The Polish Government’s Mid-Term Report: Must Do Better

.

Half way through its term, how economically successful has Poland’s government been?

“Perversely, the biggest success of this government is that the Law and Justice Party (PiS) has not carried out certain promises made during the election campaign,” Professor Stanisław Gomułka, former deputy minister of finance and now chief economist of the Business Centre Club (BCC), told INN: Poland.

Two of these broken promises could seriously damage the economy: exchanging loans taken in Swiss francs (mainly mortgages) for złotys at their original rates, and increasing the amount which can be earned before tax is paid. According to most estimates, the first proposal would cost the banking sector many billions of złotys. The latter promise ended up being applied only in the case of those with the lowest income who had paid little or no income tax before.

BCC’s Professor Gomułka also believes that lowering the retirement age two years after the government came took office, and not immediately after, gave the economy more time to adjust.

“More detrimental to the economy are the burdens and regulations entrepreneurs need to bear,” ascertains Andrzej Sadowski, president of the Adam Smith Centre and a member of President Andrzej Duda’s National Development Council. “People will not just start relying only on the funds they receive from the state. They will continue working. And some of them will get social security.”

“Lowering the retirement age is a very bad idea. Perhaps the worst one this government came up with,” Marcin Luziński, an analyst at BZWBK, tells INN: Poland.

The Morawiecki Plan

Economists believe that fast GDP growth — the Ministry of Economic Development and Finance is expecting the rate to exceed 4 per cent in 2017 — as well as the decreasing unemployment rate — 6.8 per cent in September, down by 0.2 per cent compared to August — are the result of the global economic situation rather than any measures taken by the government. They claim that the Morawiecki Plan (named for its architect, Mateusz Morawiecki, deputy prime minister and minister of economic development and finance) which is meant to show the direction in which the economy should develop, is in principle a success.

“Whether we agree with the plan or not, and whether it is being implemented and we have seen any specific results from it are two different things,” Mr Zuber added.

According to Professor Gomułka, Morawiecki’s strategy was mainly based on encouraging businesses to invest. And that has failed.

“The government’s biggest problem is a serious fall in domestic investment, a dip even. So far in 2017, [the government] hasn’t been able to find an antidote to the losses of 2016,” economist Marek Zuber told the Polish Press Agency (PAP). “Those investments are not in place and without them economic growth cannot continue in mid- or long-term.”

Professor Gomułka says the government’s policy towards multinational corporations — from what has been called repolonisation to the merging of state-owned companies with the intention that they dominate the market could be seen as another failure.

“History shows, especially in Poland, that if the government tries to manage companies, the results are very poor,” says BZWBK’s Mr Luziński. “This refers to both their business condition and malpractice, such as the handing out of political sinecures,” he added.

According to Mr Zuber, a destabilised economic environment is another serious problem. “This mainly appeared in 2016, with various ministers coming up with ideas related to changes in the tax system, then changing their minds — we don’t know what’s going to happen,” Mr Zuber added.

“I remember the first speech made by Deputy Prime Minister Morawiecki, when he compared the situation of entrepreneurs in Poland and neighbouring countries, saying that the latter had it better. Since then nothing has changed,” the Adam Smith Centre’s Mr Sadowski says. ‘There is no economic policy in Poland, just slogans before elections, and new barriers after them.”

Euro cash and Zloty on one photo.

Tax & Spend

The Morawiecki Plan has not gone away. Economists are more positive, however, about improving the efficiency of the collection of VAT and other taxes.

“There has been a lot of propaganda proclaiming great success, but no one can deny that the measures taken by Deputy Prime Minister Morawiecki in the fight against tax evaders are bringing results,” says BZWBK’s Mr Luziński.

Professor Gomułka confirms the measures have brought additional budget revenues of about 20 billion złotys. “Firstly, in the election campaign, PiS spoke of 50-70 billion złotys. Secondly, it is a one-off: in next year’s budget there is no sign of improved VAT collection,” adds Professor Gomułka.

Mr Zuber says social programmes might be regarded as the government’s main success. “Certainly, the 500 Plus [family benefit] programme, which has lowered poverty in Poland, is a success, although we do not know if it has increased the birthrate,” he adds.

Mr Sadowski says 500 Plus should be referred to as a tax cut and not a family benefit. “It is an interesting process of lowering taxes of quite a weak structure. Not only is the government giving away money, it could have been introduced in a more efficient way. Currently, people who do not have any financial problems have access to the programme. It also pushes women out of the labour market,” BZWBK’s Mr Luziński concludes.

According to the most recent CBOS polls, 47 per cent of Poles would vote for Law and Justice if new elections were to be held.

(source: PAP, INN: Poland)

RELATED ARTICLES

IMF Wants Banking Sector Reform in Western Balkans

croatia national bank

EY: Belarus’ IT Scene Is Thriving

High tech park minsk

Sarajevo Stock Exchange Connected to SEE Link

sarajevo stock exchange

Ukraine to Restart Privatisation to Realise Profits

Pricatisation electricity ukraine

Hungary’s Solar Dreamer

hand sun and blue sky with copyspace showing freedom or solar power concept

Romania Cuts Income Tax, Introduces Solidarity Tax

CLUJ NAPOKA ROMANIA - OCT 2 2016: People on the central street of Cluj Napoka - the unofficial capital of Transylvania.

