Warsaw, 12^th May 2020

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON
‘A NEW INDUSTRIAL STRATEGY FOR EUROPE’

The Union of Entrepreneurs and Employers hereby presents its opinion to the Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions titled ‘A New Industrial Strategy for Europe’.

We would like to point out that industry in Europe has been a global leader in economic transformation for centuries. The issues of the modern world, the changing geopolitical conditions, and recently, above all, the ongoing coronavirus epidemic along with the upcoming economic and social changes associated with it constitute the background for the challenges that industry in the European Union must soon face.

The so-called ‘second sector’ accounts for 20% of the EU economy, employs around 35 million people and generates many additional millions of jobs within the Union and beyond. However, its role in the case of Poland is significantly greater. It constitutes about 40% of our domestic economy, and it is here where almost every third Pole finds employment. Henceforth, the provisions in the proposed industrial strategy for the EU are crucial to the further development of our country, even more so in the upcoming recession.

We concur that “We now need a new industrial way for Europe, fit for the ambitions of today and the realities of tomorrow”. The road to achieve this goal must not, however, translate into industry’s further regulation, such as imposing new legal requirements, restrictions, fees or taxes for the second sector. For centuries, it has been the unhindered opportunity to conduct industrial activity that constituted the basis for innovation and fostering change on a global scale by European industrial plants. Sole legislation itself has never led any country to fortune and wealth.

While in the provisions of ‘A New Industrial Strategy for Europe’, it is written: “We need a European industrial policy based on competition, open markets, world-leading research and technologies and a strong single market which brings down barriers and cuts red tape. And we must resist the simplistic temptations that come with protectionism or market distortions (…)”, many of the further provisions raise concerns about the planned shape of industrial policy through numerous legal regulations determined at a European level.

The issue of social standards also found its place in the document. The European Commission notes that “Thanks to Europe’s social market economy, economic growth goes hand-in-hand with improved social and living standards and good working conditions. The European Pillar of Social Rights will continue to be our compass and ensure the twin transitions are socially fair”. However, these issues must not mean that, with the help of subjective solutions, justified by social arguments, entrepreneurs from selected EU member states are eliminated from the common market. Such practice was introduced during the works on the Mobility Package in recent years.

The Commission also stresses that “Faced with these headwinds, Europe’s response cannot be to erect more barriers, shield uncompetitive industries”. However, the notion of ‘an uncompetitive industry’ must not be attributed to those sectors that have lost their competitiveness due to the introduction of administrative fees, taxes or regulatory requirements that result from international agreements or European law.

‘A New Industrial Strategy for Europe’ focuses largely on two sectors: energy and the digital industry.

The experts of the Union of Entrepreneurs and Employers have begun working with the Polish industry to develop the Polish Energy Strategy, which is currently undergoing an update process. We are aware that there will be a reversal of the roles of individual generation sources and takeover of main work by distributed sources, while conventional energy from coal should in Poland gradually take over the role of a guarantor of electricity supply. Any and all changes in this matter, however, ought to be spread over a substantially long period to allow Polish industry to adapt to new norms and standards. The Just Transition Fund may be an interesting tool to support the Polish energy transformation, but it certainly will not be the primary source of its financing. Poland will still have to use other sources of financial aid from the EU and will also have to mobilise significant resources on its own. This issue had already been the subject of a commentary by the Union on 28^th January 2020.

We are already following all attempts to introduce norms in the field of renewable energy, aiming to properly regulate the issues related to the investment process, for instance, in onshore wind farms, with both attention and approval.

Digital technology issues have found an exceptionally important place in the industrial strategy. We agree that this area plays and will play an extraordinary role during the crisis associated with the COVID-19 epidemic, as well as in many years to come. It may also become one of the pillars of economic recovery after the crisis caused by the coronavirus pandemic.

Furthermore, the policies of individual member states and the European Commission should therefore be primarily designed to guarantee entrepreneurs a stable and predictable regulatory environment and a level playing field for all participants of the digital ecosystem. Likewise, the highest possible allocation of funds for digital development within the nearest EU financial perspective seems to be a top priority.

