Brussel, December 05, 2023

 

Digital Single Market barriers continue limiting the SME’s potential for growth – conclusions from the debate of the Union of Entrepreneurs and Employers.

 

The advancement of digitisation has significantly benefited the European economy. Despite this, the Digital Single Market has yet to transition from an aspiration to a tangible reality. Over the forthcoming years, both European institutions and Member States must enhance their efforts to remove all regulatory barriers and establish a favourable digital environment for the growth of European SMEs – was the conclusion of the Working Lunch titled “Digital Single Market Future & Opportunities for SMEs”, that took place on December 5th in Brussels.

This year, we celebrated the 30th anniversary of the EU’s Single Market as a catalyst for growth, bolstering Europe’s economic and political influence on a global scale. While European member states’ political backgrounds may differ, we hold a unified vision for a Single Market that fosters increased business opportunities through trade, generating new jobs. The European Commission projected that eliminating barriers within the Single Market for goods and services could result in a potential gain of €713 billion by the end of 2029.

Technological advancements have created the need to broaden it and build the European Digital Single Market. The strategy officially outlined in May 2015 focuses on unlocking digital perspectives for individuals and businesses while strengthening Europe’s position as a global frontrunner in the digital economy.

Digital Single Market Future & Opportunities for SMEs

Now more than ever, digitalisation plays a crucial role in building Europe’s economic resilience. This is why The Union of Entrepreneurs and Employers (ZPP), in partnership with Member of the European Parliament Kosma Złotowski, brought together European institutions representatives and leading organisations to showcase and brainstorm on the Digital Single Market strategy and its role in developing the SME sector.

The discussion featured a group of speakers that included Dr Horst Heitz, Executive Director, SME Europe. Chair of the European Steering Board, SME Connect; Maria Grapini, Member of the European Parliament, S&D Group; Michał Kanownik, President, Digital Poland Association; Karol Kasiński, Public Policy Manager, Amazon; Vincenzo Renda, Associate Director for Digital Transformation Policy, Digital Europe and Filip Świderski ECR Advisor.

The discussion began with opening remarks from MEP Maria Grapini, who highlighted that the full potential of the Digital Single Market has yet to be delivered. She underlined that the Single Market is far from being completely in place in many areas, limiting its growth due to regulatory burden. 

MEP Kosma Złotowski highlighted in commentary to the report the crucial importance of small and medium-sized enterprises to the Polish economy. He focused on the main challenges the Digital Single Market imposes from the SME’s perspective.

“The SME sector in Poland has been struggling for years with excessive bureaucracy, overregulation, and restricted access to financing from EU funds. The crises that have hit Europe in recent years  and the unreasonable pace of the energy transition imposed by Brussels have burdened companies with additional costs.  In addition to the chaos it has caused in the economy, the pandemic  has become an accelerator of digital transformation and made businesses face the need to adapt to the demands of this revolution. It is this vulnerability to crises and the crucial importance  of small and medium-sized enterprises to the Polish economy that makes the SME sector require special treatment when creating new laws and regulations in all areas’’ commented ECR MEP Kosma Złotowski,  on the report “The Digital Single Market and its Future in the Context of Development Opportunities for the Polish SME Sector”

During the event Paulina Szkoła, Digital Forum Director presented the key findings from the report published by the Union of Entrepreneurs and Employers, “The Digital Single Market and its Future in the Context of Development Opportunities for the Polish SME Sector”. The report discusses the strategic, regulatory and economic scenario that the European Digital Single Market has been generating for small- and medium-sized companies and the barriers that hindered it from growth.

As the report states, the advancement of the Digital Single Market has driven favourable regulatory changes, stimulating cross-border business expansion and benefiting consumers. Though Polish SMEs are tapping into its potential, obstacles endure. Despite progress in unified trans-border e-commerce laws, companies face multiple challenges due to overregulation, inconsistent implementation of common regulations and impediments to exchanging services and goods. A unified, comprehensive strategy is essential to fortify the EU’s digital economy.

‘’The establishment of the Single Market is undoubtedly one of the most outstanding achievements of a united Europe, although it remains an unfinished project in practice. Technological advancements, new economic sectors, business models, and sales channels, such as the dynamically evolving e-commerce sector, introduce new barriers and associated regulatory challenges. These challenges are particularly burdensome for SMEs, which constitute 99% of all entrepreneurs in the EU, providing two out of every three jobs in the private sector while accounting for over half of the total value added’’ – commented on the report Mariusz Mielczarek, Regional Director CEE, Public Policy, Amazon.

The report also aims to inspire the Polish Government to push for an ambitious Digital Single Market agenda during its presidency in the Council of the European Union, which will be held in the first half of 2025. Michal Kanownik, President of the Digital Poland Association and Board Member of Digital Europe, shared his recommendations with the Polish representatives:

“The actions of EU countries, including Poland, in developing the Digital Single Market should primarily support achieving goals set by the European Commission in the policy programme “Path to Digital Decade”, whose foundation is the digital transformation of businesses. According to the framework, by 2030, more than 90% of SMEs should reach at least a basic level of digital intensity, and 75% of EU companies are expected to use Cloud, AI, or Big data. While these are highly ambitious goals, they are achievable under one condition – EU-designed regulations should support the development of modern technologies rather than create unnecessary barriers. Over-regulating certain areas related to digitisation poses a risk of limiting innovation potential, making it challenging for Europe to compete in this field with the United States or China. It will be a significant challenge for the upcoming Polish presidency in the EU Council to maintain the right balance between regulating the digitalisation sector and addressing the needs of innovative businesses and citizens“.

The full report is available HERE

Warsaw, September 27, 2023

 

The Union of Entrepreneurs and Employers presented the 2023 Economic Awards!

 

The 2023 Economic Awards of the Union of Entrepreneurs and Employers were awarded at a gala evening on Wednesday, 27^th September this year. During the ceremony, the Union honoured businesspeople and companies that achieved considerable successes in the field of entrepreneurship or actively supported Polish entrepreneurs. Awards were presented to the best journalist, economist, an organisation for a project, as well as to selected companies.

Among the invited guests, there were representatives of the media, the business world, central government and local authorities. Friends and members of the Union of Entrepreneurs and Employers also attended the gala.

