Warsaw, 4^th November 2020

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON LOCKDOWN

 

The Union of Entrepreneurs and Employers has consistently been advocating against shutting down the economy. In our view, the right direction is rather to enable the functioning of as many industries as possible, while maintaining – needless to say – all appropriate sanitary rigors. We are observing a disturbing tendency to restrict the operations of subsequent sectors based on unverifiable and sometimes even absurd premises (as is the case of shutting down the food catering industry, an action justified during a press conference with data on significant number of infections at weddings).

At today’s press conference, further restrictions were introduced, including to the operations of shopping centres. What raises our greatest concern, however, is the explicit announcement that the only step to follow the currently introduced restrictions is a complete shutdown of the entire economy (one could conclude from the statements at the conference that on a larger scale than the one in the spring). As we have mentioned before, a full lockdown is a direction we fundamentally disagree with. Of course, it cannot be ruled out that the collapse of the healthcare system may lead to the introduction of a “national quarantine” of some kind. Nevertheless, one should in such a case communicate this fact clearly and, moreover, be aware of the huge costs associated with a lockdown.

After the March-May period, we are wiser for the experiences of the first lockdown – a decision made by the vast majority of developed countries. As a result, we now have several estimates regarding its impact on both the economy and health.

In terms of the former, a lockdown obviously means a significant reduction in economic activity. In April this year, Minister of Finance Tadeusz Kościński stressed that each month the economy was shut down meant a decline in the GDP growth rate by 2 percentage points. Back then, the lockdown was a relatively new concept and its effects were subject to forecasts rather than specific analyses. Statistics Poland later provided hard data: in Q2 2020, Polish GDP decreased by 8.2% year-on-year. According to one study, global production at the peak of the lockdown decreased by 33%, and over the entire year, global GDP will have decreased by over 9% (A. Mandel, V. Veetil “The economic cost of COVID lockdowns: an out of equilibrium analysis”). The World Bank presented a slightly more optimistic forecast, according to which the decline in global GDP will amount to 5.2%.

Faced with difficult decisions regarding a possible re-closure of economies, experts in other countries are trying to recalculate the potential costs of this solution. Economists quoted by The Daily Telegraph fear that the UK economy may shrink by 12% in November (one must remember this country was particularly affected by the first wave of the epidemic – its GDP dropped by 20% in Q2 2020). The German Institute for Economic Research (Deutsches Institut für Wirtschaftsforschung) estimates that the partial lockdown in November will cost the German economy EUR 19.3 billion and will put 400,000 workers at risk.

There is therefore no doubt that the economic costs of the lockdown are enormous. At the same time, it is not at all certain whether it is the optimal solution from the point of view of counteracting the epidemic. According to one of the studies (A.D. Arnon, J.A. Ricco, K.A. Smetters “Epidemiological and economic effects of lockdown”), interventions of federal and state authorities in the USA reduce social contacts to a much lesser extent than voluntary social distancing, which is responsible to the largest extent for this reduction and at the same time has a much lower economic cost. In particular, the authors of the study argue that individual interventions concerning people’s behaviour (such as ‘stay at home’) were much more effective in reducing viral transmission than restrictions imposed on businesses.

In this context, it is difficult to ignore the scientific dispute regarding the medical significance of a lockdown. The famous “Barrington Declaration” indicates that “lockdown policies have disastrous effects” on public health in the short and long term and, paradoxically, may lead to an increased number of deaths in the coming years due to their impact on diagnosis, vaccination, and treatment chronic diseases, as well as the mental health of the society. The Well Being Trust has estimated that the number of ‘additional’ deaths caused by COVID-19 and brought about by depression, addiction, or isolation-related loneliness could in the US be as high as 150,000. The negative impact of the lockdown policy on particularly vulnerable groups, such as children and the elderly, is also repeatedly reported. According to some researchers, the negative effects of lockdown on the healthcare system might be observed for up to five years. A detailed description of research and available data on the impact of lockdown policies on public health can be found in the latest study by the Warsaw Enterprise Institute “It is too late for a hard lockdown”.

To sum up, the Union of Entrepreneurs and Employers is against shutting down the economy. We believe that Poland cannot afford another lockdown. We understand that the healthcare system is approaching its limits and this may constitute an argument for “a national quarantine”. Nonetheless, we emphasise the enormous economic costs that it will entail, and we also draw attention to the doubts regarding the validity of this solution from the point of view of public health.

 

See: 04.11.2020 Position of the Union of Entrepreneurs and Employers on lockdown

 

Fot. Corona Borealis / Adobe Stock

Warsaw, 4^th November 2020

 

Position of the Union of Entrepreneurs and Employers on the Directive of the European Parliament and of the Council on adequate minimum wages in the European Union

 

The Directive of the European Parliament and of the Council on adequate minimum wages in the European Union, proposed on 28^th October 2020, constitutes the next stage in the implementation of the European minimum wage. The Union of Entrepreneurs and Employers consistently opposes the introduction of such a solution due to: the European Union’s lack of competence to act in the field of wages; the non-binding nature of the political declaration known as the European Pillar of Social Rights; and the negative social and economic effects that this regulation will cause. Furthermore, the Union of Entrepreneurs and Employers is critical of the way how the European Commission used the opinions collected during consultations with the European Economic and Social Committee and of the solutions presented in the draft Directive, in particular the definition of the adequacy of the minimum wage and the aggressive formula for extending collective bargaining.

The first aspect of the Directive on adequate minimum wages in the European Union that raises serious doubts is the choice of the legal basis. In the explanatory memorandum we read that “the basis of the proposed directive is Art. 153(1) (b) of the Treaty on the Functioning of the European Union (TFEU), which states that the Union supports and complements the activities of the Member States in the field of working conditions, within the boundaries of the principles of subsidiarity and proportionality (Article 5(3) and 5(4) of the Treaty on European Union TEU). Since it does not contain measures directly affecting the level of pay, it fully respects the limits imposed to Union action by Article 153(5) TFEU”. In the opinion of Union of Entrepreneurs and Employers, the above claims are false. Article 153 TFEU is the standard legal basis for EU actions in the field of social policy. Art. 153 sec. 1 lists a number of areas in which the EU can support and complement the action of member states. One of them is listed in Art. 153 par. 1 b as “working conditions”. However, as a clear exception to the EU’s social competences under Art. 153 par. 5 TFEU states that “the provisions of this Article shall not apply to pay”. It is evident that Art. 153 par. 5 TFEU does not mention the direct impact on the level of remuneration, but explicitly states that the EU institutions have no competence in this area, whether directly or indirectly. This means that the Treaties in a clear and literal way exclude EU action in the field of wages, and the proposed Directive is an example of exceeding the competences and ignoring EU law by the European Commission.

