Warsaw, 23^rd December 2020

 

APPEAL OF THE UNION OF ENTREPRENEURS AND EMPLOYERS FOR A 12-MONTH-LONG MORATORIUM ON NEW BURDENS

 

• The year 2020 has been the most difficult period for Polish companies in many years. Within a few months there have been three giant blows to businesses: a tight lockdown in March-May, reduced demand in “social sectors” in June-August, finally a second wave of the epidemic that started in September, which resulted in the ongoing re-closure of a significant part of the economy.
  
  
• The ability to adapt to the new conditions and the liquidity aid provided by the government helped entrepreneurs survive the difficult period in the spring. Unfortunately, the following months seriously undermined the stability of some industries, and the second lockdown poses an enormous threat to all companies in Poland.
  
  
• Examples of other OECD member states, such as Australia, Sweden, the Czech Republic or Germany, show that in response to the crisis caused by the coronavirus pandemic, a significant part of governments have decided to cut taxes and reduce administrative burdens.
  
  
• The Australians are pursuing a consistent programme of tax cuts, the Swedes plan to lower PIT and social security premiums, while the Germans and the Czechs have decided to cut VAT. Similar trends (towards lowering burdens) are also visible in the policies of the United States.
  
  
• We regret to observe that Poland has not joined this trend. Instead of striving to reduce the burden and to deregulate, Poland has decided to introduce solutions unfavourable for business. These include, for example, the taxation of limited partnerships with CIT, the introduction of the sugar tax, the amendment to the “rain tax” or the restrictive implementation of the audio-visual directive.
  
  
• Studies show that the willingness of Polish companies to invest has been the lowest in years. According to the “Busometr” survey by the Union of Entrepreneurs and Employers, only 32% of entrepreneurs plan to make any investments in the coming months. On the one hand, this is a result of the uncertainty related to the spread of the epidemic, and on the other – a consequence of the lack of regulatory stability and the introduction of new, unfavourable regulations, mentioned above.
  
  
• Public opinion surveys show that the majority of entrepreneurs (68% according to Kantar Global Business Compass) believe that the effects of the pandemic are severe for enterprises. According to a poll carried out by CBOS at the turn of May and June, every tenth respondent had to limit operations and reduce employment in the company.
  
  
• The impact of the epidemic is also visible in objective economic data – Poland’s seasonally adjusted GDP shrank by 7.9% year-on-year in the 2^nd quarter of 2020. Further reductions in economic activity in the fall and winter will worsen the results for the whole year.
  
  
• We would like to make it clear that the next twelve months constitute the worst possible period to introduce new burdens. Companies are facing the consequences of the epidemic, lowered demand, and the effects of a lockdown – additional taxes, increased levies or the introduction of new administrative obligations can be a fatal blow to many companies.
  
  
• The consequences of introducing additional burdens in such a difficult economic time may be far-reaching and severe. They may concern both the labour market and the investment rate, economic activity, and ultimately – the affluence of the Polish nation. One should remember that bankruptcies of companies or significant drops in their revenues translate into a reduction in employment or a decrease in wages. This, in turn, translates directly into the deterioration of the situation of employees and their families. The lack of new burdens in the difficult time of the epidemic is therefore a postulate not only pro-business, but also pro-employee and pro-social.
  
  
• Bearing in mind all of the above, we urge the government to adopt a 12-month-long moratorium on all new burdens, including, in particular, those of a tax and para-tax nature, such as the sugar tax or the retail sales tax. Polish businesses must have a chance to survive and recover after the crisis caused by the epidemic. Should the new burdens make it impossible, the scale of the negative impact on the economy may be difficult to predict, and the cost of these burdens will certainly be higher than that caused by the postponement of new levies.