During this event, the Union presented special awards to outstanding public figures. The winners included:

• Public Sector Manager of the year 2023: Beata Daszyńska-Muzyczka. She received the award for effectively managing an institution that supports and finances a significant number of major development projects in Poland. She heads the bank that played an important role in Poland’s battle with the crisis related to the COVID-19 pandemic – Bank Gospodarstwa Krajowego.
• Journalist of the year 2023: Krzysztof Jedlak. Prize PLN 25,000. For years, “Dziennik Gazeta Prawna” has remained a key opinion-forming specialist media title for people interested in law, economics and current political events. The laureate runs a newspaper providing data and knowledge to decision-makers, opinion leaders, and business representatives.
• Organisation for a Project of the year 2023: Fundacja Forum Konsumentów (Consumer Forum Foundation) – for the project “Żyj oryginalnie” (“Live originally”). Prize PLN 25,000. Protection of intellectual property rights is one of the key elements of a market economy. The laureate’s project disseminates knowledge about risks arising from purchasing counterfeit products and provides information how to distinguish fakes from original items.
• Economist of the year 2023: Professor Marcin Piątkowski. Prize PLN 25,000. This year’s laureate in the category was recognised for his constant and substantive advocacy of Polish economic success stories worldwide.

ECONOMIC AWARDS

During the gala, awards in the following categories were also presented to leading representatives of the Polish business community:

• Dynamic Development of the year 2023: Symfonia Sp. z o. o. Digitising a company is one of the best ways to boost efficiency. Symfonia has been offering modern ERP systems for years, consistently maintaining a double-digit annual revenue growth rate.
• Innovative Company of the year 2023: Uber Polska. The emergence of innovative applications enabling passengers to order a ride revolutionised the market and introduced real competition. Being a pioneer, the company remains the market leader and continues to develop its portfolio of services.
• Employer of the year 2023: EWL. The laureate in this category is the EU’s largest global mobility platform specialising in hiring employees from abroad, present on the market for over 16 years. Over the years, the company has supported more than 1,600 employers in Europe connecting them with over 150,000 employees. It actively participates in labour market research in cooperation with the University of Warsaw – thus far, the partnership bore fruit in the form of 16 reports on European labour markets and employee mobility.
• SME of the year 2023: Zakłady Mięsne Karol. The meat-processing company is a family-owned business striving for perfection and looking for novel solutions. Their unique approach to employees and ability to innovate sets an example for other companies to follow, inspiring them to create products and services of the highest quality.
• Socially Responsible Company of the year 2023: Totalizator Sportowy Foundation. The Foundation runs a number of programmes that address crucial social challenges, such as “Polska dziś i jutro” (“Poland Today and Tomorrow”) aimed at supporting Polish national culture, or “Odpowiedzialni społecznie” (“Socially Responsible”) focused on providing humanitarian support. The Foundation is also one of the partners of the Union of Entrepreneurs and Employers in the “Business for Ukraine Center” programme supporting Ukrainian companies planning to develop their operations within the EU as well as Polish companies looking for business partners from Ukraine.
• Startup Company of the year 2023: Infermedica. This startup introduces AI-powered solutions in healthcare to improve efficiency and address certain systemic problems.
• Exporter of the year 2023: Kompania Piwowarska S.A. Even though the domestic beer market has been going through a difficult period for the past several years, Polish beer is still a valued export product, and Polish brands enjoy recognition and popularity in many European countries. The company is one of the largest beer producers in Poland and a leader in beer exports.

Furthermore, we awarded two Special Prizes this year. The first one was awarded to Ogólnopolski Związek Pracodawców Transportu Drogowego (OZPTD – National Association of Road Transport Employers) on the occasion of their jubilee: 25^th anniversary of the association’s establishment. Polish road transport has the largest share in the European Union market and has a high share in Poland’s trade in the area of services. It is responsible for PLN 10 billion out of the PLN 30 billion surplus in the services balance.

The second Special Prize was awarded to Servier Polska Sp. z o. o., which has been present for over 30 years on the Poland market. Nearly 100% of drug packaging intended for the Polish market is produced at their Production Plant in Warsaw which is of paramount importance in today’s geopolitical situation.

***

The ZPP Economic Awards 2023 were organised by the Union of Entrepreneurs and Employers (ZPP). The Union is the fastest growing and one of the most active employers’ organisations in Poland. ZPP was founded in 2010 and brings together 17 regional and 19 industry organisations. Apart from publishing official positions on all key issues present in the Polish public debate, the Union conducts a number of special activities as part of the Digital, Work, Energy and Climate, Agricultural and Health Forums. ZPP organizes approximately 40 original events a year.

ZPP is an apolitical organisation that supports the free market, fair competition, legal stability and transparency, beyond political divisions.

It is a representative organisation of employers and a member of the Social Dialogue Council in Poland. Moreover, ZPP is present in Brussels through its Representative Office, participates in the European Enterprise Alliance, and is a member of SME Connect. The Union also has two representatives on the European Economic and Social Committee. In July 2022, ZPP opened an office in Kyiv actively supporting the development of economic cooperation between Poland and Ukraine.

 

Main partners of the event: Agencja Rozwoju Przemysłu SA, Edenred, Google Polska, ORLEN SA, PKO Bank Polski

Supporting partners of the event: Browary Polskie, Polska Federacja Producentów Żywności Związek Pracodawców, Stowarzyszenie Dystrybutorów i Producentów Części Motoryzacyjnych, Związek Cyfrowa Polska

Content partner: InfoCredit

Warsaw, 27^th July 2023

“The time is now”. This is the conclusion from the “Europe–Poland–Ukraine. Rebuild Together ‘23” conference and advice for all those wondering whether to already invest in Ukraine

On Thursday 20^th July in Warsaw, the 2^nd edition of the international conference “Europe–Poland–Ukraine. Rebuild Together” took place. Almost as many as 1000 participants, a lot more than a year before, came to the Hilton Hotel in Warsaw to listen to 59 experts who voiced their opinions during the event. “Let’s hope that when they go back to their offices, they will pass on the positive conclusions of the conference and will become motivated to get involved on the Ukrainian market,” said Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers ZPP who summarised the entire event.

Last year’s edition of the “Europe–Poland–Ukraine. Rebuild Together” conference answered the question “Should we invest in Ukraine during the conflict?”. In 2023, the question posed by the organisers and participants evolved towards “When should we invest?”. The answer to this question, a simple sentence that summed up all the opinions voiced last Thursday at the Hilton Hotel, came from Andrzej Kopyrski, Vice-President of the Management Board of PKO Bank Polski: “The time is Now”.

