaw Enterprise Institute and the Union of Entrepreneurs and Employers, whose aim is to prepare a strategy for Poland’s development, systemic solutions, and improvement of the law in selected areas.

 

So far, the following publications were published in the series:

Strategy of legal and institutional competition of Poland

The Polish Security Strategy

Conceptual of a new tax system in the field of direct and indirect taxes. Wages + Taxes –

Measurable justice. Judicial reform project

School for life. Who will pay for our pensions?

Citizens’ pension. Safe old age, higher wages

The draft Constitution of the Republic of Poland

 

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