What raises our concerns are the emerging voices regarding the introduction of the so-called digital tax. The Union of Entrepreneurs and Employers has consistently pointed out that digital services boost the competitiveness of the SME sector due to digitisation, and thus, among other things, increased working efficiency and widened access to new markets. The unilateral imposition of a digital tax on European companies, in the absence of such a tax in other parts of the world, will negatively impact the competitiveness of Polish and European companies against entrepreneurs from outside the European Union, for example, from the US, China or India.

European industry has to be innovative to be competitive. To meet this condition, it must have access to the most modern telecommunications infrastructure possible. Therefore, it is vital to implement the 5G standard quickly and efficiently so that our continent does not lag behind. The current situation forced by the COVID-19 epidemic shows the importance of digitising both the economy and solutions for citizens, including health care, education and digital offices. The availability of infrastructure for the purposes of industry must therefore go hand in hand with a set of online public services.

We would also wish to highlight the fact that intellectual property action plans stipulating an assessment of the need to update the legal framework, ensuring intelligent use of intellectual property and a more effective fight against intellectual property theft, must not pose a threat to competitiveness resulting in the exclusion of innovative business models and the reduction of opportunities for European SMEs to compete globally. Further regulations for European entities will not improve their competitiveness.

The magnitude of changes that may take place as a consequence of the forthcoming economic crisis might shift the prospect of implementation and revise their significance in case of numerous provisions postulated in ‘A New Industrial Strategy for Europe’. Hence, they should be analysed carefully and thoroughly by social partners and public institutions.

Union of Entrepreneurs and Employers

 

12.05.2020 Position of the Union of Entrepreneurs and Employers on ‘A New Industrial Strategy for Europe’

 

fot. Giampaolo Squarcina / ma lic. Flickr.com

Warsaw, 20^th May 2020

THE PANDEMIC AS AN OPPORTUNITY FOR WIDESPREAD AND FAST INTERNET IN POLAND

The fundamental conclusions from the report published today by the Union of Entrepreneurs and Employers are that, in order to develop the Internet infrastructure in Poland, we need stable regulations, a level playing field for all ecosystem participants, further flexibility of environmental and construction regulations, as well as financial stimuli encouraging investment in infrastructure.

The coronavirus pandemic has affected virtually all sectors of the economy and has already generated a number of contradictory diagnoses. One thing can be said for sure: it has sparked a dynamic increase in network traffic. In mere weeks, the vast majority of aspects of the functioning of many people has been transferred to the virtual world. Economic and social life never stopped, as Internet managed to multiply its traffic capabilities by several dozen percent. As part of the changes caused by the epidemic will be of a permanent character, the bandwidth of the mobile infrastructure is slowly becoming insufficient, similarly to the level of penetration of high-speed optical fibre in our country.

“We must consider this situation an opportunity, not at all a threat, and create the best Internet infrastructure in Europe, which will then become our competitive advantage. The pandemic showed us that without the Internet, the economy actually has no future,” says Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “This predicament has a number of consequences. Unless we have a sufficiently efficient telecommunications infrastructure, we will be developing at a much slower pace than our potential would suggest. Unless the coverage of the country’s surface with this infrastructure is satisfactory, many people will become vulnerable to exclusion. Therefore, our basic postulate is as follows: let’s do our level best to provide Poles with a universal access to high-speed Internet.”

Our starting point for further infrastructure development is rather specific. On the one hand, we passed the exam related to the increase in network traffic with flying colours; on the other, in the ESMI ranking which analyses the society’s level of digitisation, Poland is systematically placed on one of the last slots in Europe. Access to fibre optic connections is improving, but is still deficient, while the record number of subscribers to mobile broadband services is depleting the capacity of existing infrastructure. Furthermore, Poland must efficiently implement the new mobile network standard, that is 5G, which will require additional infrastructure expenditure. Consequently, the Union’s experts prepared a set of recommendations for the development of the telecommunications infrastructure in Poland.