During five plenary sessions, invited guests discussed such issues as: Polish-Ukrainian relations in the context of the Western world’s plans for the reconstruction of Ukraine, investment prospects, financing and guarantees for entrepreneurs.

During the first session, Minister Michał Dworczyk emphasised that research on the attitude of Ukrainians towards other countries shows that Poland is an unrivalled winner with a positive attitude among 86% of the society. “This proves how good the relations between our countries have become. Such positive perception of Poles as well as Polish enterprises and products in this context is certainly the most important capital from which we can draw,” he added.

Serhiy Pylypenko, ICG Kovalska CEO, pointed out during the debate how receptive the Ukrainian market was. He noted, among other things, the lack of a manufacturer of plasterboard products in Ukraine, for which there is a huge demand during reconstruction. He even stated that whoever builds their factory in Ukraine first will likely monopolise the market.

Serhiy Tsivkach, Executive Director at UkraineInvest, mentioned that large Polish companies from the construction industry already had their facilities in Ukraine. However, how prospective this market is, indicates the fact that financial support for projects related to the reconstruction of Ukraine worth USD 400 million had already been declared – and these are not military projects, but infrastructural ones.

The Conference was also attended by a group of officials from Kharkiv, the second largest city in Ukraine, headed by Mayor Ihor Terekhov, who presented plans to rebuild the city’s infrastructure and described the potential of Kharkiv as a city with a strong IT industry and abundant scientific and teaching facilities. During his speech, he also guaranteed favour for Polish companies and transparency of investment processes. He assured that his city’s authorities were at the disposal of Polish entrepreneurs at every investment stage.

Going back to Andrzej Kopyrski whom we quoted above, one should mention that KredoBank (belonging to the PKO Bank Polski Capital Group) has been operating in Ukraine continuously since the outbreak of the war. Currently, together with Bank Gospodarstwa Krajowego, the Polish Development Fund PFR and KUKE, KredoBank is involved in the guarantee system for investors on the Ukrainian market. Kopyrski pointed out that the project of rebuilding Ukraine may be an opportunity of the century for the Polish economy.

One of the plenary sessions touched upon the prospects of Ukraine joining the structures of the European Community, as well as the country’s integration with Western markets. Horst Heitz, chairman of the Brussels-based Steering Committee of SME Connect, stated that EU institutions, as well as individual Member States, should encourage Ukraine to implement reforms so that Ukrainian law complies with EU legislation. The country’s rapid reconstruction of its infrastructure is the key to its further development.

Yaroslav Demchenkov, Deputy Minister for European Integration at the Ukrainian Ministry of Energy outlined the energy strategy for Ukraine until 2050. The objective of this strategy is to full integrate with the EU energy market, whereas integration with the Polish energy market is to take place within the next 5 years. He assured that Ukraine wanted to be in the EU’s avantgarde of green energy. The topic of energy was also elaborated on during one of the industry discussion panels.

Piotr Sabat, Member of the Management Board for Development at ORLEN, stressed the fact that ORLEN had already been involved on the Ukrainian market prior to the war, mainly in the fuel sector. He then emphasised that this market was a big challenge due to the legislation in force and the normalisation of the energy market. A factor that affects the Ukrainian market is also the shadow economy in fuel trading. Nevertheless, ORLEN on an ongoing basis analyses both the situation in Ukraine and the prospects for expanding its operations there.

Jan Sarnowski, Member of the Management Board at KUKE S.A., said that rebuilding supply chains remained a challenge. “Nonetheless, it is noteworthy that banning imports of products from Russia made it possible to replace them with Polish ones, especially in the food industry. It should also be emphasised that KUKE, as the only foreign insurer, remained on the Ukrainian market after the outbreak of the conflict and provides surety bonds on pre-war terms,” he stressed. He also commented on the fact that the number of entities exporting from Ukraine decreased by 1/3, yet those that remained on the market increased their market share by 40%.

Luca Ponzellini, Deputy Head EU Neighbourhood Banking Division, European Investment Bank, described the enormity of funds that had been mobilised for the reconstruction of Ukraine. A few weeks before the Conference, the EIB and the European Commission signed an agreement on financial support in the amount of EUR 375 million for the SME sector. Individual Member States’ programmes amounted to date to EUR 600 million. This means that funds amounting to almost EUR 1 billion will be at the disposal of potential investors.

The guests gathered at plenary sessions debated on an extensive range of topics, while Polish and foreign guests focused during industry sessions on 4 markets: energy, digital, health and labour.

Major conclusions of Rebuild’23 Industry Sessions:

The role of new technologies in the reconstruction and development of the Ukrainian economy

The digital industry responded immediately to the Russian aggression in Ukraine, trying to maintain or even develop its activities within the country to the highest degree possible, as well as providing direct financial and humanitarian assistance.

While the IT sector is the only one in Ukraine not to be affected by the recession in 2022, a certain slowdown in the industry has been observed this year.

There is great potential for exchanging experiences between the Polish public sector and its Ukrainian counterpart in the field of digitising services for citizens and businesses. The COVID-19 pandemic accelerated digitisation processes in Poland, while Ukraine is one of the leaders in the field of digital public services. For example, the Diia app offers 14 digital documents and provides 21 online services.

Both Polish and Ukrainian digital sectors have a number of significant market advantages (access to excellent specialists, absorptive markets, preferential legal solutions), but at the same time key development gaps, for instance, workforce shortages or regulatory barriers.

The speakers agreed that the sector of new technologies played a critical economic role in both countries and could become a vital driving force in Ukrainian reconstruction. When it comes to the coexistence of the Polish and Ukrainian industries, the target model should probably take the form of friendly competition with the fullest possible use of synergies resulting from the potential of both markets.

Ukraine’s energy shift towards EU integration: milestones

Since the beginning of the war, Ukraine’s energy infrastructure has been the main target of Russian attacks. A report by the World Bank dated April 2023 estimated total losses at USD 6.5 billion, with USD 3.9 billion in generation, and USD 1.9 billion in networks – and that covers only the area controlled by the government in Kyiv.

The modern operational challenges that Ukraine is facing in the field of power infrastructure resemble the problems faced by Polish grids more or less 45-50 years ago. And although the war exacerbated the scale of the challenges, as Russian attacks caused unforeseen infrastructural damages, transregional transmissions had been an obstacle to the proper balancing of the system already prior to the war.

