Warsaw, 7^th June 2021

 

The Polish “New Deal” should make the country’s tax system more attractive;
CIT Payers Forum on fiscal policy in Poland

 

How can the Polish economy compete with European tax havens? What should the Polish tax system look like to become a magnet attracting new companies? What fiscal instruments can help the Ministry of Finance effectively enforce corporate tax obligations? These are just some of the questions answered by the participants of the “CIT Payers Forum” organised by the Union of Entrepreneurs and Employers and attended by representatives of the Ministry of Finance, largest CIT payers in major industries, as well as experts on economy and taxes.

Ministry of Finance: good regulations do not exist without dialogue with business

The Ministry of Finance has for ages openly been admitting that it is not possible to shape tax regulations without having a dialogue with the market, the world of business, and the consultancy industry. During the “CIT Payers Forum” (“Forum Płatników CIT”), representatives of the Ministry assured they would further pursue the policy of a close dialogue with business, seeing it as an opportunity to draw on the experience of companies in the area of legislation.

“The views of entrepreneurs are like a compass allowing us to navigate perilous reefs during the journey the Polish economy is on following the changing pandemic reality. The fact that it relatively well survived three subsequent waves of the epidemic and three lockdowns is the result of the short distance between business and the economic regulator and tax authorities. It is the result of constant mutual trust building and co-created solutions, the result of us talking. Now is the time we should plan scenarios for the reboot of the Polish economy. I strongly believe that in the second half of the year we will see a rebound that will mark the beginning of post-pandemic recovery. We want to implement a number of tax projects aimed at supporting Polish business, for example through pro-investment reliefs which would be available to companies as early as January next year,” said Jan Sarnowski, Undersecretary of State at the Ministry of Finance.

The Ministry of Finance emphasises that without such cooperation it would not be possible to implement the financial shield or introduce tax amendments favourable for entrepreneurs. Within the latter group, the Ministry names, among others, the extension of the scope of application of the 9% CIT rate or changes in the area of lump sum on recorded revenues by increasing 8-fold the income limit entitling to take advantage of this solution.

Representatives of the Ministry also assure that further legislative solutions aimed at strengthening and rebuilding entrepreneurship in Poland are waiting to be implemented this year. The assumptions of the “New Deal” provide, i.a. over a dozen tax breaks, including those for robotisation and production automation, encouraging Polish workers to return to the country or stimulating employment growth in various sectors of the economy. They also include the second SLIM VAT 2 simplification package, as well as provisions encouraging companies to continue investing in Poland, which would allow them to responsibly plan such investments for years to come.

In the third quarter of 2020, the Ministry of Finance will also start implementing the EU e-commerce package, that is, facilitating online trade with other European countries. In the fourth quarter, the national e-invoice system is to be implemented.

Tightening CIT collection as a priority of fiscal policy

Participants of the “CIT Payers Forum” devoted a lot of time to the discussion about the role of the corporate income tax in generating budget revenues. The Ministry of Finance recalled that measures to tighten the CIT collection system had brought considerable growth results in recent years.

“Recent years have been a period of substantial success in increasing CIT revenues. While in 2014-2015, income from CIT amounted to PLN 30-odd billion, in 2019 it was already at the level of PLN 50 billion. The revenues also increased in relation to the GDP. According to the estimates of the Polish Economic Institute (PEI), the closure of the so-called “CIT gaps” contributed to this effect. According to PEI, this CIT gap decreased by 1% GDP in the years 2014-1018. However, we are still below the EU average, which in 2019 equalled 6%. Poland ranks around 5.5% in relation to the income of the entire public finance sector. According to PEI, the CIT gap in Poland decreased from 2% GDP in 2014 to 1% GDP in 2018, that is up to PLN 20-odd billion. Certainly, we would have managed to obtain a dozen or so additional billion zloty if we had better tightened the system in terms of the CIT gap,” argued Łukasz Czernicki, Chief Economist at the Ministry of Finance.

Maciej Żukowski, tax advisor and former Director of the Income Tax Department at the Ministry of Finance, clarified which tightening measures were, in his opinion, discussed.

“Certainly, the amendments to the CIT had a direct impact on its collection. Highly specific regulations, regulations tightening the system or introducing BEPS (base erosion and profit shifting) and ATAD (the Anti-Tax Avoidance Directive) as well as those regarding transfer pricing contributed to this. It seems to me that the increase in CIT revenues is not influenced by the MDRs (mandatory disclosure regimes), because they are compliance regulations to a higher degree rather than a tightening measures, but in a sense they “crown” the whole idea for an income tax reform. In particular, the provisions on the separation of capital gains from operating profits improved CIT collection in 2018-2019, as 2020 is not a representative year to draw conclusions from. At least 12% from PLN 50 billion from CIT could still be received from taxpayers without raising taxes,” noticed Maciej Żukowski.

Andrzej Sadowski, President of the Adam Smith Centre, compared CIT to a fee paid by businesses for access to the Polish market.

“The disproportionate collection of CIT is noticeable. CIT, like the RTV subscription, is a “voluntary” tax. In both cases, we see an almost 50% share of non-payers. Can the Polish state, for providing access to its territory, the market, consumers, and infrastructure, afford what no office tenant would allow to happen? Companies pay their landlords every month, whereas they do not pay for the services of the Polish state,” said Andrzej Sadowski, economist, President of the Adam Smith Centre.

In the public debate, CIT itself is often considered in terms of economic patriotism. Meanwhile, in the opinion of the largest payers of this tax in Poland, its essence lies elsewhere.

“We do business in Poland and the prosperity of our country affects the prosperity of our company. According to the data published by the Ministry of Finance, Philip Morris has paid over PLN 1.2 billion in CIT since 2012,” said Wojciech Niewierko, Member of the Management Board for External Relations at Philip Morris for Poland and the Baltic States.

Representatives of the banking sector, on the other hand, raised the need for greater predictability and transparency of the legal and fiscal environment, including further strengthening of cooperation between entrepreneurs and the government. They also emphasised that the banking sector remains one of the largest CIT payers in the country.

“Banks dominate the list of the largest CIT payers. We would like to draw attention to the fact that our regulatory operating costs, such as contributions to the Bank Guarantee Fund and the borrower support fund or the bank tax, do not constitute tax deductible costs. Minister Sarnowski used the word “simplification” numerous times to mention planned initiatives in the area of taxes. As a sector, we are pleased with the announcement of such simplifications, but we can see that in practice, due to insufficient consultations with business, initiatives aimed at simplification rather cause difficulties,” said Łukasz Szczygieł, Director of the Tax Department at ING Bank Śląski.