The second debatable issue is the justification of the need to introduce the Directive on the European minimum wage by referring to the European Pillar of Social Rights (“EFPS”) established in November 2017. The EFPS assumptions include adequate minimum wages. It is worth noting, however, that the EFPS is not a legal act, but merely a non-binding political declaration that some believe is intended to stimulate the development of EU legislative initiatives on social rights. Nevertheless, the EFPS provisions themselves exclude this possibility. Recital 18 of the ESPS makes it clear that “at Union level, the European Pillar of Social Rights does not entail an extension of the Union’s powers and tasks as conferred by the Treaties. It should be implemented within the limits of those powers”, while recital 19 states that “the establishment of the European Pillar of Social Rights does not affect the right of Member States to define the fundamental principles of their social security systems and manage their public finances, and must not significantly affect the financial equilibrium thereof”. Therefore, the Union of Entrepreneurs and Employers is of the opinion that the regulation of the minimum wage remains the exclusive competence of member states, and although the EU may take measures to support them in improving working conditions, such instruments should not possess the binding nature of a directive.

Thirdly, it should be noted that the Commission did not consider to a sufficient extent the results of its consultations. The Union of Entrepreneurs and Employers participated in the consultations of the European Commission, and its representatives sit on the European Economic and Social Committee (“EESC”). The explanatory memorandum to the Directive states that “the European Economic and Social Committee also adopted opinions of relevance for an EU initiative on adequate minimum wages”. However, the applicants ignored the fact that the EESC’s Opinion failed to reach consensus on a number of contentious issues, including the EU’s competence to act on minimum wages. In fact, the Opinion issued by the EESC reflects the gap between the positions of the European Workers and Diversity Group and the Employers Group.

With regard to the impact assessment of the Directive, it should be noted that the applicants underestimate its social and economic impact. The explanatory memorandum states that the Directive will significantly improve the remuneration of employees and reduce workers’ poverty. The applicants note that “the expected economic impacts include increased labour costs for firms, increased prices and, to a lesser extent, lower profits”, but argue that the impact on enterprises would be mitigated by an increase in consumption among low-wage earners supporting domestic demand. Apart from the fact that this concept was not supported by any calculations, the applicants forgot that the rising labour costs would lead to an increase in arbitration on the European labour market. According to the research by The Netherlands Economic Review, the average employment on a non-employment basis in the OECD is 11.5%. On the other hand, in Poland, France, Italy, Portugal, Spain and the Netherlands, as many as 21% to 27% of employees are employed on the basis of civil law contracts, and this number is constantly growing. The European minimum wage may make an employment contract an even greater deficit commodity on the labour market. Furthermore, as a result of the introduction of the European minimum wage, employers may force employees to switch to part-time work, which would effectively reduce their remuneration.

In terms of the provisions of the Directive themselves, the Union of Entrepreneurs and Employers has the following reservations.

First of all, the Union of Entrepreneurs and Employers criticizes the provisions of Art. 5 of the proposed Directive, a definition of the adequacy of minimum wages. Article 5 obliges Member States to introduce the necessary measures to guarantee the adequacy of minimum wages based on stable and clear criteria. Interestingly, the requirement to establish a minimum wage at 60% of the gross median wage and 50% of the gross average wage are mentioned in recital 21 and not in the text of the directive itself. The preamble, contrary to the provisions of the directive, is not binding, although it has the so-called indirect authority and is often used to provide a purposeful interpretation of regulations. Consequently, despite the lack of a literal provision, it can be expected that the Directive will be interpreted in a way that obliges member states to ensure a minimum wage at 60% of the gross median wage. The Union of Entrepreneurs and Employers is of the opinion that such a postulate is unacceptable due to the lack of EU competence in this area and the negative economic effects that such an obligation will have for enterprises and employees.

And secondly, the Directive introduces an aggressive formula for expanding collective bargaining, which does not respect the traditions of the member states where the minimum wage is regulated by law. Art. 4 sec. 2 of the proposed Directive states that “Member States where collective bargaining coverage is less than 70% of the workers defined within the meaning of Article 2 shall in addition provide for a framework of enabling conditions for collective bargaining, either by law after consultation of the social partners or by agreement with them, and shall establish an action plan to promote collective bargaining”. Poland, despite being a country with a low level of unionisation, meets the demands of the Commission in terms of updating the minimum wage, involvement of social partners, and the minimum wage monitoring and enforcement system basing on the provisions currently in force in Poland of the Act on the minimum wage for work. Consequently, EU action in this area is unjustified.

Institutions of the European Union are bound by the rule of granting, which means that the Union acts only within the boundaries of powers conferred on it by the member states in Treaties, and by the principle of subsidiarity, i.e. taking the least intrusive, yet effective means to achieve a given goal. The directive on adequate minimum wages in the European Union violates both of these fundamental principles of EU law, and therefore should be assessed negatively.

 

Fot. Guillaume Périgois / Unsplash.com

Warsaw, 3^rd November 2020

 

The Union of Entrepreneurs and Employers calls for a stop
to the creeping lockdown of the economy

 

The Union of Entrepreneurs and Employers has consistently called for responsible and predictable actions to be undertaken by the government in terms of the measures to counter the spread of the coronavirus. The Union strongly emphasises that any and all activity of this nature must not result in further restrictions to running a business and considers the solutions adopted thus far to be excessively far-reaching.

Already today, entrepreneurs operating in industries subject to restrictions are threatened with bankruptcies on a mass scale, which would result in the loss of jobs by thousands of people. In the long run, the situation will deteriorate in industries related to them, and consequently in the entire economy. We strongly urge that closed industries be opened. Every subsequent day they are shut down makes it necessary to introduce significant aid instruments.

The Union of Entrepreneurs and Employers fails to find justification for further restrictions to the functioning of other areas of economic activity. There is no data that employees in the service and trade sectors showed a significant number of cases of infection, and thus that commercial and service points of sale were the source of coronavirus outbreaks or were also the place of infection for customers.

The Union calls for a roadmap of planned activities in the field of lifting industry restrictions and introducing possible restrictions on social life, based on predictable disease rates or on indices of healthcare efficiency. Both the society and entrepreneurs must have a clear and predictable picture of the upcoming weeks and months of the epidemic. Lack of such information will result in the reduction of economic risk taking, and as a result, in the inhibition of economic development, decrease in investment, and reduction of employment.