Before the war, the Ukrainian energy sector was responsible for generating 72% of the particulate matter produced in Europe. The accountable power plants have no raison d’être in the reconstructed energy system.

Presently, the issue of balancing the Ukrainian system, after merging it with the EU, has become a pan-European affair. In the first year of the synchronised UA-EU market, approx. 800 GWh of energy vanished, which was not regulated as trade flows. Furthermore, within cross-border exchanges, the surplus of energy contracted in trade agreements introduced to the European grid amounted to approx. 6 TWh, and 3 TWh was sent to Hungary, with which Ukraine had not contracted these flows.

Before Ukraine starts earning significant amounts from cross-border transmission, the issues of regulation of the Ukrainian system need sorting out. That system is based on a steam and gas system while regulation is based on hydropower installations. As a result, it reacts slower than the European system based on turbine generators.

The example of Poland’s development after accession to the EU is proof that only the enforcement of uniform regulations, a common market, uniform tender procedures and anti-corruption mechanisms had the power necessary for international economic relations to gain momentum. That same scenario is expected in Ukraine, maybe even quicker than in Poland, provided that legislative solutions are urgently adapted.

Ukraine is already today seeing a slow recovery in demand for energy, but there is lacking infrastructure and room for efficient investments in distributed energy, which seems to be the only direction for Ukraine.

Despite the enormous efforts in the process of repairing current damages and removing failures, Ukraine is developing plans to build hybrid installations, to develop a storage system, and to initiate hydrogen projects. The challenge lies in finding partners who, in many cases, have suspended their operations out of fear for their employees.

Everyone present at the session agreed that Ukraine’s energy system following the Russian war should be rebuilt in a new design and have new tasks, such as supplying the EU with surplus green energy. For now, however, there are potential problems with raising funds for this purpose.

With a huge RES potential estimated at 900 GW along with other emission-free sources, such as nuclear energy, Ukraine has a chance to become an important supplier of green energy not only for the needs of its own transformation, but also of the entire EU.

The role of economic migration on the Polish and Ukrainian labour market in the nearest future

The data indicate that 500,000 migrants from Ukraine are responsible for an additional increase of 1% in Poland’s GDP. Although at the beginning of the war Poland was the main direction of migration, today our country is increasingly less attractive for refugees to live and work.

In 1991, Ukraine had a population of 52 million, and in 2023 its population fell to 29 million. Currently, there are approx. 8 million Ukrainian citizens living abroad. This indicates significant problems for the Ukrainian economy and labour market that may arise after the war, along with the beginning of investments related to the reconstruction of this country.

Poland is currently one of the countries struggling with the greatest demographic problems in the world. Day to day instability is also not conducive to decisions regarding having a family. While Poland has a fertility rate of 1.26, there are many indications that it has dropped in Ukraine below 1.

Polish companies are nowadays struggling with a considerable shortage of employees. Undoubtedly, refugees from Ukraine who have been coming to Poland since the beginning of the Russian invasion are of great value to our economy. The problem with lacking workforce, which currently affects Poland, may in the future impact Ukraine. It is crucial for our country to be able to both attract Ukrainians to work here and to retain them after the war.

The scale of housing problems or the need to provide childcare to single women is of key importance in settling in Poland. The role of learning the local language in enabling migrants to stay permanently in our country is frequently emphasised. It is also imperative to facilitate the recognition of qualifications.

Many companies and institutions run activation and training programmes for migrants from Ukraine. Some of these initiative are run in cooperation with the Union of Entrepreneurs and Employers.

The transformation of the Ukrainian economy will be very similar to the Polish transformation. Poland has already gone through this process and has experience with processes related to it. Furthermore, no business culture in the European Union is as close to the one in Ukraine as that of Poland. The Polish transformation from an emigration market to an immigration economy was very rapid. Today, we issue more work permits than Germany, for instance. We can without a doubt share this experience and it can be very valuable for Ukraine.

The pharmaceutical sector in Poland and Ukraine: the potential for partnership in the context of war and European integration

Ukraine is the largest country in Europe in terms of area, ranks 6^th in terms of population size and 2^nd in the number of cancer patients (1.2 million).

From the healthcare perspective, Ukraine has been struggling with such problems as: the lack of reimbursement or mutual recognition, restrictions on certificates of compliance with EU standards since the COVID-19 pandemic until the current military operations. On the flipside, one can be optimistic due to the openness to cooperation with the Western pharmaceutical industry, the country’s motivation to become as soon as possible an important member of the European Community with a significant place in European health policy. As of now, the Ukrainian Ministry of Health has decided to attach great importance to medical research in the economic strategy for Ukraine until 2030, which is currently under development.

Even prior to the war, Ukraine had had a highly developed pharmaceutical and scientific sector. This was a legacy that had been growing in recent decades. Our eastern neighbour exports drugs to over 50 countries around the globe, including numerous member of the EU, and medical products manufactured in Ukraine are sold on all continents.

Presently, the reconstruction of the Ukrainian healthcare requires: continuous development of pharmaceutical companies, cooperation based on dialogue, mutual understanding and trust.

Secretary of State Marcin Przydacz, Head of the Office of International Policy in the Chancellery of the President of the Republic of Poland, gave the closing speech at the conference. He presented the three advantages Polish companies have in the reconstruction of Ukraine: we are the geographically Ukraine’s closest partner with infrastructure at the ready, we are now on the best terms ever in history, we are culturally and linguistically close, and the largest minority in Poland are now Ukrainians.

As Cezary Kaźmierczak, President of ZPP, concluded his speech: “(he) who will be the first on the Ukrainian market will have the most time to dominate it”. ZPP is the only Polish association of entrepreneurs that provides assistance in Ukraine through their offices in Kiev, Lviv, Lutsk and Vinnytsia.

***

The conference in its entirety, along with industry sessions, is available on the YouTube channel of the Union of Entrepreneurs and Employers: https://www.youtube.com/@ZPPnetpl.

The event’s agenda can be found at: https://ukraina.zpp.net.pl/rebuild_together.