 

See: 23.12.2020 Appel of the Union of Entrepreneurs and Employers for a 12-month-long moratorium on new burdens

 

Fot. Proxima Studio / Adobe Stock

Warsaw, 23^rd December2020

 

The Union of Entrepreneurs and Employers demands the economy to be unlocked

 

The Union of Entrepreneurs and Employers is critical of the introduction of the next stage of shutting down the economy. The Union calls for actions aimed at the unlocking of all closed sectors, the implementation of educational activities aimed at citizens and entrepreneurs, as well as the enforcement of the sanitary regime in the DDM standard and epidemic guidelines for all industries.

We have observed that the solutions to be introduced [by means of the Regulation of the Council of Ministers on the establishment of certain restrictions, orders and bans in connection with the epidemic, draft act of 21^st December 2020 (RD275)] constitute the next stage of a creeping lockdown of the economy.

The fourth quarter of the epidemic has begun. There is no indication that the number of new cases as well as the burden on the healthcare system will be reduced on a weekly basis as a result of vaccination. We must adapt our actions to the situation in which the coronavirus will be a significant phenomenon from the point of view of state management in the months to come. Unfortunately, the answer to this problem must not be to close subsequent sectors of the economy with relative passivity in the remaining scope. The lockdown of the economy must not be the main instrument in the fight against the coronavirus. We must not at this point refer to the practices of the so-called West, where the capital generated over the past decades is and will be the “safety cushion” for developed economies. We must have the courage to face the facts. After a year of empirical experience on a global scale, there is no clear evidence that lockdowns are an effective instrument to fight the epidemic. They usually impact the state of affairs, but that impact is not a decisive factor. Essential in this case are the following: models of social interaction and behaviour, compliance with sanitary standards (distance, disinfection, mask), a society’s demographic structure, and cohesive communication from those responsible for crisis management.

The Union of Entrepreneurs and Employers draws attention to the inconsistency of government actions in the field of communication, transparency, and predictability of decisions. While we have full understanding of the dynamically changing epidemic situation and preventive actions, we are extremely critical of the inconsistency of the decisions made with planned decisions presented earlier. The government announced on 4^th November 2020 that when the average of seven days of illness exceeded 27,000 new cases on a national scale, a national quarantine would be implemented, including restrictions on movement. There is also a graphic showing clearly the thresholds of the safety regulations. We assessed positively the presented “road map”, recognising that it generated the basic predictability of decisions to be taken. However, a few weeks later, the so-called national quarantine was in fact introduced, while the level of cases over that last 7 days prior to the announcement suggested rather lifting the restrictions in line with the previously communicated strategy. We are concerned that the inconsistency between decisions taken and those communicated may diminish the government’s credibility in terms of anti-epidemic activities. This is particularly important in the period when one of the key short-term policy goals should be, amongst other, to persuade as many people as possible to get vaccinated.

Regardless of the above, we negatively evaluate the introduction of lockdowns in subsequent industries. The closure of shopping malls, swimming pools, aquaparks, gyms, clubs and fitness centres, entertainment and recreational activities or ski slopes will have a measurable impact on the economic and social situation of thousands of Poles, and consequently the economic recession in the coming quarters. Furthermore, the total lockdown of hotels will not only affect this industry itself, but also hamper operations of all industries that require business travel – the production sector in particular. While we understand the concerns related to a possible third wave of the epidemic, as well as those regarding the reports of new mutations of the virus, we consistently point to the lack of proper, evidence-based justifications for introducing restrictions in other industries. Therefore, it is difficult to understand both the sectoral scope of the proposed restrictions and their details (for example, the key to selecting the types of shops that can be open in shopping centres remains a mystery; or the shutdown of “retail islands” in shopping centres located in open spaces such as passageways). The procedure for announcing the latest regulation also deserves criticism – although it appeared in advance, it was not decided to subject its content to consultation with representative organisations.

We would like to draw your attention once again to the critical situation in the food catering industry, which was significantly affected by the lockdown in the spring. Currently, it has been closed for months, with no prospects of a change in their situation. The government also has not presented any future aid plan not only for this industry, but also for other closed ones after the lifting of the restrictions. We consistently call for the introduction of a uniform VAT rate of 5% for the entire food catering industry and for the introduction of similar discounts for other sectors whose operations are now limited. Such solutions would be a real help at the stage of unlocking the economy and would constitute a beneficial solution that the government could introduce for businesses after the epidemic.