The actions undertaken by the government in the field of health protection must also be aimed at protecting the economy and jobs.

At the same time, the Union of Entrepreneurs and Employers is calling for a year-long moratorium on all kinds of new legal burdens and taxes that are being processed at the moment or have been adopted over the past year to ensure in these difficult times that the economy is predictable and stable. The current challenging period should be used for far-reaching systemic reforms, so as to create new favourable conditions for the development of the economy after the epidemic.

The government has not made thus far any efforts at all to implement systemic reforms in areas that have required addressing for years. Now, during the crisis, and in the years to come, hitherto deficits and the lack of bold reforms will become evident, for example, in the field of labour taxation, labour law, economic law, reduction and unification of VAT rates, increasing economic competitiveness, amendments to the social security system, or taking up demographic challenges. Meanwhile, the period of relative “unblocking” of the economy in the third quarter of this year was used for activities restricting the competitiveness of Polish businesses. These include plans to introduce or the introduction of the following: “sugar tax”, CIT on limited partnerships, “high five for animals” (an act including five objectives amending acts regulating animal welfare in Poland), restriction of competition on the pharmacy market or premiums on commission contracts. No actions have been taken to adapt Poland to new and upcoming social and economic challenges.

Bearing in mind all the above-mentioned considerations, the Union of Entrepreneurs and Employers appeals not only to refrain from the lockdown, but also to undertake actions of opposite character and unblock the closed sectors of the economy while maintaining strict sanitary regimes. If there is a real, data-driven need to introduce any restrictions on economic activity, the Union urges the government to present it in decision justifications in a clear and transparent manner. Moreover, the Union believes that 2021 will be the worst possible period for the introduction of new burdens, therefore we call for a moratorium of at least a twelve months on any new, unfavourable regulations for business.

 

See: 03.11.2020 The Union of Entrepreneurs and Employers calls for a stop to the creeping lockdown of the economy

 

Fot. geralt/pixabay.com

Warsaw, 27^th October 2020

 

ANTI-CRISIS SHIELD: INDUSTRY POSTULATES

 

INTRODUCTION

IN ADDITION TO PROTECTING JOBS, QUICK AID IS NECESSARY FOR INDUSTRIES AT RISK

The Union of Entrepreneurs and Employers prepared and presented last week the concept of a PLN 100 billion shield for employment, which is a response to the economic challenges related to the development of the coronavirus epidemic in Poland. However, we are aware of the fact that apart from a comprehensive programme aimed at protecting jobs in the economy, regulatory support is also needed, targeted at industries threatened by the epidemic. One should remember that the difficulties related to the development of the epidemic are not limited only to the financial losses resulting from bans or restrictions to business operations. Hundreds of thousands of people who are quarantined and subjected to epidemiological supervision are also employees, and the mode of providing some services, due to the need to introduce special sanitary standards, has changed dramatically.

The necessity to launch aid is unquestionable. At the same time, the epidemic and the crisis it causes will result in structural changes to the economy – these factors must be taken into account when designing any kind of intervention programme. Their goal cannot be to keep companies unable to adapt to the new reality afloat, but rather to support and help those entities that make an effort to survive. Thus, it is possible that the above-mentioned changes in the structure of the economy eventually will, despite temporary perturbations, increase productivity due to a better use of available resources.

THE AID ACT MAY PROVE INSUFFICIENT

The parliament has already received a parliamentary draft act introducing an aid package for industries particularly affected by the second wave of the epidemic. It seems that the basic assumptions of the act coincide with the approach described above – aid is targeted at industries in the worst situation and it is at the moment de facto minimal, i.e. making it easier for companies to survive a difficult time. Therefore, we get the impression that the government is proceeding cautiously in grading the aid – in the first place, it is proposed to introduce a standstill salary and exemption from social security contributions for several listed industries, as well as to extend the validity of the solutions provided for in the previous anti-crisis shields.

The approach adopted in the above scope seems reasonable (we will publish a separate position with regard to the presented draft law). However, one cannot rule out that the prolonged epidemic crisis will necessitate the launch of further actions. With this in mind, we consulted with trade unions associated within the Union of Entrepreneurs and Employers.

INDUSTRY RECOMMENDATIONS

Below we have listed a set of recommendations presented by individual industries. For the sake of clarity of the document, we divided thsee recommendations into general and detailed ones, the latter in turn for individual industries. We hope that the recommendations presented will prove useful when working on the next stages of help for industries.

GENERAL RECOMMENDATIONS

• The key assumptions of the PLN 100 billion shield for employment presented by us are valid;
• There is a need for automatic exemption from social security contributions (and provision of standstill benefits for employees) for all industries subject to restrictions going beyond DDM;
• The introduction of any restrictions on economic activities should be allowed only on the basis of rational, evidence-based argumentation;
• We maintain the necessity to launch liquidity tools differentiated depending on the situation: for companies subject to the restrictions beyond DDM, a working capital loan in the amount of up to 10% of the turnover for the previous year; for entrepreneurs whose turnover has decreased year-on-year by at least 25%, a partially repayable subsidy or a 100% long-term repayable loan;
• Moreover, it is necessary to introduce a number of general simplifications as listed below:
• elimination of barriers to the employment of foreign nationals, including, in particular, the acceleration of procedures for issuing work permits;
• withdrawal from new taxes and administrative obligations (a moratorium of at least 12 months on all kinds of additional burdens, such as the sugar tax or “the rain tax”);
• making labour law more flexible so that its provisions take into account numerous absences resulting from infections or quarantine, including in the scope of abolishing the limit of overtime;
• enabling self-regulation by appointing COVID-19 coordinators in the form of, for example, people responsible for health and safety in companies – they could become contact persons for Poviat Sanitary Inspectorates;
• the introduction of a mechanism for reimbursing employers for the costs of coronavirus tests carried out among employees in the form of deduction of these amounts from contributions to the State Fund for Rehabilitation of Disabled People or the Social Insurance Institution, PFRON and ZUS respectively;
• postponing the possibility of settling the loss in income tax for another year;
• considering the possibility of renegotiating contracts concluded with entrepreneurs by the Polish Development Fund as part of the support granted from the financial shield – companies with a significant decrease in revenues should be able to postpone the repayment of liabilities towards the Fund by one year;
• considering the possibility of launching targeted financial support for the adaptation of companies to functioning in the reality of an epidemic (micro-loans for retrofitting equipment for remote work or changing the model of service provision);
• making financial aid dependent not only on the industry, but also on the decline in turnover (the postulate is consistent with the programme of financial support for companies presented in the “PLN 100 billion shield for employment”).