“We presented a number of recommendations specific to the telecommunications infrastructure in our report, but as to their essence, they do not differ from general recommendations for stimulating investment,” claims Jakub Bińkowski, Director of the Union’s Department of Law and Legislation. “Therefore, they basically boil down to securing competitiveness within the market, ensuring basic predictability of regulations, simplifying and making procedures more flexible, as well as making a financial effort as an impulse for new investments.”

The experts of the Union of Entrepreneurs and Employers emphasise that in recent years a number of activities to develop the Polish infrastructure has already been undertaken, for instance, as part of the “mega-act” or from mobilising funds from the Operational Program “Polska Cyfrowa”, which stands for ‘Digital Poland’. Nevertheless from the point of view of the scale of the challenge facing Poland, additional efforts are necessary.

“We were the first to call for the exemption of the SME sector from Social Insurance Institution premiums, we were also the first to demand liquidity substitution for Polish companies and later to restart economic activity. Now we are the first to call for reconstruction of the economy and taking advantage of the crisis as an opportunity to make a civilisation leap,” concluded Cezary Kaźmierczak. “The Internet is a key instrument in this respect.”

The Union of Entrepreneurs and Employers announced that in the foreseeable future, the organisation will publish a report on how to utilise the infrastructure at hand in both the public and private sectors.

The project was prepared by the following Consortium:

• Andrzej Arendarski, Polish Chamber of Commerce (Krajowa Izba Gospodarcza)
• Maciej Bukowski, WISE Europa Institute
• Cezary Kaźmierczak, Union of Entrepreneurs and Employers (Związek Przedsiębiorców i Pracodawców)
• Agnieszka Plencler, Consumers Forum Foundation (Fundacja Forum Konsumentów)
• Bartłomiej Radziejewski, New Confederation (Nowa Konfederacja)
• Marcin Roszkowski, Jagiellonian Institute (Instytut Jagielloński)
• Marzena Rudnicka, National Institute of Senior Economy (Krajowy Instytut Gospodarki Senioralnej)
• Andrzej Sadowski, Adam Smith Research Center (Centrum im. Adama Smitha)
• Tomasz Wróblewski, Warsaw Enterprise Institute

 

20.05.2020 The post-Covid-19 crisis Economic Recovery Plan: 2^nd Pillar – Unrestricted access to high-speed Internet (Infrastructure)

Warsaw, 14^th May 2020

COMMENTARY OF THE UNION OF ENTREPRENEURS AND EMPLOYERS
REGARDING PLASTIC TAX PROPOSALS

The Union of Entrepreneurs and Employers has consistently opposed the introduction of any levies of sectoral and selective character. We believe that the one of the characteristics of the tax system should be it being universal, as it makes tax collection much easier, it is executed on a more efficient basis and it is cheaper to collect on a uniform ground from a large group of entities rather than from many groups of entities according to different rules. With this in mind, we evaluate negatively all kinds of proposals aimed at introducing a tax on plastic products, especially if it should take place during a difficult crisis due to the ongoing pandemic.

According to the information broadcast and published yesterday by the media, a proposal to supplement the provisions of the next “anti-crisis shield” with a new tax on plastic products in which the content of recycled plastic is less than 30% had been introduced in the public debate. The position of the Union of Entrepreneurs and Employers in this regard is clear. There can be no doubt that Poland must shape its own model for adapting to the Green New Deal, which is becoming one of the major policies pursued by the European Union. Achieving higher recycling levels and reducing waste disposal levels is a must. However, we believe that Poland’s path to a circular economy must not be based on fiscal tools. The fundamental condition for implementing the assumptions determined at the level of the European Union is the construction of an efficient and well-functioning waste management system, taking into account the extended responsibility of the producer.