Warsaw, 29^th May 2023

 

Press conference:
Marcin Nowacki elected the EU’s head of the EU-Ukraine Civil Society Platform

 

On 29^th May 2023 at 1 pm, at the Polish seat of the European Parliament and the European Commission, a press conference was held during which Marcin Nowacki, Vice-President of the Union of Entrepreneurs and Employers, was elected head of EU-Ukraine Civil Society Platform (EU-Ukraine CSP) representing the European Union. The platform operates within the framework of the European Economic and Social Committee (EESC) in Brussels, which is an EU advisory body.

At the conference, Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers, pointed out during his opening address that the European Economic and Social Committee is a platform for dialogue between employers, trade unions, NGOs, and politicians: “We are truly happy that a Pole has become the plenipotentiary for Ukrainian affairs, even more so a member of our organisation. Marcin Nowacki took on his new duties already at the beginning of the month.”

“The EU-Ukraine Civil Society Platform is the foundation of institutional cooperation between social partners from EU member states and Ukraine. I have been elected for a term of 2.5 years, and I hope that we will soon begin the accession negotiation process. This is what will motivate me the most in the months to come. After the negotiations start, the Civil Society Platform will become the EU-Ukraine Joint Consultative Committee,” – said Marcin Nowacki, the Union’s VP.

The EU-Ukraine CSP integrates social partners from the EU and Ukraine. The body aims to supervise the process of Ukraine’s integration with the EU and to integrate the business community and employees between the parties. As part of the undertaken activities, reviews of the process of adapting Ukraine to EU requirements and support in the field of Ukrainian business entering the EU market are held.

The EESC is an EU advisory body with a specific role in the EU’s decision-making process. Before being processed by the European Parliament, each regulation is subject to an opinion process at the EESC. It consists of 329 representatives of employers’ organisations, trade unions, and NGOs from all Member States.

Warsaw, 13 June 2023 

 

In order to ensure the development of SMR technology in Poland and Europe, we need fleet-oriented investments of regional coverage

 

That’s the conclusion of a discussion among industry experts, technology providers, investors and researchers who attended the “SMR – Modular Nuclear Energy for Business” conference on Monday, June 12, held in Warsaw by the Energy and Climate Forum of the Union of Entrepreneurs and Employers. PKN ORLEN was the Main Partner of the event, EDF was a Partner, and Honorary Patrons included three ministries – the Ministry of Climate and Environment, the Ministry of Development and Technology and the Ministry of State Assets, as well as the National Atomic Energy Agency, the National Center for Nuclear Research and the National Fund for Environmental Protection and Water Management.

The event brought together both nuclear lawmakers, the regulator, several US and European SMR manufacturers, recipients declaring interest in small reactors of various capacities and nuclear experts, who sought to take prepare an inventory of the state of the art of modular nuclear reactors to date and outline the outlook for the development of such investments in our country and region.

In the opinion of Adam Guibourgé-Czetwertyński, Undersecretary of State at the Ministry of Climate and Environment, the Polish nuclear special-purpose act and nuclear law are sufficient for SMR investments to be developed on their basis, with technology neutrality and a desire to streamline the processes involved in obtaining the necessary permits at the core of the national legislation. Nonetheless, seeing the growing interest in small nuclear reactors, work is currently underway at the ministry to detail regulations for smaller modular nuclear reactors. The minister also encouraged a concerted international effort to bring nuclear technologies from a background player to the front lines of energy transition efforts – as complementary solutions to RES and hydrogen investments.

According to Kamila Król, Undersecretary of State at the Ministry of Development and Technology, small nuclear reactors have the potential to become a lever of the Polish economy in the coming decades. SMRs can be a remedy for the rising cost of CO₂ allowances and ensure Poland has the right composition of the low-carbon energy mix on the one hand, and guarantee a stable and secure energy supply on the other.

As noted by Jarosław Dybowski, Executive Director of Energy PKN ORLEN and Vice Chairman of the Board of ORLEN Synthos Green Energy: “We cannot think of nuclear reactors today as classically understood power plants, which in the past were only meant to provide electricity. The use of SMRs in domestic conditions is naturally the replacement of depleted coal-fired units, but the modular reactors will also work in the combined heat and power economy and find application in numerous industrial processes.” District heating and energy-intensive industries are identified as the main beneficiaries of SMR technologies, and the number of entities declaring interest in these solutions is growing.

The main challenge appears to be not so much the technology of light-water nuclear reactors themselves, of which there are about 150 in operation worldwide and only their power and size need to be scaled up; it is the cost that may be a barrier. Experts agree that two aspects can help investors in this regard. On the one hand, suitable government guarantees and a refined financial model, so that involvement in SMRs for banks entails acceptable risks. On the other, the economies of scale brought about by a fleet-oriented investment campaign of regional range, which will reduce unit costs and build locally the competence, service facilities and structures necessary for the new sector.

“After listening to the participants of the discussion, several recommendations come to mind, such as the involvement of Polish regulators in work on harmonizing nuclear regulations and standardizing certification of SMRs in Europe, the need to consider establishing a TSO (Technical Support Organization) within the structures of the National Center for Nuclear Research and, finally, opening a debate on the future of the nuclear energy in the EU taxonomy, which assumes support for nuclear investments only until 2045, at the European forum.” – concluded Jakub Bińkowski, Board Member of the Union of Entrepreneurs and Employers.

The conference also touched upon many other aspects of SMR projects, such as safety considerations and the important role of the PPA, which will evaluate small nuclear on the same basis as full-scale nuclear investments. According to experts – despite the already clear support for nuclear in Poland – an extremely important aspect determining the success of SMR investments will be properly conducted communication due to the particular public perception of risk from nuclear facilities. As experts point out, there is no shortage of ideas for small nuclear reactors in the world today, as there are already about 80 projects at the “early design” stage, including also high-temperature reactors using other types of fuel and cooled by gas, HTRs (including a Polish one!) or nuclear batteries that can operate for 20 years without human intervention and the need for fuel supply. Another thread raised by the participants in the discussion was the possibility of involving Polish companies in the development of the European SMR sector, in which experts see significant potential given the pace of development of SMR projects in our country.

The event was attended by over 150 participants. The Union of Entrepreneurs and Employers will soon make a full recording of the conference available on its YouTube channel.

Link to the event page: https://zpp.net.pl/en/events/event/conference-smr-small-reactors-for-business-is-poland-the-smr-technology-incubator-in-europe/

 

Warsaw, 5^th April 2023

We need a strategy to restore Poland’s importance on the international arena!