DETAILED RECOMMENDATIONS

FOOD CATERING INDUSTRY

• Introducing a temporarily uniform rate of 5% VAT on all catering services – including the sale of non-alcoholic and low-alcoholic beverages (beer, wine, ciders) and with the prospect of setting a uniform rate of 8% after the pandemic;
• Introducing the possibility of distance sales of low-alcohol beverages and enabling takeaway sales of low-alcohol beverages to premises with a licence to sell alcohol on premises;
• General temporary exemption from social security contributions for entrepreneurs in the catering sector and their employees;
• Introduction of a publicly funded “standstill” for employees from the catering sector (specific standstill regulations for employees particularly at risk of severe coronavirus infection, i.e. seniors or disabled people, to be considered).

WASTE MANAGEMENT INDUSTRY

• Introduction of the possibility of directing the waste stream to other installations operated by the same entity in the event of the necessity to shut down or limit the operations of an installation due to COVID-19, provided it is technically and organisationally possible and provided that environmental protection standards are met;
• Enabling changes in the system or schedule of employees’ working time and ordering to work overtime, to be ready to work and to exercise the right to rest in a designated place;
• Amendments to §11 sections 1-4 of the Regulation of the Minister of Climate of 11^th September 2020 on detailed requirements for the storage of waste in the scope of storage of infectious medical waste and infectious veterinary waste as part of waste collection, including in terms of enabling the storage of collected medical waste or infectious veterinary waste in specialised refrigerated containers or refrigerated trailers, characterised by parameters ensuring compliance with all rigors and requirements related to waste collection, or in the scope of extending the storage periods for infectious medical or veterinary waste at specific temperatures;
• Restoration of solutions known from the first anti-crisis shield, granting voivodes special powers in the field of administration over waste management systems.

PHARMACY INDUSTRY

• Amendments to the draft act on the profession of pharmacist with regard to:
• amendment of the provision enabling the withdrawal of a licence to operate a pharmacy in the event of a breach of the pharmacist’s professional independence so that this sanction can be applied in the event of persistent or gross violations,
• deletion of the provision enabling the “immobilization” of a pharmacy, pharmacy outlet or pharmaceutical wholesaler in the event of “preventing the performance of tasks” by the pharmacy manager or the person responsible at the wholesaler,
• deletion of the provision on the role of the pharmacy self-government in assessing the warranty of a candidate for a pharmacy manager,
• deletion of the obligation to run a pharmacy or pharmacy outlet in a specific legal form from the catalogue of a pharmacist’s professional tasks,
• amendment to the scope of powers of a pharmacy manager so that it covers only substantive tasks, not strictly related to running a business and being the responsibility of the pharmacy owner,
• opening a catalogue of healthcare services provided by generally accessible pharmacies.

BREWING INDUSTRY

• Maintaining the current mechanism of calculating the excise duty on beer and keeping the excise duty rate unchanged;
• Enabling (permanent) deduction of excise duty on beers past best before date (solution compliant with EU law and applied in several member states; in Poland, only a temporary option to deduct excise duty on beers after expiration date has been introduced);
• Revision of the Act on excise duty and of the Tax Ordinance through in particular:
• clarification that excise permits are not revoked in the event that a taxpayer submits a collateral for the implementation of decisions resulting in tax arrears,
• clarification of the rules for submitting collateral for the enforcement of tax decisions at the taxpayer’s request, also before issuing such decisions, and withholding secured decisions,
• allowing the possibility of issuing certificates of non-arrears in taxes in the event that the taxpayer submits a collateral for the implementation of tax decisions,
• permitting the authorities to suspend the proceedings in the event that the outcome of the case could be influenced by the outcome of another ongoing administrative, court-and-administrative or court proceedings.

PHARMACEUTICAL INDUSTRY

• Introducing the priority for coronavirus testing of critical workers involved in the manufacture and distribution of drugs;
• Taking into account the specificity of the pharmaceutical sector in the course of works on the amendment to the act on the national cybersecurity system, both in terms of respecting the security systems built by the entities and the risk of an excessive narrowing of the possible catalogue of automation and industrial electronics manufacturers, whose products are used in drug production lines;
• Introduction of a support system for domestic drug producers under the Reimbursement Mode of Development.

FOOD INDUSTRY

• Unifying the practices of state authorities, including, in particular, sanitary inspections related to production safety;
• Enabling companies from the food industry, due to their special role in the economy, to use the inventory of personal protective equipment accumulated by the Material Reserves Agency in the event of problems with the purchase of these products on the market;
• Increasing the amount of exemption for cards and meal vouchers for employees from the Social Insurance Institution to 25% of the minimum wage;
• Creation of “corridors” at border crossings for employees of food industry facilities, as well as drivers carrying food products and loads necessary to maintain the continuity of food production, with special priority of passage for raw materials and perishable foods;
• In the event of significant difficulties in accessing logistics and transport services, priority should also be given to the entire food production and distribution chain, also within the framework of domestic traffic;
• Abolishing the Sunday trade ban;
• Withdrawal from the ban on breeding fur animals and the ban on ritual slaughter;
• Amendment to the provisions of the regulation on the restrictions related to the introduction of the state of the epidemic in the scope of clearly indicating that the restrictions on the number and age of people present on the premises of a retail outlet do not apply to people serving stores, including sales representatives of suppliers;
• Providing the sectors of food producers and processors the status of an element of critical infrastructure along with their entire supply chain, so that they are not subject to any bans or restrictions on transport, access to electricity or water.

 

27.10.2020 Anti-crisis shield: industry postulates

 

Fot. geralt / Pixabay.com

Warsaw, 22^nd October 2020

 

100-BILLION SHIELD FOR EMPLOYMENT
Proposals of support for companies during COVID 2.0 by the Union of Entrepreneurs and Employers

 

The second wave of the epidemic in Poland took on a scale that was still hard to expect several weeks ago. The increasing number of infections and the healthcare system reaching its limits of efficiency generate a sense of danger, in view of which the society naturally limits its activity and mobility. Therefore, due to the dynamics of the epidemic, the demand for certain services decreased organically. This effect was intensified by further restrictions introduced by the government. In addition to the standard sanitary regime encompassed by the DDM strategy (distance, disinfection, masks), restrictions have been introduced to the operation of catering establishments, the fitness industry, or the industry behind the organisation of events (interestingly enough, also those organised online). While only a few weeks ago, the government clearly declared that there would be no second shutdown of the economy, we can already conclude that we are operating in a creeping lockdown, which – in the light of the recent, slightly revised declarations of decision-makers – may soon become an actual lockdown.