Representatives of the fuel sector stressed the need for further simplification of the tax system and consistent removal of its irregularities. In their opinion, the complexity of some tax regulations may create a barrier for some companies willing to pay taxes diligently.

“The complexity of tax law means that some payers are unable to properly fulfil their obligations. And there is an increasing number of obligations to be taken care of. Many of them have a positive effect, but especially the smaller entities may not keep up with them. On the other hand, in large corporations, the complexity of business operations is a problem. A correct implementation of solutions in such large organisations requires a lot of preparation. This brings us to the conclusion that the law should be prepared well in advance. At the end of the day, we would all expect those who pay taxes correctly to be efficiently and effectively verified by the authorities. This brings us to the postulate of removing complexity in tax law. The institution in charge of tax explanations certainly makes life easier for taxpayers,” said Krzysztof Berliński, Director of the Tax Office at PKN Orlen.

The fight against aggressive tax optimisation

Participants of the “CIT Payers Forum” were also asked about solutions that should be implemented to improve tax collection. Maciej Żukowski drew attention in this context to the important role that, in his opinion, the National Revenue Administration (Krajowa Administracja Skarbowa) has to play in this area.

“Dishonest taxpayers constitute an area for the National Revenue Administration to prove themselves. To force the NRA to create a so-called “level playing field” is the role of KAS, which should effectively enforce such regulations,” – described Maciej Żukowski, tax advisor and former Director of the Income Tax Department at the Ministry of Finance.

The disproportions in the amount of CIT paid by companies was pointed out by the Polish Economic Society (Polskie Towarzystwo Gospodarcze) in their report covering the study for 2012-2019.

“The structure of CIT assumes the possibility of reducing the income by tax costs. If there is such a possibility, it is also possible to transfer profits: transfer pricing, fees for trademarks, interest on loans, etc. If the regulations make it possible, unless we make a revolution, as long as we continue to operate in this system, it all comes down to the camera of the National Revenue Administration. However, it is not allowed to pass judgment that the one who does not pay CIT is a fraud right away. If someone carries out extensive investment activities, especially in the same location where they pay tax, it is understandable that their tax base is reduced. More reliable controls are needed. Wherever there is activity, it is appropriate to contribute to the state treasury,” said Krzysztof Rutkowski, Partner at the law offices Kancelaria Doradztwa Celnego i Podatkowego Rutkowski i Wspólnicy and co-author of the “CIT and EBIT comparative analysis of representatives of selected sectors based on the data of the Ministry of Finance for the years 2012-2019”.

An attractive tax system is a simple one

A study by the Union of Entrepreneurs and Employers (ZPP) based on data from the Ministry of Finance from 2017 showed that out of 509 thousand CIT payers less than 345 thousand showed taxable income. After the deductions, the final number of taxpayers reporting CIT due was only 194,000. It is easy to calculate that only approximately 38% of taxpayers pay CIT. In the opinion of ZPP, one of the reasons for this state of affairs may be the complexity of the regulations.

“Can we become like Estonia or Ireland in fiscal terms? The most important features of those two systems are their simplicity and transparency. The data of the World Bank show that the average time necessary to complete tax returns in Poland is approximately 334 hours per year, in Estonia – about 80 hours, and in Ireland – circa 50 hours. Simple tax regulations are the key to the development of entrepreneurship and to the improvement of the tax system at a state level. It is worth leaning towards the changing philosophy and introducing the revenue tax replacing CIT. Of course, we see a challenge related to the need to establish an adequate rate of such a tax, but ultimately – regardless of the industry – all entities would include the cost of this burden in the prices of their products or services. Our recommendation is therefore to consider the revenue tax, which would be impossible to avoid, as well as easy to calculate and collect,” said Kamila Sotomska, Deputy Director of the Law and Legislation Department at the Union of Entrepreneurs and Employers.

The Polish Chamber of Commerce has been drawing attention to the need to reduce the complexity of the tax system for many years as well. However, the PCC notes that tightening the provisions of the law often does not keep up with the new tools utilised by companies that use tax optimisation.

“CIT is a tax that companies should pay. If they don’t, they should at least show investment costs as a reason why they don’t. Then such an income tax exemption would be justified, because those companies would be creating added value for the economy of a given country. However, if such activities are not carried out, then something is obviously wrong. The regulations are there, now we need the right analytical tools. Furthermore, it is important to reward reliable tax accounting,” noted Agnieszka Durlik, an expert of the Polish Chamber of Commerce.

Poland as an investment paradise – how to increase the attractiveness of the Polish tax system?

Can the Polish tax system compete with the systems of such countries as Belgium, Cyprus, Ireland or Luxembourg? Can we oppose practices that encourage transfers of profits from Poland? In the opinion of Professor Konrad Raczkowski, director of the Institute of Economics of the Social Academy of Sciences, Poland can compete with European tax havens by becoming an investment haven for entrepreneurs.

“In March 2019, the European Parliament recognised Luxembourg, Malta, Cyprus, Ireland and the Netherlands by an overwhelming majority as tax havens that facilitate aggressive tax planning. So we have a formal confirmation that these countries are tax havens. Some of them have been running tax haven policies since the 1970s. What can we, as the Republic of Poland, do to win additional tax revenues, but not necessarily at the expense of “squeezing” the tax base we have? We have two options. If we had large expenses, because of the pandemic, an increase in our deficit, debt – quite a significant one like in other countries – will we then decide to tax the existing tax base? The base will not grow, because if the taxation is too high, companies and corporations can then easily change jurisdiction. The average John Smith has it worse. But we can take a different path: broaden the tax base. This can be done by drawing in foreign companies and attracting investments that are not yet here. And this can be done by implementing changes to the Polish tax system that will make it attractive for companies. Changes which will make Poland a good tax destination. When it comes to the competitiveness of our tax system, out of 36 countries OECD countries, we rank 34^th. One has to transform one’s thinking and try to think about attracting companies from those countries that have high dynamics of generating new investments,” stated Professor Konrad Raczkowski, Ph.D., director of the Economic Institute of the Social Academy of Sciences in Warsaw.

Maciej Żukowski agreed with him, adding that unlike by increasing the base itself, it would be impossible to achieve higher levels of taxation by imposing greater burdens on the current CIT taxpayer base.

Ministry of Finance: legal predictability and business consultations are our priorities

In response to the appeals of Polish business for more predictability in tax regulations and the need to improve consultations with companies, Minister Piotr Patkowski took the floor.