At the same time, the Union of Entrepreneurs and Employers once again calls for the introduction of solutions in the field of e-commerce to compensate for the lack or limitation of sales in traditional channels. This would enable consumers to purchase certain products without having to physically go to stores, which is of considerable importance taking into account the epidemic. In this context, it would be reasonable, for example, to allow remote sales of those categories of goods which at the moment cannot legally be sold this way. In particular, it concerns low-percentage alcohol (wine, beer, ciders), prescription drugs or tobacco products, as well as novelty and electronic cigarettes. These solutions seem to be justified in the context of the introduced restrictions in movement, as well as the goal of limiting the mobility of citizens, assumed by the government. So far, however, only restrictive solutions have been set to achieve this goal.

To sum up, in our appeals to date, the Union of Entrepreneurs and Employers has emphasised the lack of predictability in the actions undertaken by the legislators and regulatory uncertainty. They are particularly pronounced during the ongoing crisis, and the actions announced in recent days are a clear example of this. This will result in limiting the risk of making business decisions (including investments). A 12-month-long moratorium on any new burdens for workers and entrepreneurs is necessary. We also call for a direction to be determined in terms of comprehensive law simplification and deregulation. These and other necessary actions were presented by the Union of Entrepreneurs and Employers in the Union’s postulate as part of the planned social pact on 17^th November 2020.

The introduction of further restrictions will be less and less effective. The law must not be on a collision course with economic practices, reality, and society’s expectations. Such a strategy of fighting the epidemic already causes growing resistance amongst citizens and entrepreneurs. Presently, Poles are learning anew, just like under the socialist regime, how to circumvent laws that are too rigorous and do not correspond to reality.

 

See: 23.12.2020 The Union of Entrepreneurs and Employers demands the economy to be unlocked

 

Fot. Corona Borealis / Adobe Stock

Warsaw, 16^th December 2020

 

Pursuit of technology sovereignty or new protectionism? Discussion on the new direction of European policy-making with particular emphasis on the Digital Services Act

 

On Tuesday, 15^th December 2020, the European Commission’s legislative proposal on the Digital Services Act (hereinafter referred to as “DSA”) was published. Public consultations conducted by the European Commission concerning the shape of future regulations, in which the Union of Entrepreneurs and Employers took part, ended on 9^th September. Moreover, the European Enterprise Alliance and SME Connect also presented their opinions in this respect.

The event devoted to discussing the technological sovereignty of Europe and DSA was attended by Marianna Sidoroff, Deputy Director of the Digital Economy Department at the Ministry of Development, Labour and Technology, who delivered a keynote speech, and Fredrik Erixon, Director of the European Centre for International Political Economy, who presented the report entitled “Europe’s Quest for Technology Sovereignty”. Furthermore, the panel discussion was attended by Horst Heitz, Chair of the Steering Committee at SME Connect, Tomasz Snażyk, President of the Startup Poland Foundation, and Michał Kanownik, President of the Management Board of the Association of Importers and Producers of Electrical and Electronic Equipment – ZIPSEE “Digital Poland”.

The Digital Services Act aims to regulate the provision of digital services and to create a level playing field for EU companies. Nonetheless, the new EU regulation also has specific consequences for SMEs, especially those in Central and Eastern Europe.

“In our contribution to the consultations, we called for respect for the fundamental principles of the digital single market, such as the home state regulation, known as the country of origin principle. Entrepreneurs need a clear and concise regulatory framework that will not undermine technological development. This applies in particular to companies from the SME sector, whose development is supported by digital platforms,” says Marcin Nowacki, Vice President of the Union of Entrepreneurs and Employers.