Bearing this in mind, it has become necessary to prepare a new aid package for companies affected by restrictions and limitations. The key goal should be, as in the case of the hitherto existing anti-crisis shields, the protection of jobs, therefore we decided to call the package proposed by us “the 100-billion shield for employment”.

According to the available data, it is possible to implement this package without the need to exceed the debt limits resulting from the present framework for aid programmes shielding the economy against the negative effects of COVID-19. Out of the PLN 270 billion limit allocated to the launch of anti-crisis measures, PLN 145 billion have been used so far (for example: the Polish Development Fund has allocated PLN 60 billion out of the PLN 100 billion it has at its disposal for the implementation of the “financial shield”). Even assuming that some of the remaining money will be spent by the end of this year, it is safe and prudent to assume that, within the adopted limits, an amount of approximately PLN 100 billion will still be available.

Below, we present a comprehensive package of aid solutions that take into account the possibilities of allocating these funds – not limited, however, to financial support only. We have divided the recommendations into three sections: regulatory security, financial security, and security for the next year.

REGULATORY SECURITY

We believe that the exceptional situation in which we find ourselves creates the need to ensure strict regulatory security for employers, and thus also to adapt regulations to the conditions in which companies are operating and the challenges they have to face. With this in mind, we postulate the following measures:

• a temporary reduction of the VAT rate on products and services from all “socialising sectors” (food catering services, hospitality industry, fitness centres, beauty salons etc.) to the minimum level of 5%;
• exemption from social security contributions for all entrepreneurs and employees in industries subject to restrictions exceeding the DDM standard (including, among others, the event, catering, hotel, fitness, entertainment, and art industries) for the duration of these restrictions;
• basing any and all business activity restrictions to be introduced on data and objective argumentation. We find no justification for banning the fitness industry from operating, or for the restoration of “hours for the elderly” – therefore, we call for those restrictions that do not meet the above-mentioned requirements to be lifted and demand that these requirements are respected each time the list of restrictions is reviewed;
• the introduction of a 12-month-long moratorium on new taxes and regulatory burdens. Poland belongs to the infamous vanguard of OECD countries and decides to introduce new levies in the face of the crisis – in our view, any initiative of this kind ought to be postponed by at least 12 months;
• accepting the assumption that Poland cannot afford another lockdown. Consequently, the policy of fighting the virus should be based on strict adherence to the sanitary regime (DDM), not on shutting down more sectors of the economy.

FINANCIAL SECURITY

As mentioned in the introduction, a growing number of industries has to face not only a demand lowered by the epidemic, but also the gradually increasing number of restrictions going beyond the DDM regime. There are certain sectors in which we can already speak of an actual lockdown. Accordingly, in order to protect jobs, it is necessary to quickly mobilise additional aid.

A part of the PLN 100 billion earmarked for the aid package during the second wave of the epidemic will be used to implement some of the regulatory demands (exemption from social security, VAT reduction). The remaining funds should be allocated to the mobilisation of the following instruments of direct financial support:

• for entrepreneurs from industries subject to restrictions exceeding the DDM regime: working capital loan in the current account, granted in the amount of up to 10% of turnover for 2019, guaranteed by the Polish Development Fund. The instrument ought to be 100% repayable (including the preferential interest rate on the loan). Access to the instrument should not be subject to any additional requirements, that is, it should be available to all entrepreneurs from the above-mentioned industries, regardless of employment, current turnover etc.;
• for all entrepreneurs whose turnover for September and October decreased year-on-year by over 25%, we propose two instruments:
• a subsidy granted by the Polish Development Fund up to 10% of turnover for 2019, which is an instrument analogous to the current “financial shield” programmes, that is, partially repayable. We propose that it should be possible to write off 75% of the granted amount, provided that at least 80% of jobs at the date of granting the support are maintained;
• long-term (10- and 15-year) loans guaranteed by the Polish Development Fund – granted in the amount of up to 10% of turnover from 2019, 100% repayable, with preferential interest.

SECURITY FOR THE NEXT YEAR

The development of the COVID-19 epidemic has so far been characterised by a high level of uncertainty. We do not fully know how the virus operates, nor how it might mutate. Therefore, one should also prepare for a worst-case scenario assuming a third wave of the epidemic in the spring of 2021. It seems that the proposed budget draft for the next year does not provide for the creation of an adequate “financial overlap” for the possible launch of additional support measures for the labour market. Taking this into account, we call for a revision of social spending planned for next year. Unfortunately, the programmes introduced at the peak of the economy are not suited for the crisis conditions in which we will find ourselves next year. In consequence, we believe that extending the 500+ programme to the first child without establishing an income threshold should be dropped, as well as the additional, 13^th and 14^th retirement benefits. The “good start” school starter kit should also be liquidated. The revision of the policy in the above scope will allow for the creation of a “financial cushion” in the amount of almost PLN 45 billion, which in the event of another wave of the epidemic can be quickly activated in order to save jobs.

 

22.10.2020 The 100-billion shield for employment – Proposals of support for companies during COVID 2.0 by the Union of Entrepreneurs and Employers

Warsaw, 23^rd September 2020

 

It’s worth running a business.
According to the ZPP Portrait of an Entrepreneur survey, as many as 80% of business owners and entrepreneurs, in spite of difficulties, are satisfied with their career

 

The Union of Entrepreneurs and Employers, known in Poland as ZPP, conducted the largest in Poland, comprehensive study of the Polish sector of small and medium-sized enterprises that covered a representative sample of companies employing from 1 to 250 employees. The survey’s objective was to find out about the motivations, attitudes, and moods of Polish entrepreneurs.

The vast majority of respondents (80%), regardless of their reasons and circumstances, positively assessed their decision to start a business (41% assessed it positively, 39% – rather positively). Only 10% of entrepreneurs are not satisfied with their decision to start a business. Statistically speaking, dissatisfied respondents are slightly more often owners of companies from the trade sector, people with lower education (primary or vocational), but also people whose financial situation is not great – they have little to no savings, while at the same time have loans and outstanding credit.

Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers, comments: “We can be proud of Polish entrepreneurs, because they do really well even in such difficult circumstances, which is also reflected in the recent performance of our economy. Polish companies are moving forward despite the lack of capital and worse conditions for running a business compared to most EU countries. I dare not think how much faster we could be developing if only we managed to untap all the energy and entrepreneurial spirit blocked by thick reams of paper covered in regulations or by the politicians’ obsessive desires to constantly amend the law, control everything and their chronic distrust of business leaders.