“We all would like private investments in Poland to be as grand as possible. The main barrier, apart from the issue of the pandemic, is, among others, the instability of tax law. That is why we discuss at the Social Dialogue Council, among other things, the introduction of an absolutely mandatory rule of vacatio legis for all tax regulations. We want them not to enter into force overnight or next month, but always on a specific date: 1^st January or 1^st July. We will want to implement a proper vacatio legis for all new provisions, so that they are processed and announced in advance. The second absolute rule that we want to follow is a minimum of 21 or 30 days for public consultations and inter-ministerial arrangements so that all interested parties can familiarise themselves with the regulations, submit their remarks and proposals, and the government can respond to them,” said Piotr Patkowski, Undersecretary of State in the Ministry of Finance, Chief Spokesman of the Public Finance Discipline.

The Ministry also mentioned a programme of extended cooperation between the tax authorities and the world of business. Its aim is to improve the entrepreneurs’ comfort in terms of settlements with tax offices.

“We have at our disposal some non-imperative forms of influencing CIT payers, for instance a pilot cooperative-compliance programme that is being implemented by the National Revenue Administration. Taxpayers, in exchange for greater tax certainty and security and the possibility of cooperation with the tax administration, fully disclose their tax settlement mechanisms to the tax authorities. It is an optional programme, but there is a lot of interest from taxpayers. Certainly, there is also a need for the tax administration to create more effective selection tools for tax audits,” said Jakub Jankowski from the Income Tax Department at the Ministry of Finance.

Tax postulates for the “New Deal”

The Union of Entrepreneurs and Employers has been running an extensive tax agenda for many years. Some of the Union’s postulates could successfully be included in the “New Deal”, and some of them were supported by experts during the “CIT Payers Forum”. Among the supported activities postulated by the Union, there are the following:

• creating a competitive tax system that supports the development of Polish companies and attracts foreign entities, thus reinforcing economic growth;
• ensuring regulatory stability in the field of tax legislation, e.g. by introducing a minimum vacatio legis for acts regulating the economy and taxes, as well as by introducing the principle that all kinds of amendments in economic and tax law enter into force only once a year (e.g. on 1^st January);
• continuing the dialogue between the Ministry of Finance and Polish business in order to develop the best possible tax solutions;
• improving the process of public consultation regarding proposed tax solutions, including in the scope of the time to submit comments or the stage at which individual ideas are subject to consultation with business (pre-consultations, consultations regarding assumptions for draft acts).

Furthermore, the Union of Entrepreneurs and Employers maintains its regular postulate to replace CIT, which – as statistics show – remains a de facto voluntary tax, with a revenue tax that would be much more difficult to avoid and, at the same time, easy to collect and settle.

Warsaw, 9^th June 2021

 

Position of the Union of Entrepreneurs and Employers on the draft amendment to the Distance Act

 

The draft act presented by the Ministry of Development, Labour and Technology whose aim is to amend the act on investments in wind farms and some other acts (hereinafter: the Distance Act), liberalising to a certain extent the assumptions regarding the location of wind farms, is in fact a step in the right direction.

In said document, the liberalisation largely refers to the so-called “10H rule” – which is mandatory and according to which wind farms must not be located within a shorter distance from buildings and selected forms of nature reserves than 10 times the height of the turbine with raised blades. This means that the minimum distance from residential buildings for a modern wind farm with a maximum turbine height of 150-180 metres is approx. 1.5-1.8 kilometres.

The proposed amendment is a turning point in the government’s approach to the issue of the Polish energy sector transformation by allowing investments in onshore wind energy – currently the cheapest and fastest, in terms of investments, green energy source.

The growing supply deficit of green energy is a serious threat to the development of the entire Polish economy, thus also to the position of Poland in Europe. However, thanks to efficient and effective investments in onshore wind farms as well as large-scale solar sources, we can significantly reduce this deficit, providing the Polish industry with the necessary amount of cheap green energy. Moreover, a further development of these energy sources, along with the development of offshore wind farms, will positively affect the creation of Poland’s hydrogen economy.

With the above-mentioned facts in mind, the Union of Entrepreneurs and Employers would like to present feedback in the form of a series of comments which, in our opinion, will allow for increased effectiveness of the introduced regulations and thus their more frequent use by business.

I. Maintaining the “10H rule” as the administratively preferred distance

Unfortunately, the provisions of the draft act do not eliminate or soften the fundamental problem that has been present for years in the investment process in the field of onshore wind energy, i.e. conflicts within local communities related to such investments. Leaving “10H” unchanged as the administratively preferred distance will still constitute a significant investment barrier, since local governments – fearing conflicts between residents and local stakeholders – will cautiously approach the determination of closer distances when adopting local plans for investments in wind energy.

II. No simplified procedure for the so-called “repowering” process

Repowering refers to the process of replacing older machinery with next-gen turbines that have higher efficiency or higher installed power, resulting in an increase in net energy production. Importantly, the proposed regulations do not include simplified procedures for replacing wind turbines.

Facilitating the repowering process could increase the present-day supply of green energy by at least 20% in a way that is almost cost-free for the Polish economy. This could subsequently translate into an increase in green energy supply by up to 10 TWh (terawatt-hours) annually.

Therefore, we recommend introducing a relevant provision to the draft act which would stipulate that, in the case of replacement of devices with new ones (with higher environmental parameters or greater efficiency), a separate administrative procedure will be provided, which will constitute a significant simplification compared to the standard process.

III. Locating onshore installations near industrial plants

The presented draft Distance Act should be supplemented with provisions enabling or facilitating investments in renewable energy installations (in this case onshore wind farms) near industrial plants where the dominating landscape has an industrial character, and the construction of wind turbines would not adversely affect the aesthetic or environmental values of the surroundings.

Simplification of the investment process in post-mining, post-industrial or industrial areas would considerably accelerate the development of wind energy in Poland, and would also enable large domestic investors to quickly increase power from renewable energy sources (RES) for their needs, without incurring unnecessary costs.

For this purpose, it would be reasonable to introduce specific provisions to the Distance Act, which would exclude industrial development areas from the procedures introduced both by the Distance Act and envisioned in the consulted project. Furthermore, it is worth considering including in Art. 4 an exception to the obligation to keep the distance specified in the regulations in the case of construction of a wind farm in industrial areas.

An unambiguous exclusion of investments carried out in areas where industry is located from the scope of the regulations of the Distance Act would translate into a faster and more effective achievement of CO₂ reduction targets. One of the consequences of introducing such an exemption should also be the lack of the obligation to include and consult wind farms to be located in industrial areas in local spatial development plans.

An additional obstacle to the execution of investments in wind farms generating electricity for the needs of industry is laid down in Art. 35 sec. 1 of the Act of 7^th July 1994 Construction Law: the obligation to examine the compliance of a construction project with the local spatial development plan (hereinafter: LSDP) or with the land development conditions decision. The provisions contained in these documents often make it impossible to erect met masts used for wind measurements, necessary for examining the conditions prevailing at the site of the planned construction.