It is essential to respect the country of origin principle. In line with its ideals, companies may provide digital services in other member states under the laws of their home country, that is, their country of origin. This rule is especially important for enterprises from the SME sector and from the Central and Eastern European region, as it mitigates the fear of applying foreign law in the event of litigation.

“The COVID-19 pandemic has accelerated the digital transformation of our society at an unprecedented pace. The digital infrastructure has turned out to be fundamental for our society,” says Marianna Sidoroff, Deputy Director of the Electronic Economy Department at the Ministry of Development, Labour and Technology, and adds: “The concept of technology sovereignty combines economic strategy with values. We strive to protect the fundamental values of the European Union, while allowing the development of companies in the single market.”

Recently, we have witnessed legislative progress in the field of online content supervision in several member states. Unfortunately, this has also led to discrepancies between national and sometimes even regional and local regulations. Such legal fragmentation hinders the free movement of services and, as a result, the functioning of the single market. Effective regulation in this regard should minimise fragmentation at the national level as well as take into account existing legislation when identifying needs in the context of a sectoral or horizontal approach.

Moreover, the introduction of the ex ante regulation seems very problematic. Internet platforms play a particularly important role in the development of companies from the SME sector. Thanks to them, small and medium-sized companies gained the opportunity to enter the market, expand and develop their operations beyond domestic markets, which had previously been impossible. These facts show that the introduction of a demanding ex ante regulation may have a negative impact on companies from the SME sector, and as a result, might reduce the assortment and offer available to consumers. Therefore, the Union of Entrepreneurs and Employers believes that the proposed regulations should be based on the currently enforced and legally binding regulations, such as the P2B Regulation.

 

Fot. François Genon / Unspalsh.com

Warsaw, 11^th December 2020

 

Protectionism within the European Union and how to counteract it?

 

On 11^th December 2020, the Union of Entrepreneurs and Employers organised a debate titled “Protectionism within the European Union and how to fight it?” with the participation of Aleksandra Frelek-Dębecka, Director of the European Affairs Department at the Ministry of Development, Labour and Technology, Agnieszka Dawidonis-Twardo, from the European Law Department at the Ministry of Development, Labour and Technology, Andrzej Gantner, Director General of the Polish Federation of Food Producers, Marcin Nowacki, Vice-President of the Union of Entrepreneurs and Employers, and Kamila Sotomska, Analyst at the Law and Legislation Department of the Union of Entrepreneurs and Employers. The debate was moderated by Jakub Bińkowski, Director of the Law and Legislation Department of the Union of Entrepreneurs and Employers.

The single market is one of the European Union’s greatest achievements to date. Nonetheless, protectionism remains a major problem affecting most entrepreneurs and hampering the development of the single market. Eliminating existing barriers could attract an additional EUR 17 billion in investment annually and generate a further 1.3 million jobs, which are key to restoring the competitiveness of the European economy after the pandemic. In a new report, the Union of Entrepreneurs and Employers looks at the problem of protectionism comprehensively and analyses it from a historical, economic, legal, practical and political perspective. During the debate, the panellists presented a number of ways in which to fight protectionism.

“Research conducted with the participation of over 1,150 entrepreneurs from Poland, the Czech Republic and Slovakia showed that almost 40% of the companies surveyed encountered protectionist practices within the European Union, either in person or through their business partners,” said Marcin Nowacki, Vice-President of the Union of Entrepreneurs and Employers.

Independently conducted studies by the Union of Entrepreneurs and Employers and the European Commission show that administrative practices (e.g. the requirement to submit additional certificates) are the protectionist measures used most frequently. While most can be tackled with a wide range of bans established under EU law, the current legal framework does not appear sufficient to deal with all the problems of the single market.

“Among the most common protectionist practices, Polish exporters name: the use of official food control of a given country to depreciate consumer confidence, sanitary controls with increased frequency in relation to products from Poland, the need for long-term storage of documents, requirements for additional certificates or transport documents, short validity dates of permits or mandatory placement of specific text or markings on packaging. There are also frequent impositions of quality requirements that do not result from EU regulations. An example of such an action is the use of unclear criteria when evaluating products, e.g. a Czech criterion might be described as of insufficient quality,” added Andrzej Gantner, Director General of the Polish Federation of Food Producers.