Among the most burdensome disadvantages of being an entrepreneur as well as barriers to running a business, the respondents named:

• high labour costs and social security premiums – 53% of respondents;
• irregular salaries – 41% of respondents;
• financial and legal responsibility – 40% of respondents;
• high taxes – 40% of respondents;
• high stress levels – 37% of respondents;
• excessive obligations related to bureaucracy – 23% of respondents;
• legal instability – 22% of respondents.

Passion and escape from a 9-to-5 job, above all else

As many as 37% of respondents admitted that the main reason for starting a company was the desire to fulfil their passions, whereas 25% of entrepreneurs never wanted to work full-time and were looking for an idea for their own business. By way of comparison, for 23% of respondents, the decision to set up a business was impacted by the economic situation, while in the case of 10% of entrepreneurs surveyed, this was an order from their former employers.

Professor Dominika Maison, the author of the study and the report, comments: “Observing the changes taking place among Polish entrepreneurs for years, we can see that their motivations for starting their own business are evolving along with the generational changes. It is no longer just a desire to earn a lot of money or be a great entrepreneur with hundreds of employees. Especially among young people, what prompts them to abandon safe full-time work and start their own business is the desire for self-fulfilment and freedom, and to decide about their own fate, even at the cost of sometimes lower salaries or the uncertainty and risk related to running their own, sometimes small and niche business.”

The ZPP Portrait of an Entrepreneur survey was conducted in February 2020 on a representative sample of Polish entrepreneurs. A total of 678 respondents running a sole proprietorship and business owners employing from 1 to 250 employees shared their views.

 

Infographics

• Satisfaction with the establishment of a company
• Reasons for starting a business
• The company’s period of operations
• Perceived advantages of running a business
• Perceived disadvantages of running a business
• Perceived barriers to running a business

 

About the ZPP Portrait of an Entrepreneur survey

ZPP Portrait of an Entrepreneur is the largest in Poland, comprehensive study of the Polish sector of small and medium-sized enterprises. It was conducted in February 2020 on a representative sample of Polish entrepreneurs. It included a total of 678 respondents conducting sole proprietorship and business owners employing from 1 to 250 employees.

The objective of this study was to learn about the motivations, attitudes, and moods of Polish entrepreneurs. As part of the research project initiated by the Union of Entrepreneurs and Employers, also the first comprehensive segmentation study of companies from the SME sector in Poland will be developed, consisting in the selection of groups of entrepreneurs with different approaches to running a business. The study was carried out in February 2020 using the CAWI (Computer Assisted Web Interview) method on the Ariadna online research panel under the supervision of Professor Dominika Maison.

 

About the Union of Entrepreneurs and Employers

Founded in 2010, the Union of Entrepreneurs and Employers, known as ZPP, is the fastest growing and most active organisation of Polish entrepreneurs. Its members include over 52,000 companies, 15 regional and 20 industry organisations. Every year, the Union publishes over 30 reports, studies and films as well as over 100 legislative comments, positions and opinions. It organises numerous debates and meetings. Its goal is to make Poland the country with the best business conditions and tax system in Europe. ZPP is an apolitical organisation that supports the free market and common sense, regardless of political affiliations. Moreover, the Union is a member of the Social Dialogue Council and has a representative office in Brussels.

Warsaw, 1^st October 2020

 

Busometr: Investments are sinking, but the labour market is still in good shape

 

The “Busometr” index of business mood for the 2^nd half of 2020 amounted to 42.4 points (a drop from 44.5 points in the previous half-year) which means that entrepreneurs’ moods during the COVID-19 epidemic are worsening. Investments suffered hardest, while the labour market still enjoys a surprisingly good mood.

The drop in entrepreneurs’ moods has been recorded successively since the record-breaking 2^nd half of 2018, when the “Busometr” index amounted to 56.8 points. However, it is impossible to ignore the fact that the sentiment survey for the 2^nd half of 2020 took place in very particular conditions of the epidemic and economic perturbations related to it.

“We expected business moods to worsen,” explains Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “What may be surprising is that the difference caused by COVID is relatively small. We have seen regular declines since mid-2018 when the economy was at its peak. The epidemic caused this trend to continue rather than accelerate significantly.”

The analysis of individual components of the Busometr index suggests that entrepreneurs’ sentiments vary depending on the specific part of the economic reality being in question.

Exactly 50% of respondents believe that the economic situation will deteriorate in the months to come. Owners of micro-enterprises are most pessimistic about the future – in their case, the component “Economic situation” is significantly lower than for small, medium and large companies.

The lowest in history result of the “Investments” component is certainly something to be worried about. The index in this respect amounted to 29.5 points compared to the record-breaking 53.7 points in the 2^nd half of 2018. Almost 70% of companies declared that they plan no investments at all.

“The problem with investments in Poland is of a structural nature, but the uncertainty related to COVID and the constantly changing regulations only deepen it,” stresses Jakub Bińkowski, the Union’s Director of the Law and Legislation Department. “The lowest result of the ‘Busometr’ index in history shows that a policy adjustment is necessary in this area.”

The Union of Entrepreneurs and Employers calls the government to abandon the incessant amendments to the conditions of running a business in Poland. The price of regulatory risk is rising rapidly, and companies are afraid to invest. One has to call it by its name: if the government does not calm down in terms of changes, there will be no investment. It will get even worse.

The following are the government’s surprises from only the last two months:

• the sugar tax;
• CIT for limited partnerships;
• rain tax;
• the announcement of the excise tax on used cars;
• advertising tax;
• the announcement of a digital tax;
• the ban on breeding fur animals and ritual slaughter;
• a restrictive implementation of the audio-visual directive.

In all this chaos, it is extremely difficult to plan and run any business activity. We call for reflection. There is no obligation to run business activity in Poland.

Considering the conditions in place as a result of the epidemic, the level of the “Labour market” component is surprisingly positive – 14% of companies plan to increase wages and employment, while job and wage cuts are planned by 7% and 5% of companies, respectively. The results of the survey seem to confirm the thesis that Polish entrepreneurs are not afraid of the negative effects of the pandemic and are trying to maintain employment.

 

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Busometr ZPP – the Index of Economic Mood in SME Sector is an economic index showcasing the level of optimism in small and medium enterprises, and their plans for the next six months.

Three components affect the index: (1) the economic situation, (2) labour market (remunerations and employment) and (3) investments.

A value within the range of 0-100 is assigned to each component.