Henceforth, it is reasonable to supplement the above-mentioned provision with a regulation stating that the requirement referred to in this provision does not apply to technical infrastructure used to measure wind in industrial areas.

IV. Definition of a direct line in energy law

In the opinion of the Union of Entrepreneurs and Employers, one of the barriers to the development of renewable energy is the definition of a direct line contained in Art. 3 (11) (f) of the Energy Law of 10^th April 1997. The restrictive concept of a direct line requires adjustment to the requirements of Directive (EU) 2019/944 of the European Parliament and of the Council of 5^th June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (“Internal market in electricity” replacing the “Energy Efficiency Directive”). Pursuant to Art. 2 (41) of the Internal market in electricity Directive, “direct line” means either an electricity line linking an isolated generation site with an isolated customer or an electricity line linking a producer and an electricity supply undertaking to supply directly their own premises, subsidiaries and customers;.

Pursuant to Art. 7 sec. 1-3 of the Internal market in electricity Directive:

1. Member States shall take the measures necessary to enable:
   1. all producers and electricity supply undertakings established within their territory to supply their own premises, subsidiaries and customers through a direct line, without being subject to disproportionate administrative procedures or costs;
   2. all customers within their territory, individually or jointly, to be supplied through a direct line by producers and electricity supply undertakings.
2. Member States shall lay down the criteria for the grant of authorisations for the construction of direct lines in their territory. Those criteria shall be objective and non-discriminatory.
3. The possibility of supplying electricity through a direct line as referred to in paragraph 1 of this Article shall not affect the possibility of contracting electricity in accordance with Article 6.

In light of the above, the “insular” nature of the connection between an isolated producer and an isolated customer resulting from the Polish law seems to be a disproportionate and unjustified condition in the case of energy-intensive companies operating in a continuous system. The specificity of the operation of such plants requires having an emergency power supply, securing the necessary equipment in production installations, which may be of key importance for the company’s safety. It is a real barrier that cannot be overcome when trying to conclude contracts with renewable energy producers based on the institution of a direct line.

The provisions of Directive (EU) 2018/2001 of the European Parliament and of the Council of 11^th December 2018 on the promotion of the use of energy from renewable sources (“RED II”) with regard to the definition of a renewable electricity purchase contract (on the basis of which a natural or legal person agrees to purchase renewable electricity directly from an electricity producer), have not yet been transposed to the Polish legal system, which also hampers the low-carbon transformation.

V. Duration of individual stages of the approval process of a new LSDP

Provisions specifying the course and manner of conducting public consultations accompanying the processes of establishing or changing local spatial development plans, necessary to carry out investments in the area of onshore wind farms, are cited repeatedly in the draft act. The proposed regulations define the minimum duration of each stage of the approval process of the new LSDP and the accompanying public consultations, but do not specify the maximum time. Indication of the aforementioned maximum duration of determining the LSDP could standardise the process of changes and allow for more precise estimates of the time necessary to obtain permits for the construction of a wind farm. In our opinion, this could significantly facilitate the entire investment process, and be as a result a considerable incentive for investors.

VI. Investor relations with local communities

Currently, there are instances when local government authorities, fearing the reaction of the local community, refuse to cooperate with the investor in a non-public manner. In order to guarantee the transparency of information on investment plans for wind farms in a given commune (a Polish territorial unit), the investor should be allowed to communicate with the local community through official information channels.

Although in the current legal order there are no obstacles for an investor to run an informational and promotional campaign for a potential investment in a commune, it is advisable that the information process takes place within the framework of administrative and legal institutions. Therefore, it is proposed to establish an application path in the provisions of the Distance Act for the commencement of procedures constituting the process of locating wind farms. This should be done by means of a document in the form of an application within the meaning of Art. 64 of the Code of Administrative Procedure (CAP), announced in the form of notification by public announcement (Art. 49 CAP). In the application, the investor would provide information on the planned location of the wind farm along with documents determining the environmental impact.

Information through official commune channels will contribute to increasing the community’s trust in the investor. A well-informed community will be more willing to even try to discuss adopting a resolution to proceed with the preparation (or update) of the LSDP, taking into account wind farms. The investor will also have the opportunity to inform about the projected environmental impact of this investment.

VII. Raising the threshold of built-up area for the purposes of qualifying the project as an undertaking with a potentially significant impact on the environment

Pursuant to § 3 sec. 1 (54) of the Regulation of the Council of Ministers of 10^th September 2019 on projects that may have a significant impact on the environment, in connection with Art. 59 sec. 1 (2) of the Act of 3^rd October 2008 on the provision of information about the environment and its protection, and public participation in environmental protection and environmental impact assessments, photovoltaic installations with a built-up area of more than 0.5 ha require an environmental impact assessment, and thus obtaining a decision on environmental conditions.

In this context, we recommend considering raising the threshold of built-up areas for the purposes of qualifying the undertaking as a project that can have a potentially significant impact on the environment, and thus subject to an obligatory study on issuing a decision on environmental conditions (§ 3 sec. 1 (54) of the Regulation of the Council of Ministers of 10^th September 2019 on projects that may have a significant impact on the environment, Journal of Laws 2019 item 1839) – from the currently applicable values, i.e. not less than 0.5 ha in areas covered by forms of nature protection and not less than 1 ha in other areas, up to: 1 ha in areas covered by forms of nature protection and not less than 2 ha in other areas.

At the same time, we make a reservation that the proposed solution should include the maintenance of tools for verification by competent authorities of the need to conduct a procedure regarding the decision on environmental conditions, and to possibly conduct an environmental impact assessment, even if the revised thresholds are not exceeded.

VIII. Locating renewable energy installations on grade 4 agricultural land

Due to the current legal conditions, grade 4 agricultural land is largely used for the construction of photovoltaic installations. Inscribing grade 4 agricultural land in Art. 4 (1) of the draft act would significantly simplify the future investment process for photovoltaic farms with an installed electrical capacity of no more than 1000 kW, due to the exemption from the need to conduct a study of land use conditions and directions. This in turn would have a direct impact on shortening the time of investment execution.

Summary

In the opinion of the Union of Entrepreneurs and Employers, the proposed act ought to, first and foremost, eliminate all investment barriers related to the location and operation of onshore installations. This will allow for the restoration of confidence in state policy towards renewable energy sources, which was significantly damaged as a consequence of the introduction of the Distance Act in its current wording in 2016.

One of the major barriers to wind farms investments is the lengthiness of administrative proceedings. Therefore, in view of the Union, the target model for issuing administrative decisions regarding the investment process should include one “investment permit”, which will integrate the issues of environmental impact assessment and construction law procedures.