On 4^th April at 3 pm, a conference inaugurating the Agenda Poland 2030 project was held in the Freedom Lounge. During the meeting, issues that are essential from the perspective of Poland were discussed, including national security, as well as how to respond to future challenges.

The dynamics of events that transpired in recent years are but a historical opportunity that is opening up for Poland. Not only our prosperity and security, but also the political order of the whole of Europe and its relations with what will emerge from Russia in the future may depend on how we make use of Poland’s growing significance in Europe today. The strategic goal of Polish policy should be to create a permanent Berlin-Warsaw-Paris axis within which decisions would be made on the most important aspects of European foreign and economic policies, as well as concerning the model of EU cooperation. To achieve this, Poland must be wealthy and strong. We want to help build it; therefore, we updated the programme of the Polish Agenda regarding the critical areas of the functioning of the state.

The first Agenda Poland was published 4 years ago. You can find it on our website: agendapolska.wei.org.pl. A number of our postulates resulting from that analysis of the political and economic situation were taken into consideration, while others over time have become even more urgent and are still waiting for their implementation. The experience of the first Agenda Poland gave us not only a wealth of knowledge, but also faith that even the most ambitious and seemingly abstract goals can be achieved. The project, to which we invite not only our experts, but all those who see the uniqueness of the moment and the opportunities ahead of Poland, will be widely consulted and will not be limited to pure theory, but also practical ideas for its implementation.

The following are our key postulates:

1. The most urgent task for the state is to restore the authority and dignity of the judiciary. Things have gone so far that the only option available is the Zero Option, which includes, among other things, the liquidation of the Constitutional Tribunal and the State Tribunal, and a transfer of their powers to the Supreme Court; the appointment of a new National Justice Board whose members would be appointed in equal numbers of 5 persons by the judiciary itself, the President of the Republic of Poland and the academic community, and 3 persons by the government of the Republic of Poland, the parliamentary opposition, and civic society (Social Dialogue Council, Commissioner for Human Rights). The National Justice Board should deal with disciplinary matters and carry out the decommunisation of the judiciary.
2. EDUCATION AND HIGHER EDUCATION. Radical reforms are necessary that will encourage the creativity, entrepreneurship, and inventiveness of Poles. We postulate, among others, for the introduction of an Education Voucher and changes to the role of the state in education – the state should not organise, but finance education, while schools ought to be transferred (excluding real estate) to parents, teachers, private companies, associations, local governments, foundations etc. by way of tenders.
3. The role of the state in healthcare ought to be changed from running hospitals, clinics, and medical facilities to financing healthcare for citizens. Furthermore, universal health insurance should be introduced, which the state would purchase for each citizen in the insurance company of their choosing. Insurers must organise themselves into a Reinsurance Fund in the event of bankruptcy of one of them.
4. If we are to quickly catch up with wealthy Western economies in terms of development and have the necessary funds for national defence, it is necessary to radically deregulate the economy according to the EU+0 formula, and to make the labour market more flexible. It is also necessary to introduce fundamental stability of the legal system. New economic regulations should only enter into force once a year, after a vacatio legis of at least twelve months.
5. SOCIAL POLICY. We are changing the model of social policy to a fully automated one. Both the available IT tools and data collected by the National Revenue Administration and the Social Insurance Institution are sufficient for this purpose. We eliminate the human factor in the social benefits’ process. Mechanisms for benefits valorisation should also be automated. We exclude affluent people from the support system, and at the same time we introduce the “one zloty for one zloty” rule so that exceeding the income threshold per family member is not tantamount to the loss of the entire benefit, but only its reduction in proportion to exceeding said threshold.
6. A key security objective is Poland’s ability to defend itself. At the same time, we draw attention to the necessity of the greatest possible involvement of the Polish defence industry. The potential of the Polish economy and science should be used to the maximum extent in defence of Poland. Purchases from foreign “shelves” should be limited to the absolute minimum.

We encourage you to have a look at the full contents of our Agenda, which can be found HERE.

Until now, these were Germany and France who decided the fate of Europe. Paradoxically, the geopolitical turmoil we are witnessing today means that Poland will be able to join these two countries, provided it introduces appropriate internal reforms. The outline of such reforms was presented by the Warsaw Enterprise Institute, the WEI Centre for Strategic Studies, the Union of Entrepreneurs and Employers, and the Consumers Forum on 4^th April 2023 at 3:00 p.m. at the Liberty Lounge.

During the conference, Adam Eberhadt, Director of the Centre for Strategic Studies, pointed out that the European Union is not about establishing dogmas, but pursuing a flexible form of cooperation. Poland’s strength lies in its initiative-taking policy and ability to build coalitions with the strongest European countries. This was the case recently with Internal combustion engine vehicles. As a country, we will become a valuable partner for Berlin and Paris, but only if we cooperate with them and stand together against them.

Cezary Kaźmierczak – President of the Union of Entrepreneurs and Employers said that when it comes to the economy, we are successfully catching up with wealthy Western countries. However, we are hindered in this race by a tragic tax system, bad economic law, and legal instability. These obstacles must be removed so that we can start acting faster, because it gives us a position in conversations with the Germans or the French. If we have a solid economy and an army, it will be possible to achieve the goal.

Tomasz Wróblewski – President of the Warsaw Enterprise Institute, in turn, stated that the goal is to create an agenda that everyone can make use of, which will determine our prospects and directions of action. Differences in society will always be there, but maybe when we engage in a strategy that deals with matters and not people, there will be less hatred.

Agnieszka Plencler – President of the Consumers’ Forum Foundation took up the topic of consumer choices vs. civic choices. Consumers, expecting social leadership in business, want to know the values and missions of brands, but in demanding situations, the price becomes the most important criterion for them. The citizen, on the other hand, choose the opposite, turning off rational thinking in a crisis situation and following emotions. This is how elections are held, people do not consider the politicians’ postulates of, and give in to empty promises. Consumers learn that when they pay, they demand, and the citizen pays, but does not account for efficiency.

Warsaw, 5^th April 2023

A new health platform – the Health Forum of the Union of Entrepreneurs and Employers

Healthcare has always been a challenge for experts, representatives of government and local government institutions, medical specialists, representatives of patients’ organisations, but also entrepreneurs and employers themselves. Health is and should be treated as the foundation of all values. But it also is an important branch of the economy. In response to the enormous needs of all stakeholders on the medical market and the challenges it faces, the Union of Entrepreneurs and Employers brought to life the Health Forum.