The Union of Entrepreneurs and Employers along with Maison&Partners conduct the research among a representative group of small and medium enterprises (up to 250 employees). Busometr ZPP is published every six months. The sample size is N = 600 respondents from the SME sector.

The survey is carried out since 2011.

 

01.10.2020 Busometr ZPP. Forecast for the 2^nd half of 2020

Warsaw, 2^nd October 2020

 

CIT on limited partnerships will increase the burden on tens of thousands of Polish entrepreneurs

 

• Covering limited partnerships with CIT will lead to a significant increase in taxes for nearly 73,000 Polish entrepreneurs.
• The most thriving businesses will suffer the most, as they will not have the chance to benefit from the lower 9% CIT rate, and the actual taxation of the shareholders of these companies will increase to 34-38% instead of the current 19-23%.
• Only 1% of limited partnerships have foreign partners, and their share in the total number of partners of limited partnerships amounts to 0.4%, which means that the possible risk of a tax-free transfer of profits abroad is marginal.

– according to the report presented at the joint conference of CRIDO, the Union of Entrepreneurs and Employers and InfoCredit.

 

Dramatic consequences for business

In connection with the planned tax changes (as of 2^nd October 2020), there will be a significant increase in the tax rate for nearly 73,000 Polish entrepreneurs. Approximately 75% of companies with lower turnover will be able to benefit from the 9% CIT rate instead of the hitherto 19%. However, as many as a quarter of limited partnerships responsible for 90% of revenues generated by these businesses (i.e. nearly PLN 300 billion annually!) will pay 19% CIT. Effectively, the tax rate on the partners of these companies, mainly Polish entrepreneurs, will increase to 34% or, in the case of people paying the solidarity levy, to 38%.

Even Estonian CIT won’t help

The new tax benefit in the form of the so-called Estonian CIT does not include limited partnerships. Even assuming that some entrepreneurs will decide to transform their business into a capital company (LLC or joint-stock), others will probably remain in the current form. Apart from the preferential tax regime, this form of activity is popular, in particular, among entrepreneurs operating in the trade and service industry, as there is no capital expenditure which is a condition for using this form of taxation.

Limited partnerships are not widely used for international tax optimisation

Contrary to the justification of the proposed changes, the data do not indicate that limited partnerships are used in international tax optimisation schemes. In Poland, approximately 43,000 limited partnerships conduct active business activity. According to the analysis of CRIDO experts based on data from the InfoCredit database, 92% of limited partnerships are businesses of natural persons from Poland. As many as72,705 Poles run their businesses in this form.

Should one compare, only 0.4% of partners in limited partnerships in Poland are foreigners. The first place is taken by Germany (151 partners) for whom this form of business activity is quite commonplace and is indicated as one of the reasons behind Germany’s economic success. Our Western neighbour is followed by Luxembourg (113 partners), Cyprus (41) and the United Kingdom (39).

The whole country and many industries are in question

Limited partnerships are scattered all over the country. Most of them can be found in the following voivodships: Masovia (11,290), Greater Poland (5611), Lesser Poland (4744) and Silesia (3792). They operate in various sectors, most of them are involved in industrial processing, construction, and trade. Many transport, logistics, and catering companies operate in this way. This form has allowed many Polish entrepreneurs to develop, who with a “flair” for running business could at the same time limit the risk for their family.

“The combination of a 19% single taxation rate with reducing the risk of running a family business is a positive stimulus and motivating factor for the development of entrepreneurship. The example of Germany, whose economic power grew out of family businesses run in the form of limited partnerships, proves this concept to be right. The planned double taxation of limited partnerships will not only be a negative signal for Polish entrepreneurs, but will also put domestic companies in a worse market position in relation to their foreign competitors. Because considering the so-called Parent-Subsidiary EU directive, a foreign investor from the EU will pay no more than 19% of income tax,” comments Mateusz Stańczyk, Partner at CRIDO.

“Covering limited partnerships with CIT is a bad idea. The data do not indicate that these companies were entities used for international optimisation schemes. They are, on the other hand, an attractive form of business for Polish, dynamically developing businesses. It should be emphasised that this is yet another proposal to increase the taxes to emerge in a relatively short time. Meanwhile, the tendency of entrepreneurs to invest is, according to our research, the lowest in years and it is not without reason. Multiple changes in regulations, the sudden introduction of new levies, the lack of elementary legal security for companies are the main reasons why the investment rate in Poland is far from the 25% GDP expected by the Strategy for Responsible Development,” claims Jakub Bińkowski, Director of the Union’s Department of Law and Legislation.

“Today, more than ever before, any proposal to change to the tax system should also be analysed in the context of employment. Greater burdens for tens of thousands of Polish entrepreneurs may mean a diminished willingness to create new jobs or keep the existing ones. InfoCredit will soon conduct a survey among entrepreneurs so that they can assess the proposed changes in taxation in the context of employment and their market opportunities. We will share the results of this survey with you in October. For many months now, the InfoCredit index has been signalling that as the number of jobs is decreasing, the number of sole proprietorships is increasing. And these have a much smaller ability to achieve market success than companies with an established position,” says Jerzy Wonka, Development Director at InfoCredit.

 

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About the analysis

The above analysis was carried out on the basis of information from InfoCredit databases. For the purposes of this report, experts from InfoCredit and CRIDO studied the data and analysed approx.. 43,000 limited partnerships that actively conduct business activities, including 26,462 which published financial statements for 2019 and / or 2018, reporting revenues totalling approx. PLN 330 billion annually. The available data made it possible to identify the shareholders of approx. 41,500 limited partnerships.

 

02.10.2020 Limited partnerships in Poland – data analysis

 

Fot. stevepb / pixabay.com

Warsaw, 13^th October 2020

 

Necessary tightening measures in the customs and VAT system for foreign e-commerce vendors

 

The Union of Entrepreneurs and Employers, in its latest report, analysed the customs and tax system in terms of shipments from non-EU e-commerce vendors. The Union notes in its study that the e-commerce sector is gaining importance in the global, and thus also Polish economy. This phenomenon is influenced, among others, by the coronavirus epidemic. According to the Union, this market in Poland will grow in 2020 by 20%.

E-channels allowed domestic producers to survive during the epidemic crisis by filling the gaps in in traditional sales channels. By 2025, e-sales will account for 20% of the market. In other words, who will not sell online in 5 years will lose every fourth customer – claims the Union of Entrepreneurs and Employers.