The successful removal of the above-mentioned problematic issues will indeed lead to a dynamic development of renewable energy sources, which will in turn trigger the entire Polish economy to develop and grow, as onshore wind energy has all the necessary potential to be a remedy to both the climate and economic crisis.

 

See more: 09.06.2021 Position of the Union of Entrepreneurs and Employers on the draft amendment to the Distance Act

Warsaw, 25^th May 2021

 

Report by the Union of Entrepreneurs and Employers:
The Digital Markets Act is to provide equal opportunities, but it may diminish the quality of services for European businesses and consumers

 

The regulation on contestable and fair markets in the digital sector, known as the Digital Markets Act, tries to address some of the challenges of digitisation and to ensure fair conditions for online competition. The Union of Entrepreneurs and Employers supports all initiatives aimed at improving the competitiveness and functioning of digital markets. We are, however, concerned that the DMA may in practice lead to a deterioration in the quality of digital services for European businesses and consumers, as well as to a slowdown in technological development.

The Union of Entrepreneurs and Employers has repeatedly called for the improvement of the regulatory environment for business. We believe that the way to achieve a high level of competitiveness of our economy is to create an attractive legal-and-institutional framework for companies to function in. We stand by this position also on a per-industry basis and call for no disproportionate burdens to be placed on the digital sector.

Presently, new digital regulations seem to be proposed before enough time to allow for a thorough assessment of the effects of the previous ones has elapsed. This way, not only does the regulatory burden on entrepreneurs increase significantly, thus generating costs and hindering business operations for small European entities in particular, but also legal certainty is reduced discouraging companies from risk-taking, innovation, and investments.

According to Jakub Bińkowski, Director of the Law and Legislation Department at the Union of Entrepreneurs and Employers: “The effects of the introduction of the DMA could be severe for European businesses as well as consumers who make use of digital services. For example, while the ban on the use of business user data is intended to prevent unfair competition, its unintended practical consequences may negatively impact European SMEs, a quarter of which do not have a website. As a result of the ban, the possibilities to use geolocation will become limited, and thus local companies without a website will lose their visibility and potential customers.”

Discussing the effects of the introduction of the DMA, it is impossible to ignore the economic consequences of the pandemic. “In the opinion of the Union of Entrepreneurs and Employers, all necessary measures should be taken to ensure that overregulation does not stifle the growth of the digital sector and does not put the post-crisis recovery in harm’s way. As the ECIPE study shows, Europe as a consequence of introducing the changes proposed in the DMA risk to lose approx. EUR 85 billion of GDP and EUR 101 billion of consumer welfare – that is the equivalent of all the benefits that the EU economy has gained thus far thanks to bilateral free trade agreements,” adds Kamila Sotomska, the Union’s Deputy Director of the Law and Legislation Department.

The dynamic development of digital tools along with free-market competition foster social usefulness of the Internet and consumer welfare. Taking this into account, any attempts at regulatory interventions should be made after prior evaluation of existing regulations. Moreover, the newly designed rules cannot disregard the diversity and variety of the forms of doing business in the digital world. Regulations for the digital market should be designed with caution so that, contrary to the original assumptions, the consumers and service recipients themselves do not lose out on their introduction.

See more: 25.05.2021 Report by the Union of Entrepreneurs and Employers: Digital Markets Act

Warsaw, 10^th June 2021

 

Economic forecast for the years 2021/2022 by the Union of Entrepreneurs and Employers

 

The economic slowdown in Poland in 2020 turned out to be milder than on average in the European Union. Poland’s GDP in 2020 shrank by mere 2.8%, while the GDP of the eurozone decreased by 6.6%.

At the beginning of the COVID-19 pandemic, the Polish economy was in a relatively better position compared to other economies. The most important factor due to which recession in Poland in 2020 was milder was the small share of sectors temporarily excluded from all activity as a consequence of anti-pandemic restrictions in the generation of added value in GDP along with the structure of exports constituting mostly of consumer goods, as well as the relatively smooth course of the crisis in Germany, Poland’s main trading partner.

Poland’s dynamically evolving macroeconomic situation directly impacts the condition of the enterprise sector. In order to better understand the processes taking place in this environment, the Union of Entrepreneurs and Employers has decided to publish its own economic forecast for the next two years.

The forecast was modelled on the basis of a proprietary econometric model (description of methodology included in the document) and takes into account key macroeconomic indicators, i.e. unemployment rate, inflation rate, GDP growth rate and investment rate (in relation to GDP). The current forecasts are as follows.

Unemployment
2021: 6.1%
2022: 5.9%

Inflation
2021: 4.0%
2022: 3.1%

GDP growth
2021: 4.0%
2022: 5.1%

Investment rate (% of GDP)
2021: 16%
2022: 17.2%

Basing on the forecast for 2021-2022, three factors can be identified that will have the greatest impact on the condition of enterprises in the years to come. These are the following: a significant slump in corporate investment during the crisis and the future impact of post-crisis pro-investment packages targeted at specific industries; wage pressure as a result of high inflation, a mismatch between the structure of supply and demand in the changing labour market, and the low unemployment rate; non-uniform inflation striking harder industrial sectors and those that cannot freely shape the prices of their products and services or easily renegotiate contracts.

 

See more: Economic forecast for the years 2021/2022

Warsaw, 10^th May 2021

Survey by the Union of Entrepreneurs and Employers:
Pawnshop market is growing fast

While the number of consumer loans granted by banks and companies specialising in loans is declining, and the government is tightening regulations for the financial industry, the pawnshop sector is booming. According to the first ever report on pawnshops in Poland by the Union of Entrepreneurs and Employers: although pawnshops provide cash loans against a pledge, they are circumventing the provisions of the Consumer Credit Act.

In a survey by the Union of Entrepreneurs and Employers whose completion took several months, its authors evaluated the size of the market in Poland, as well as the motives and opinions of customers making use of pawnshop services, but also found irregularities in the operation of the industry.