Daily problems of Polish healthcare are issues that concern us all and further deepen the need dialogue within the sector. These problems include, among others, the lack of reimbursement for treatment of given patients, employers’ costs related to employees on sick leave, queues to specialists, staff shortages, digitisation, and finally the effects of various pandemics, wars and their impact on medicine supply chain safety are.

“There is much to be done in healthcare. This is a particularly sensitive area that requires careful consideration of the views of all parties involved. Therefore, the Health Forum of the Union of Entrepreneurs and Employers, being a completely new health platform is an optimal place to exchange experiences, to present the postulates of various entities, to advocate ideas, and develop the best solutions with the possibility of their implementation in health policy,” says Aleksandra Sienkiewicz, Director of the Health Forum.

The goal behind establishing the Forum is to promote the postulates of rational systemic reforms and an attractive regulatory and institutional environment for companies from the universally understood health sector, which will ultimately translate into change that will benefit everyone. The Union’s Health Forum focuses on the organisation of an expert discussions on a broad spectrum of issues related to healthcare, from prevention to treatment, taking into account the financial and regulatory environment. As part of the Forum, we will publish commentaries, positions, and reports that help draw attention to current problems and find the best approach to difficulties in each area of healthcare in Poland.

Brussels, 27^th March, 2023

 

Working Lunch “Offshore Wind International Cooperation in the Baltic Sea”

 

It is important to accelerate the development of offshore wind across the European Union, while ensuring enhanced manufacturing potential of EU-based components. Overcoming the current supply crunch linked to ambitious climate targets, as well as the skills and permitting hurdles, will be crucial for upcoming wind farm investments – was the conclusion of the Working Lunch titled “Offshore Wind International Cooperation in the Baltic Sea”, that took place on March 27^th in Brussels.

The event co-hosted by Permanent Representation of the Republic of Poland to the European Union, the Mission of Canada to the European Union, and Union of Entrepreneurs and Employers event was supported by Baltic Power – which is developing one of Poland’s first offshore wind projects. The 1.2 GW project, to be operational by 2026, is a joint venture established by the Polish company PKN Orlen and the Canadian Northland Power.

The discussion was moderated by Matthew James, editor-in-chief of Energy Post, and featured a group of speakers that included the Ambassador of Canada to the European Union, Ailish Campbell; Arkadiusz Plucinski, Deputy Permament Representative of the Republic of Poland to the European Union; Mechthild Wörsdörfer, Deputy Director General at the European Commission’s DG Energy; Jarosław Broda, Board Member of Baltic Power; Malgosia Bartosik, Deputy Chief Executive Officer of Wind Europe; and Wadia Fruergaard, Head of Offshore & Supply Chain Policy at Vestas.

The event began with opening remarks from Ambassador Campbell who highlighted the Canadian government’s support for Europe’s energy transition and the role of Canadian industry in providing technology and expertise to the green energy transition in the European Union. She highlighted Northland Power’s capabilities in developing wind power projects in Europe and Canada, and emphasized the need to eliminate the energy dependence on Russia following its invasion of Ukraine, as well as the potential to expand secure and trusted renewable energy supply chains between the EU and Canada in manufacturing and operating green technologies.

Then, the Polish Ambassador, Mr. Arkadiusz Pluciński, took the floor highlighting the need to enhance Europe’s energy security in the midst of the ongoing war in Ukraine. And offshore wind development, particularly in the Polish part of the Baltic Sea area, is an important instrument to achieve this objective, as the natural conditions for its development are particularly favorable in Poland. Mr. Ambassador underlined that the timing to push for more offshore wind projects is now crucial as the EU Council is finishing negotiations of the revised Renewables Directive and is starting its work to form a position on the Electricity Market Design reform.

Mr. Jarosław Broda, the Board Member of Baltic Power, focused on the main challenges from the offshore wind farm developer’s perspective, highlighting the need to reflect the current economic situation – supply crunch and growing prices of components, and high inflation – in the levels of support for new offshore wind projects. He also stressed the need to speed up the permitting process and scaling up the volume of projects to come online by 2030 in order to meet the EU’s 2030 offshore wind energy objectives. Over 30 GW of new capacity is needed in only 7 years to achieve the targets. A particular challenge will be to maintain the EU-based supply chain with growing demand for projects and much lower prices of non-EU suppliers. Mr. Broda underlined that the project of Baltic Power will provide high local content, with Vestas announcing the construction of a turbine factory in Poland (in Szczecin). The factory will employ up to 700 people. Mr. Broda informed that the first phase of procurement for the Baltic Power project is finalized, with all key project components already secured. Moreover, the investment has recently obtained a positive notification decision from the European Commission with regard to its support via the contract for difference.

Mechthild Wörsdörfer, Deputy Director-General of DG Energy at the European Commission, discussed the Commission’s renewables objectives and underlined its support for the Baltic Power project as a contributor to the EU’s energy transition. Ms. Wörsdörfer focused on the importance of offshore wind development, as well as the Baltic Sea’s crucial role in it. She highlighted the role of faster permitting recently addressed by EU policy makers, as well as the push to enhance EU manufacturing capacity via the Net-Zero Industry Act announced by the Commission a few weeks ago. She also underlined the importance of the supply chain and skills as a priority for the European Commission. The Deputy Director-General emphasized the important contribution that Poland will make to developing offshore wind with its 6 GW of new projects coming online by 2030, and underlined that the Commission will be encouraging this process.

Wadia Fruergaard from Vestas addressed the current supply chain concerns and challenges, from the perspective of Baltic Power’s future wind turbine supplier. Project visibility remains the most important factor for the supply chain, as is the case for the Baltic region where the potential and volume have allowed Vestas to take initial investment decisions on local manufacturing. However, the supply chain in general is fundamentally challenged by offshore wind auctions. In her opinion, the so-called “race to the bottom” in tender systems that allow bids at 0 EUR/MWh or even at negative prices, should become a thing of the past. The entire supply chain becomes squeezed as a result, needing to either develop new technologies, or to significantly ‘cost out’ – neither option supports the real priority: scaling the industry to meet ambitions.