„EU law offers a wide range of tools to combat protectionist practices by prohibiting the use of import and export duties or charges having equivalent effect, discriminatory taxation on products from other member states, quantitative restrictions and measures having an effect equivalent to quantitative restrictions on imports and exports. Nevertheless, the legal framework in force seems insufficient to address all the problems of the common market for several reasons,” noted Kamila Sotomska, Analyst at the Law and Legislation Department of the Union of Entrepreneurs and Employers.

“The problem of protectionism within the single market is urgent and the crisis caused by the pandemic has only made it worse. There is a growing awareness of the problem among politicians, officials, and entrepreneurs as recognition of the benefits of the single market is growing too and there is still much to be done. Information from the entrepreneurs themselves is very important – and we constantly appeal for feedback! – it provides us with knowledge and arguments, and then we can explain and try to solve these problems – directly with the European Commission and / or bilaterally with other member states. We encourage you to submit applications to the following address: sekretariatDSE@mrpit.gov.pl or to contact the SOLVIT Polska Centre, which acts as an intermediary in solving specific problems such as disputes with the public administration of another member state on issues regulated by EU regulations (https://www.gov.pl/web/rozwoj-praca-technologia/solvit),” emphasised Aleksandra Frelek-Dębecka, Director of the European Affairs Department at the Ministry of Development, Labour and Technology.

 

See: 11.12.2020 Report by the Union of Entrepreneurs and Employers: Protectionism within the European Union and how to counteract it?

 

fot. Giampaolo Squarcina / ma lic. Flickr.com

Warsaw, 11^th December 2020

 

Opinion of the Chief Healthcare Expert of the Union of Entrepreneurs and Employers on the National Vaccination Programme

 

The fight against the epidemic is entering its decisive phase.

On 8^th December 2020 at 7:00 am GMT, the first person in Europe was vaccinated against the effects of the disease caused by SARS-CoV-2. At the same time, a document was published in Poland called the National Vaccination Programme against COVID-19.

It is beyond dispute that the scale of the planned vaccination programme exceeds any previous preventive measures undertaken within the Polish healthcare system.

The more so it is to be appreciated that such a document has been drawn up reliably referring to all the necessary areas that require clarification in this situation.

A team of experts and advisers made a considerable effort to describe the context and assumptions of the entire programme. Assuming that vaccination coverage in Poland should amount to at least 50% of the adult population, i.e. more than 15 million people, it is crucial that the logistics is handled in a way that is not only safest for patients and staff, but – above all else – operationally efficient.

The medical service providers industry calls for special attention to be given to practical solutions that can improve the effectiveness of the programme:

1. Separate from stationary contracting of home vaccinations, which means creating specialised units. The specific nature of home visits requires the organisation of a visiting doctor-and-nurse team, equipped with infrastructure for transporting the vaccine at specific temperatures, and above all, logistical planning;
2. Allowing nurses to mass vaccinate people against COVID-19 without having completed a specialist course on preventive vaccinations, performing their activities under the supervision of a physician;
3. The active promotion of the proposed system of vaccination-incentives related to the creation of an Individual Epidemic Passport, which would also include information on test results, should be a key tool supported by means of social campaigns and resuming access to specific services.

The implementation of the above-mentioned postulates should effectively improve the work of physicians within Primary Healthcare (Podstawowa Opieka Zdrowotna) and ensure an adequate personal infrastructure in the event of medical personnel shortages.

Agnieszka Szpara
Chief Healthcare Expert of the Union of Entrepreneurs and Employers

 

See: 11.12.2020 Opinion of the Chief Healthcare Expert of the Union of Entrepreneurs and Employers on the National Vaccination Programme

 

Fot. TheDigitalArtist / pixabay.com