These are the key findings of the study:

• There may be as many as 40,000 pawnshops in Poland. For comparison: there are less than 7,000 convenience stores in the popular retail chain whose logo is a green amphibian.
• Almost 4.5 million Poles have made use of pawnshop services, and 1.5 million people used such services during the pandemic.
• As many as 65% of pandemic-times pawnshop customers backed their decision with the fact that their financial situation deteriorated as a result of the lockdown.
• As many as 41% of pawnshop customers used their services, because they had not obtained financing from a bank or loan company.
• Over the last dozen or so months, secured pawn loans have become almost as popular as consumer loans from legal loan companies.
• Pawnshops avoid formal registration and functioning as pawnshops per se and consequently circumvent the Consumer Credit Act, which regulates the relationship between financial institutions and their customers, strengthening the position of consumers. For example, employees of the Union of Entrepreneurs and Employers paid a visit to a pawnshop operating as… a butcher shop.
• In many cases, irregularities were observed, including failure to conform with provisions of the GDPR. Contracts did not contain clauses on the processing of personal data of customers, and the survey also showcases irregularities in the documentation of transactions.
• The valuation of an item accepted in a pawnshop on average amounts to only about 35% of its market value. For example, for a gold neck-chain bought in a store for PLN 490, one can only get PLN 90.
• There are also situations in which customers are not able to read the contract prior to signing it or to withdraw from it later on.
• The lack of clear rules for calculating the cost of a loan is another identified irregularity – it happens that verbally provided information on the cost of a loan is inconsistent with what is ultimately in ink.
• For a pawnshop loan, one has to pay up to 1.5%… a day.

While working on the report “The pawnshop market in Poland – irregularities, consumer protection, systemic risk”, the Union of Entrepreneurs and Employers thoroughly scrutinised this sector. Research showed that pawnshops play an increasingly significant role in the personal finances of millions of Poles.

“A considerable group of consumers have lost access to regulated and supervised sources of obtaining money on the financial market. The reason is simple: these people no longer meet the criteria to be granted cash loans, and as a consequence have been forced to look for alternative methods of obtaining funds. And so, Poles ‘en masse’ went to pawnshops,” says Marcin Nowacki, Vice-President of the Union of Entrepreneurs and Employers.

Pawnshops everywhere

As of today, pawnshops in Polish cities are easily accessible and basically commonplace. One can easily spot them, pay a visit, and make a trade. These factors mean that pawnshops quickly gain customer interest. Over the period of a year, Poles have noticed and increasing number of people in their personal circles who make use of such services, which is also confirmed by research by Maison&Partners commissioned by the Union. Already 14% of Poles have experience trading an item at a pawnshop, and as many as 5% have used this method of obtaining cash since March 2020, that is, the outbreak of the pandemic. In other words, as many as 1.5 million Poles used the services of pawn shops over the last 12 months. Pawn loans have now become almost as popular as those from regulated loan companies.

According to Professor Dominika Maison, the author of the survey on pawnshop customers, Poles have become accustomed to pawnshops, and many have a rather good opinion of them. “Pawnshops are no longer considered merely a last resort or an act of desperation. In time of loss of earnings or high job insecurity, they have become a convenient and quick form of obtaining cash with no strings attached,” explains Professor Maison.

However, research carried out by the Union’s associates show that entities running pawnshop operations circumvent the provisions of the Consumer Credit Act, and thus, among others, the applicable limits of non-interest costs that are applicable to entities wishing to grant financial loans, but also consumer rights such as the obligation to familiarise customers with the contract prior to signing it or to inform them about the actual costs of the loan.

Pawnshop at the butcher’s

What was really difficult for experts to analyse was the number of pawnshops operating in Poland. It took experts and associates of the Union of Entrepreneurs and Employers several months of efforts to determine the size of this market.

“We thoroughly reviewed existing data, public registers, conducted telephone interviews at points conducting pawnshop activities, and finally visited randomly selected locations. The conclusion is that it is practically impossible to estimate the real number of pawnshops in Poland. Their number may range from 3,000, as this is the number of the relevant Polish Classification of Activity entries, up to 40,000,” claims Piotr Palutkiewicz, co-author of the report.

As the authors note in their report, despite the fact that in the Polish Classification of Activity (PKD), there is a special code 64.92.Z on (among other things) granting secured loans, it turns out that entities operating on the pawnshop market avoid registering under this code. Henceforth, pawnshops avoid to formally function as pawnshops. The Union’s experts visited, among others, a pawnshop, which was registered as… a butcher shop.

Pawnshops overlooked by the watchful eye of the legislator

In the report, the Union of Entrepreneurs and Employers draws attention to the legal environment of the financial system in Poland. The Union’s expert wrote that: “The financial market can be considered overregulated. Therefore, it seems that the liberal requirements for entities wishing to enter a given financial services sector can be evaluated favourably. However, what ought to be pursued are equal opportunities and requirements for enterprises operating on the market. Nevertheless, the legislator selects groups of entities on the financial market on a point-by-point basis and additionally regulates them. As a result, banks or loan companies “enjoy” excessive and frequently amended restrictions. While other entities, such as pawnshops, operate in an unhampered legal environment. This translates not only into the lack of equal opportunities for enterprises, but also into unequal consumer protection on the financial market.”

Pawnshop standards

According to research by Maison&Partners commissioned by the Union of Entrepreneurs and Employers, consumers go to pawnshops without any deeper analysis of the costs of t transactions, either planned or concluded. They do not compare the possibilities of obtaining cash available to them. They act spontaneously. This may pose a risk to consumers, as the finding from the research lead to the conclusion that pawnshops do not have uniform rules with regard to informing about the terms and conditions of transactions or uniform standards of customer service.

The Union’s associates visited more than a dozen Polish pawnshops in order to carry out transactions there. The survey showed a number of irregularities and problems from a consumer protection perspective. These include:

• frequent failure to provide contract templates for inspection by the client prior to signing the document,
• significant discrepancies in the valuations of the pledged items,
• no clear cost calculation rules,
• no clauses on the processing of personal data of customers,
• irregularities in documenting transactions,
• verbal and inconsistent information on the real pawn loan costs.

“The standards of customer service and protection differ from the practices applied on the regulated financial market. For example, in some cases, customers were unable to familiarise themselves with contracts or later withdraw from them,” sums up Marcin Nowacki.

Experts of the Union of Entrepreneurs and Employers add in their report: “The issue of spreading a protective umbrella over consumers is raised every single time when works on new regulations of the financial market take place. Therefore, the question arises whether the abandonment of the regulation of the pawnshop market is the intention of the legislator or whether the pawnshop sector is simply invisible from the point of view of law and consumer protection.”

It’s an expensive service

The Union of Entrepreneurs and Employers indicates in the report that pawnshop loans are primarily characterised by very high costs. The percentages fluctuate within a very wide range: from 0.66% to over 1.5% per day. In addition to the amount of interest, the real cost of the transaction is the difference between the market value and the valuation of the items at the pawnshop. Customers declare in the research that they receive on average PLN 224 less than they assumed they would before finalising a transaction. However, they do not negotiate for a higher valuation. As a result, the average valuation of an item handed over to a pawnshop amounts to merely about 35% of its market value.