Małgosia Bartosik from WindEurope provided the EU perspective of the offshore wind sector, flagging the ambitious targets for 2030 and current supply chain issues. Mrs. Bartosik underlined that 2022 was the worst year for offshore wind in terms of investment decisions,  largely due to national market interventions and emergency market design changes implemented by different Member States – such as electricity price caps for renewables. She stressed the need for Members States and the EP to support the recently tabled European Commission’s Market Design proposal, in order to restore investor’s confidence and make Europe an attractive place to invest again. The Net-Zero Industrial Act proposed recently by the Commission in her opinion falls short of what is needed, as Europe only has 3 years to build new factories and scale up production to meet the 2030 targets with the European supply chain. Today, Europe can make 7 GW per year of offshore wind turbines. Government targets require the industry to be making 20 GW per year from 2026/27. She agreed that it is a pure volume, and not an innovation challenge for the EU wind industry. More concrete solutions and support measures for domestic investors, such as the ones introduced in the recent American Inflation Reduction Act, should be implemented in Europe.

The discussion then moved to follow-up questions on a range of priorities, including expanding on the Contract for Difference and faster permitting timelines, as well as discussing grid investment, supply chain problems, and opportunities for employees regarding skills and job creation.

The panelists also discussed the Marienborg Declaration, which was signed on August 30th, 2022, by eight Baltic Sea EU Member States: Denmark, Estonia, Germany, Finland, Latvia, Lithuania, Poland, and Sweden. The declaration committed these countries to achieving around 20 GW of installed capacity in offshore wind energy by 2030. To achieve this target, there is an urgent need to speed up the development of new offshore wind projects, as currently, the total offshore wind capacity on the Baltic Sea is only around 2.8 GW.

 

Baltic Power – Contribution of the 1.2 GW offshore wind project in Poland to EU’s energy transformation

Warsaw, 13^th March 2023

 

Barriers to running a business in Poland – a constant, unchanging problem

 

High taxes, legal instability, and high labour costs have been the “TOP 3” barriers to doing business according to Polish entrepreneurs since 2019. Legal instability has since then become a much more severe barrier (36% of respondents in 2019, and 51% in 2023), and entrepreneurs in Poland similarly perceive barriers to the development of business activity. Ambiguous, overcomplicated, and unfavourable provisions of the law as well as extensive administrative procedures certainly make the “TOP 3”.

“The instability of the law as a whole is a major problem, but what is even more important is the complexity of economic and tax law. For seven out of ten entrepreneurs from the trade sector, this constitutes a serious barrier to running a business,” said Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers.

According to Polish entrepreneurs, the chief reason SMEs do not employ more people is the excessive cost associated with it. Since 2019, more than 60% of Polish entrepreneurs regardless of their sector have been of this opinion. Whereas when it comes to the main obstacles to investing capital by SMEs, Polish entrepreneurs claim the following: insufficient profits – 46% of respondents, fear of capital loss – 45%, and declining demand for services and/or products provided by the company – 41%.

“These results are confirmed by the findings of our latest Busometr survey for 1Q23. The vast majority of entrepreneurs said they were reluctant to invest and found employment costs problematic,” continued Kaźmierczak.

As many as 51% of Polish entrepreneurs said the largest barrier to starting a business in Poland was the lack of free funds to begin with, 46% of them were reluctant to take responsibility for the possible failure of their company (38% in 2019), and 36% had no vision for their business operations (46% in 2020).

According to 55% of respondents, non-refundable financial aid would be one of the best incentives to start one’s own business offered by the state along with an extended period of preferential social security (54%). Entrepreneurs also answered “lowering social security contributions or other taxes” to the question about “other” driving forces that would encourage them to start their own business.

“This proves Polish entrepreneurs support our actions and demands related to, for instance, the memorandum on the package for small businesses, which included an extended period of preferential social security or reduced disability pension contribution paid by micro-enterprises. What I find most pessimistic in this study is that basically nothing has changed in years,” he concluded.

 

METHODOLOGY

In January 2023, the Union of Entrepreneurs and Employers together with Maison Research House conducted a survey entitled “Barriers to running a business in Poland”. It is a cyclical survey conducted since 2019, using the CAWI technique with a sample of 534 companies from the SME sector.

 

See more: 13.03.2023 Barriers of performing business activity in Poland

Warsaw, 9 February 2023 

 

SLIGHTLY BETTER BUSINESS SENTIMENT
 The Busometer ZPP for the first half of 2023

 

Business sentiment for the next six months has improved slightly; however, it remains significantly pessimistic. The overall value of the BUSOMETER sentiment index in companies was 36.4, while the index was 32.4 in the previous research period.

As Cezary Kaźmierczak, the President of the Union of Entrepreneurs and Employers, noticed: “Entrepreneurs are reacting cautiously to the signals coming from the market.” So far, the gloomy scenarios forecasted last year have not materialised; however, there are still no clear signs of recovery.  The result is a more optimistic mood, compared to that from the last few readings; however, it is still far from enthusiasm.”

As it was the case in the second quarter of 2022,  entrepreneurs positively assess the situation on the labour market (currently 53.1 compared to the previous 51.6).

“This confirms that the labour market in Poland is in a stable and good condition at the moment – there is low unemployment and employers are unlikely to consider downsizing” – noticed Cezary Kaźmierczak commenting on the results of the study.

The value of the sentiment index in the context of the economic situation increased quite significantly (from 27.9 to 35.1). The index can still be described as a “crisis”; however, its increase shows that some entities see prospects of an economic rebound on the horizon in the perspective of the next six months. However, the fact that as many as 58% of entrepreneurs believe that the economic situation will deteriorate further in the coming months cannot be ignored.

The only component of the index that has not increased from the previous study is the investor sentiment index (it is 24.1, as it was six months ago).

As the ZPP President clearly noticed: “There is a certain risk that we will be stuck in persistent and long-term inflation, which will prolong the period of slowdown, and the lack of prospects for recovery from that phase will block investment attempts in the corporate sector.”

METHODOLOGY AND DESCRIPTION OF THE STUDY

The Busometer ZPP – the SME Economic Sentiment Index, is an indicator showing the degree of optimism of small and medium-sized enterprises and their planned activities in the perspective of the next six months. The Busometer has been published by the Union of Entrepreneurs and Employers in cooperation with Maison Research House every six mothn since 2011.

The Busometer Index value is influenced by three components:

• the economic situation,
• the labour market (remuneration and employment),
• investment. 

The value of each component ranges from 0 to 100.  The Busometer scores below 50  indicate pessimistic business sentiment, while scores above 50 indicate optimism.

See: 9.02.2023 Busometr: Prognosis for the first half of 2023