Our position in this matter is unwavering, as the entire Polish economy is currently going through a very difficult period. The coronavirus pandemic indeed forced many industries to cease operations, while in case of others, it has resulted in a decline in revenues and disruption of supply chains. Any and all legislative interventions aimed at relieving entrepreneurs at this time ought to be appreciated; however, proposals that seek to improve the operating conditions of entrepreneurs in a given industry at the expense of other market participants are unacceptable. The legislator’s efforts during this period should focus on deregulation, simplifying procedures and minimising bureaucratic and administrative obligations. We believe that the introduction of additional taxes in a time of crisis is unjustified and harmful, especially if it were to be done as part of a package of laws whose declared objective is to protect businesses against the negative effects of the COVID-19 epidemic.

The Green New Deal speaks of a reality to which the Polish economy will have to adapt. Obviously, this will require effort on the part of both the regulator and market participants. The first-order goal at the moment should be the creation of an efficient and effective waste management system along with the implementation of a model of extended producer’s responsibility in line with the requirements laid down in EU directives. All types of levies imposed selectively on specific products or industries lead to an increase in the level of complexity of the tax system. Moreover, taxes should, in principle, fulfil a fiscal function, that is provide funds for the execution of the state’s basic tasks; attempts to achieve other goals by means of the tools within the tax system lead to disturbances in the economy and are usually of low efficiency. Therefore, we clearly oppose the proposals to introduce “a plastic tax” – we evaluate negatively both the concept itself and the idea of its introduction in such extraordinary conditions.

14.05.2020 Commentary of the Union of Entrepreneurs and Employers regarding plastic tax proposals

Warsaw, 5^th May 2020

Union presents the post-Covid-19 crisis Economic Recovery Plan

The Union of Entrepreneurs and Employers commences a series of publications called “The post-Covid-19 crisis Economic Recovery Plan”. In the coming weeks, the Union will present a programme of thorough reforms of economic law, tax system, pension system, judiciary, labour market, ensuring universal Internet access and a plan to tackle demographic problems.

In the 1^st pillar published today, the Union’s experts presented quick-win point solutions, the implementation of which will quickly improve the legal environment for companies in Poland. The 16 point recommendations by the Union include recommendations on ensuring stability and predictability of the law, an appeal to put on hold the plans for raising the minimum wage, a withdrawal from changes in non-interest consumer credit costs, the widespread implementation of cash accounting, limiting the use of sectoral taxes, repealing the law on trade restrictions on Sundays, increasing the tax exempt amount, shortening the time for issuing administrative decisions, enabling distance sales of prescription drugs or providing access to public databases, and further development of state administration digitalisation.

“The quick-win solutions presented in the 1^st pillar, unlike the subsequent chapters planned, are of a technical nature. They do not require any thorough system reforms. The implementation of the presented solutions is also non-critical in terms of public debate. Their implementation is a quick win for all stakeholders,” says Piotr Palutkiewicz, Secretary of the Union’s Department of Law and Legislation.

Cezary Kaźmierczak, the President of the Union, comments: “The current crisis will probably find its place in history textbooks. The most important thing is that these times are referred to as a breakthrough period, after which our country advanced to higher places in rankings that assess the standard of living, economic development, personal freedom or internal and external security. Every effort should be undertaken to ensure that 2020 is not recorded as the point at which the 30-year-long period of Poland’s reconstruction came to a halt. Therefore, this time should be used to carry out thorough reforms in numerous areas”.

In its report, the Union states that in the face of the ongoing economic crisis related to the COVID-19 epidemic, it is also necessary to “unfreeze” as soon as possible all the sectors of the economy whose operations were restricted by the government’s administrative decisions.

“There is no doubt that having lifted most current restrictions, the economy, society, and politics will start functioning in theirs new reality. We will be witnessing economic changes, the birth of new models of functioning in society and culture, as well as novel use of technology. We will perceive health or ecological issues in a different light,” the Union’s experts write in the report. “The global coronavirus crisis is and will be a time of reviewing the current models and patterns of functioning of each area of life that we have known so far”.

“That is why the government must start implementing bold reforms that will adapt the law to the new economic and social realities. In the weeks to come, we will be presenting our solutions .” – sums up Cezary Kaźmierczak.

05.05.2020 The post-Covid-19 crisis Economic Recovery Plan: 1^st Pillar – Point Solutions – quick win

 

Fot. geralt / pixabay.com