“Poland is a large and attractive market for e-commerce platforms and vendors. Poles en masse fell in love with online shopping. However, the playing field for retailers and consumers is uneven. There are no equal rules of competition between Polish and Chinese e-commerce. Chinese companies have a number of domestic public support instruments at their disposal and make use of the gaps in the Polish system of public levies in a highly non-competitive manner,” says Marcin Nowacki, Vice-President of the Union of Entrepreneurs and Employers.

“Naturally, we all want to pay as little as possible for goods. It is in all our interests to ensure the greatest possible variety of products, fair competition, and diversity of entities operating in the e-commerce industry. At the same time, the rules of operation in this sector must be equal and transparent,” adds Piotr Palutkiewicz, the Union’s Deputy Director of the Law and Legislation Department.

The Union of Entrepreneurs and Employers has presented a number of recommendations aimed at ensuring fair and high competition in the e-commerce industry. The solutions include, among others the need to introduce an IT system for the payment of customs duties under e-administration and its integration with e-commerce platform systems.

“Simultaneously, thanks to the introduction of a modern and customer-friendly system for paying customs duties, it will be easier to control, as well as pay taxes and custom duties for items shipped from non-EU markets. As a result, the State Treasury may gain over PLN 2 billion annually,” adds Marcin Nowacki.

The Union also indicates that EU funds from the National Reconstruction Plan after the COVID-19 crisis should be used to introduce solutions in the field of e-administration, customs, and tax.

“There is also work to be done by Polish authorities related to the implementation of EU rules into the Polish legal system regarding the principles of concluding contracts over distance and effective enforcement of standards in force in the Community,” adds Piotr Palutkiewicz.

The authors of the report also point to further necessary actions, such as the appointment by non-EU vendors of a representative in the European Union who will be responsible for the proper enforcement of consumer regulations, or the undertaking by Poczta Polska (Polish Post) of actions to help Polish exporters sell products on non-EU markets (especially in China) via the e-commerce channel. This would also allow Poczta Polska to generate additional revenues. The Union also calls for the initiation and active participation of Poland in the reform of the Chinese postal charges system in force under the Universal Postal Union. This action should be carried out both on the level of the European Union and in other international circles.

“As a result of implementing our recommendations, unfair competition on the part of Chinese vendors and e-commerce platforms would become limited. The protection of Polish consumers would be ensured at an equal level, regardless of the location of the purchasing platform. Owing to this, the competition of Polish and foreign vendors and online sales platforms would take place on an equal basis, and Polish entities operating in the e-commerce sector would have equal opportunities to expand on international markets,” concludes Nowacki.

 

See report: 13.10.2020 Necessary tightening measures in the customs and VAT system for foreign e-commerce vendors

 

Fot. rupixen.com / Unsplash.com

Warsaw, 12^th October 2020

 

Union of Entrepreneurs and Employers on a strategy to combat the second wave of the epidemic: radical organisational changes and compliance with sanitary restrictions are needed, we cannot afford another lockdown

 

The number of coronavirus infections is growing exponentially, data on occupied beds and respirators are becoming increasingly worrying. Subsequent changes in tactics announced at press conferences raise the question whether the country has managed in recent months to prepare for the second wave of the epidemic. According to the experts of the Union of Entrepreneurs and Employers, the lack of a clear strategy and effective procedures show that institutions in charge of Polish healthcare squandered the virus’s “dormant” period.

“One can assume that the Ministry of Health was busy “putting out fires” in March and April, but the period since May was the time to reconsider the course of action for the upcoming autumn and to equip the appropriate institutions. It was known, after all, that the second wave of the epidemic would come,” claims Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “We have been observing the total chaos and helplessness of institutions for several weeks. The procedures either don’t exist or they don’t work, we are testing a lot less people than we should, and the supply of beds and respirators is shrinking. The Minister of Health failed to prepare a real strategy to fight the coronavirus, because it is difficult to call the document published on the Ministry’s website a strategy.”

The basic goals of the Union’s strategy to combat COVID-19 are to reduce virus transmission through mass testing, to secure the maximum possible efficiency of the healthcare system and to ensure business continuity. According to the Union’s experts, despite the declarations of politicians that closing the economy again is out of the question, the restrictions introduced consistently affect business to a great extent and in practice mean a progressive lockdown.

“The Polish economy suffered enormously due to the lockdown. For the first time in years, we have recorded growth in GDP, the budget deficit has increased to a record size, we have spent tens of billions of zlotys on the necessary aid programs,” emphasises Jakub Bińkowski, the Union’s Director of the Law and Legislation Department. “We spent that money to buy the time needed to prepare the healthcare system to fight the virus. This was not done and now the costs of the sanitary regime are again being transferred onto business. It is unacceptable.”

The strategy presented by the Union of Entrepreneurs and Employers assumes far-reaching changes in the model of combating the epidemic. The Union’s experts call for the creation of a specialised agency, similar to the Polish Development Fund PFR, reporting directly to the prime minister, which would take over administrative and managerial tasks. From the medical point of view, the strategy is based on the recommendation of mass testing (currently Poland ranks 84^th in terms of the number of tests per million inhabitants globally) and the strict enforcement of key sanitary restrictions resulting from the current broadly accepted consensus DDM (distance – disinfection – masks). At the same time, the Union is against any restrictions on running a business; the Union has consistently considered it appropriate to eliminate the yellow zone throughout the country.

An integral part of the strategy is the case study on the strategies to combat COVID-19 implemented in Sweden and Germany. The experiences of these countries are not conclusive, yet they provide useful insight into possible effects of various strategic models.

“Sweden ‘went rogue’ and, being in the European avant-garde, introduced no particular restrictions during the first wave. The country paid a high price for this in terms of economics, but above all, in terms of health, reporting a very high number of infections and deaths,” says Kamila Sotomska, Analyst at the Union’s Department of Law and Legislation. “The country has been going through the second wave of the epidemic relatively mildly so far, but there’s no saying whether this is the result of an approach adopted earlier this year. Also Germany seems to be coping with the virus well. This is obviously a consequence of high healthcare expenditure, but also of mass testing. It is an approach in this respect that we propose to replicate in Poland.”

“It must be said as it is: the authorities in whose competencies it was to prepare the strategy of combating COVID-19 in the autumn did not do their job,” concludes Cezary Kaźmierczak. “Therefore, we have done this work instead and we hope that the approach to fighting the epidemic will be modified rapidly. We have less and less time to respond to the increasing number of infections and to prevent our healthcare system from collapsing.”

 

See the study: 12.10.2020 The Strategy to Combat COVID-19: Recommendations of the Union of Entrepreneurs and Employers