“Our survey of pawnshop customers showed that money often has a subjective value. It does happen that customers decide to pledge an item, without the intention to buy it out, for 30% of its value, and – surprisingly – they are often satisfied with such a transaction. This is due to the fact that from their subjective point of view, which takes into account more than just financial issues, the transaction was beneficial, because, for example, they did not care about that item. They needed money immediately or did not want to have any obligations in the form of instalments or any additional costs resulting from not paying back on time, including debt collection,” explains Professor Dominika Maison.

Car as collateral

According to the report by the Union of Entrepreneurs and Employers, numerous pawnshops accept high-value items and real estate as collateral, such as a car garage, parking space, refrigerated trailer or agricultural tractor.

“Our associates were able to pawn a luxury passenger car. However, the valuation of the pawnshop was PLN 50,000 lower than in the car vendor’s advertisement,” adds Piotr Palutkiewicz.

The report by the Union of Entrepreneurs and Employers is the first ever study and description of such comprehensive scope dedicated to this market in Poland. The full text of the study is available at: https://tiny.pl/rv9fr.

Warsaw, 15^th May 2021

 

Commentary of the Union of Entrepreneurs and Employers on the Polish Deal

 

The Polish Deal is an exceptionally anticipated document, the presentation of which had been postponed several times. Having discussed today the general assumptions of this programme manifesto, we conclude that – in areas of particular interest to entrepreneurs – it does not contain any ground-breaking solutions.

In the Polish Deal, we fail to find the awaited proposals regarding the legal and institutional environment for business, while the issue of legal uncertainty – a key barrier to investment at the moment – is not even mentioned. The proposed measures presented in the section “Good climate for enterprises” are as a matter of fact recycled ideas that were previously announced or solutions that have been underway for some time. Part of them, such as the introduction of the institution of a family foundation or the extension of “Estonian CIT”, are of course beneficial for entrepreneurs; however, these proposals were already known and described in the past. Therefore, the Polish Deal does not introduce any major novelties in the field of entrepreneurship.

Certainly, two key components of the programme deserve approval, and these are: increasing the tax-free amount to PLN 30 thousand and the second tax threshold to PLN 120 thousand. Both laudable decisions are of the most rational nature and adjust these amounts to the economic reality in which wages have been steadily growing for years.

Unfortunately, these solutions are accompanied by a proposal for changes in the scope of health insurance, that is, the introduction of a model of a uniform premium in the amount of 9% of total income, which would not be tax deductible. Therefore, in practice, the Polish Deal may lead to an increase of burdens for some taxpayers.

Nevertheless, there are certain solutions discussed in detail that were announced during the conference and which are praiseworthy. In this respect, one must mention, among others, the changes regarding the possibility to build a house with an area of up to 70 sqm on request. In smaller towns, this may solve the housing problems of Polish families to a high degree. It is important that the regulations introducing this change directly indicate that the possibility of building in line with this procedure also applies to residential all-year-round houses.

The announced “liquidation of junk contracts” (civil-law contracts) raises serious doubts. If we are to understand that the government means to equate premiums for all types of contracts, this will result in a considerable reduction in the flexibility of forms of employment on the labour market. While we see the need to intervene in the scope of limiting tax arbitration, we would consider its proper form to be a general reduction of the tax wedge on remuneration earned under various employment contracts.

The trend towards digitisation that is evident in the Polish Deal is commendable both in terms of the healthcare system and other public services. It will be one of the greatest challenges ahead for the years to come – it is therefore advantageous that the topic of digitisation is particularly highlighted in the National Recovery Plan and the discussed programme document.

The complexity of the political programme under discussion, which concerns both economic issues and those related to public services, the healthcare system or pro-family policies (exceptionally important from the point of view of the problematic demographic situation), makes its detailed analysis time-consuming. In view of the above, the Union of Entrepreneurs and Employers will present a comprehensive position on the Polish Deal on Monday of the following week.

 

See more: 15.05.2021 Commentary of the Union of Entrepreneurs and Employers on the Polish Deal

Warsaw, 23^rd April 2021

 

European minimum wage – smothering the EU economy
at a key moment in overcoming the crisis

 

The Directive on adequate minimum wages in the European Union will have detrimental effects on the European labour market and economy. Furthermore, the directive may worsen the situation of the most vulnerable workers, make it more difficult for the EU to recover from the ongoing crisis, and disrupt well-functioning collective bargaining systems. These are the main reasons why the Union of Entrepreneurs and Employers, together with SME Connect and the European Enterprise Alliance, co-hosted a Round Table on the European Minimum Wage on 23^rd April.

The round table constituted a platform for the exchange of experiences and opinions for Polish and European as well as global organisations that helped shed new light on the proposals of the European Commission. The negative impact on companies affected by the crisis, the marginalisation of the most vulnerable of workers, and the growing number of people employed on the basis of other forms than a contact are merely a few of the actual effects of the directive, which are being downplayed by the Commission. That is also why the discussion covered the aspect of the Commission’s competences in the field of remuneration, the issue of the lack of a minimum wage in individual EU countries, or the impact of the directive on the competitiveness of the European economy on world markets.

Over the course of the event, a letter to EU authorities on the European Minimum Wage was published. It was addressed to the President of the European Commission Ursula von der Leyen, President of the European Parliament David Maria Sassoli and President of the European Council Charles Michel. The signatories of the appeal who object the proposal of a European minimum wage are 25 Polish and European institutions, including employers’ organisations, associations, and think tanks.

The authors of the letter firmly stressed that the European Union should remain a place of freedom and cooperation, where practices of one EU member states are not imposed in other member states. The signatories also drew attention to the fact that the proposal for adequate minimum wages in the European Union is focused on achieving political goals and fails to take into account the real effects of the regulations introduced, which will – first and foremost – negatively affect those whom the directive was supposed to help, that is, those who earn the least.

 

See more: 23.04.2021 Letter on the European Minimum Wage

Warsaw, 15^th April 2021

 

Over 30 business organisations and think tanks appeal to the government: yes to a tax wedge reform, no to choking the middle class

 

As many as 33 organisations signed an appeal to the government regarding the planned amendment of the labour taxation model. The authors of the document emphasised the necessity of a rational debate regarding the tax wedge and drew attention to the threats arising from some of the directions of changes that were postulated. Among the signatories of the appeal, there are five representative employers’ organisations, four think tanks, over a dozen industry organisations and numerous local employers’ organisations. The appeal was initiated by the Union of Entrepreneurs and Employers.

What prompted the development of the appeal were the announcements of tax changes to be included in “Nowy Ład” (“The New Order”), a strategic economic programme, the publication of which was postponed in March due to the pandemic. Among those announcements, there were an increase of the tax wedge for higher earners, along with a decrease for lower earners.

The signatories of the appeal see the need for a bold reform of the tax wedge in Poland, but stress the fact that the current model of relatively low wage taxation constituted a significant competitive advantage for our economy, and increasing the level of burden on the middle class may lead to an outflow of specialists, whose numbers are already insufficient, from the Polish labour market.

 

The full text of the appeal is presented below:
Organizations’ appeal on labour taxation

Warsaw, 19^th April 2021

 

Digital Markets Act Round Table by the Union of Entrepreneurs and Employers: how to make the DMA a “scalpel” and not a “road roller”?

 

The Digital Markets Act is a proposal presented by the European Commission for a regulation imposing additional restrictions, obligations, and bans on a group of digital companies referred to in the DMA as “gatekeepers”. Participants of the round table hosted by the Union of Entrepreneurs and Employers, which took place on Thursday, 8^th April 2021, discussed the Polish government’s position regarding the regulation, the challenges related to its possible future application, as well as the doubts related to its practical effects.

The following guests participated in the debate:

• Olga Semeniuk, Undersecretary of State at the Ministry of Development, Labour and Technology,
• Tomasz Bagdziński, Director of the Competition Protection Department at UOKiK (Office of Competition and Consumer Protection),
• Katarzyna Szymielewicz, President of the Panoptykon Foundation,
• Tomasz Wróblewski, President of the Foundation Warsaw Enterprise Institute,
• Marcin Krasuski, Government Affairs and Public Policy Manager at Google Polska.

The round table debate was chaired by Jakub Bińkowski, Director of the Law and Legislation Department of the Union of Entrepreneurs and Employers. Before the discussion began, Bińkowski gave a short presentation reflecting the Union’s approach to regulating digital markets and containing key questions regarding the DMA itself.

„We see the DMA as part of a wider regulatory landscape for the digital sector in the European Union,” said Jakub Bińkowski. “Recently, we have been observing a lot of legislative initiatives concerning this part of the economy. We doubt whether further regulation and increasing restrictions are a good direction for the development of European companies.”

In the course of the discussion, many matters were addressed, including the issue of the actual effects of the DMA on the functioning of companies from the digital sector and the usefulness of individual services, the role of national competition and consumer protection authorities in the application of regulations, or the significance of regulatory dialogue with business to clarify the content of individual obligations and restrictions included in the regulation. Cross-sectional issues were also discussed: the effectiveness of existing regulations affecting digital platforms, such as the GDPR, the approach of the European legislator to building a strong digital market, and finally, the issue of an effective regulatory framework for the management of users’ personal data.

 

The round table debate was recorded and can be viewed at your leisure. It can be viewed at: https://tiny.pl/r8vb5.

Warsaw, 5 May 2021

 

EESC Activities Report no 3/21

 

Marcin Nowacki, President of the European Enterprise Alliance and Vice-President of the Union of Entrepreneurs and Employers, and Tomasz Wróblewski, President of the Warsaw Enterprise Institute, are members of the European Economic and Social Committee (EESC), an EU advisory body which represents employers’ and employees’ organisations in the EU lawmaking process. We present a summary of their activities in March 2021.

On 24-25 March, the EESC plenary session held a debate with the participation of the EU Commissioner for Neighborhood and Enlargement Olivér Várhelyi on “‘Enhancing the accession process – A credible EU perspective for the Western Balkans“.

In addition, during the plenary session, the EESC discussed the trade policy challenges for economic recovery after the COVID-19 crisis with Executive Vice-President of the European Commission Valdis Dombrovskis.

On 1 March, Marcin Nowacki attended an extraordinary meeting of the EESC’s Employers’ Group with C During the debate, Members of the Employers’ Group expressed concern that in recent months new regulations had been adopted that would increase the bureaucratic burden for companies, especially for SMEs. According to the EESC, companies need less bureaucracy, not more. Commissioner Breton explained that the ‘one more, one less’ principle of symmetrically introducing and removing administrative burdens in the same policy area is only the beginning of reducing bureaucracy as part of the Better Regulation agenda.

Moreover, in March this year Marcin Nowacki participated in the meetings of the Section for Transport, Energy, Infrastructure and the Information Society (TEN), as well as the Section for External Relations (REX). The subject of the March meeting of the TEN Section was, among others, discussion of the Opinion on the single European Railway Area, as well as a debate on the Opinion on the report on the State of the Energy Union Report 2020 and Assessment of National Energy and Climate Plans.

Moreover, during the meeting of theREX section , section members discussed, among others, EU relations with the Western Balkans..

Regulatory activity

Tomasz Wróblewski is rapporteur for the EESC opinion on the European economic and financial system: fostering openness, strength and resilience. On March 26, the first study group meeting devoted to this topic took place.

Useful links

• OPINION ECO/544
• European economic and financial system: fostering openness, strength and resilience

Marcin Nowacki has been appointed as a member of the EESC study group on roaming on public mobile communications networks within the Union. The current Regulation (EU) No 531/2012 regulating the above matter will expire on 30 June 2022. The focus of the study group is to provide an opinion on the proposal to extend the validity of the regulation, as well as to adjust the maximum wholesale charges with a view to ensuring the sustainability of the service retail roaming services at domestic prices, introducing new measures to increase transparency and ensure that you are fully satisfied with using your telephone abroad as at home in terms of quality of service and access to roaming emergency services.

More information about the EESC

What is EESC?

The European Economic and Social Committee (EESC) is an EU advisory body comprising representatives of employers’ and workers’ organisations and other interest groups. It issues opinions on EU issues to the European Commission, the Council of the EU and the European Parliament, thus acting as a bridge between the EU’s decision-making institutions and EU citizens.

What does the EESC do?

It gives the interest groups a formal say on EU legislative proposals. Its three key tasks are to:

• Ensure that EU policy and law are reflect to economic and social conditions in the Member States.
• Engage in dialogue with employers’ and workers’ organizations from all member states.
• Promote European integration and participatory democracy.

What is the EESC composition?

The EESC has 329 Members from all EU Member States, who are appointed for a renewable five-year term of office. Members are nominated by national governments and appointed by the Council of the European Union. They are independent and perform their duties in the interest of all EU citizens. The number of Members per country is in proportion to the country’s population.

How does the EESC work?

The EESC is consulted by the European Parliament, the Council of the EU and the European Commission on a variety of subjects. It also issues opinions on its own initiative.

Members work for the EU, independently of their governments. They meet 9 times a year. Opinions are adopted by a simple majority vote.

Meetings are prepared by the EESC’s specialized sections and the consultative commission on industrial change. The EESC’s specialist think-tanks (known as ‘observatories’) track the progress of EU strategies.

The EESC keeps in touch with regional and national economic and social councils throughout the EU – mainly to share information and discuss particular issues.

 

See: 05.05.2021 EESC Activities Report no. 3/21