Retail Rents Rise Across Emerging Europe

Na Prikope Prague

Still Potential for Growth in CEE as Economies Stabilise

ICT Growth Continues to Boost Bosnian Economy

ict, it

Latvian Deputy Prime Minister Highlights Riga’s Potential

riga

After Economic Shocks Armenia Plans for Macroeconomic Stability

yerevan armenia minister of finance

UK Economic Growth Slows as Brexit Uncertainty Bites

flags of UK and EU combined over icons of London - Brexit concept

EU Membership and Transition into Market Economies Have Helped CEE Achieve Social Progress

Emerging Europe Back on Track to Convergence

wiiw

Lithuania Wants to Bring Home its Skilled Workers

VILNIUS - FEBRUARY 25: Many people choose books at the indoor book

Ukraine’s Finance Ministry Wants Urgent Tax Reform

Lviv Region in Double Logistics Boost

goods train logistics

Serbia Drafts New Competition Law

serbia belgrade flag

PE and VC Investment In CEE Is At an Eight-Year High

venture capital

Bosnia and Herzegovina: Focussing on Stability and Business Climate

Sarajevo Bosnia and Herzegovina - August 23 2015. View of Miljacka River in Sarajevo city

Bulgaria: Real Estate’s New Frontier?

Romanian Economy Grows Fast in 2017

Brasov cityscape panoramic and aerial view over medieval architecture of Brasov town, in Transylvania Romania

Poland Fails to Spend Billions of Euros in EU Funds

euro banknotes

Poland’s Business Constitution Must Be Finalised

Front of finance ministry in Warsaw Poland with a fountain framing the entrance. Could be used for images about Euro currency problems

Mayor: Armenia And Its Capital Yerevan Offer Safe Investment And Tourism To a Growing World

Digital Business Space Gives All Businesses an Office in Sarajevo

Sarajevo Bosnia and Herzegovina - August 24 2015. View from Vraca Memorial Park with building of Avaz Twist Tower

Meghri Becomes Armenia’s Third FEZ

armenia emerging europe

Warsaw Rising: The Polish Capital’s Skyline Gets Even Taller

varso

EU: Consumption Still Driving Growth

Budapest’s Property Boom Goes Nationwide

building

Albania’s Economy Booms Despite Political Infighting

Panorama view to the city Tirana Albania

Visegrad Group Looks East

Changes Are Making Ukrainian Banking More Aligned with International Standards

Hungary Seen as Riskiest Country in CEE

risk

Why Was Zapad-2017 So Important?

russian tank belarus zapad

Estonia Leads Baltics in Cutting Sugar in Food and Drink

Ukraine’s Economic Recovery: Good, But Slow

ukraine money

Business Standards Are High in SEE But Vary Widely

Aerial view of The Cathedral of the Assumption in Varna

Growth Continues for State-Owned Azerbaijan Airlines

Azerbaijan Baku - September 16 2015: View of the Heydar Aliyev International Airport sign in Baku Azerbaijan. The airport is the home of Azerbaijan Airlines the national flag carrier.

Does the Sceptre of Separatism Haunt Emerging Europe?

Szekely Land Flag

Georgian PM Reshapes and Reshuffles Cabinet

Giorgi Kvirikashvili

Romanian Car Maker Dacia Sees Sales Boom

Sables d Olonne France - May 07 2017 : Dacia Tour 2017 is a commercial operation organized by the car builder in order to present its cars throughout France - Close-up on cars

Poland’s Flying Circus

airport poland

GE Inaugurates Its New Bucharest Software Centre

Asian Outsource Developer Team Sitting At Desk Working Laptop Computer Mobile Application Software Real Office

Go East

Macedonia — Stepping Out Of the Shadow Of the Balkans

Hungary Today: Potential and Challenge

Chain bridge on Danube river in Budapest city. Hungary. Urban landscape panorama with old buildings and domes of opera

World Bank: Brexit Hides Greater Challenges to the European Union and the CEE Region

Western Ukraine Could Be an Entry Point into the Country

Prospering Czechia Still Needs a Bigger Workforce

prague emerging europe

EconMin: Bulgaria — Number One Outsourcing Destination And an Island of Stability in Europe

Doing Business Across Eurasia Could Be Easier

Eurasia emerging europe schneider group

Moldova Launches New e-Procurement System In Search For Positive Change

Photo team work process, holding contract hand, signs documents. Account managers young crew works with startup project.New idea presentation, analyze marketing reports.Blurred, film effect, horizontal.

Serbia, Belarus and Ukraine Ranked Lowly by Wharton Business School

Kyiv Ukraine - April 172017: The postal square in Kiev on Podol the Dnipro river. view of the square from the river panorama

Poland to Switch from Emerging to Developed Market by September 2018

warsaw stock exchange

Tech Giant Expands Romanian Operations

Estonia Leading CEE Country in WEF Competitiveness Index

pharmaceutical factory woman worker operating production line at pharmacy industry manufacture factory

Georgia’s Growth Continues

Batumi, Adjara, Georgia - May 27, 2016: Batumi, Adjara, Georgia. Gogebashvili Street Road And Marine Station Or Maritime Station Building Batumi On Background

Škoda too Strong for VW Group

MLADA BOLESLAV CZECH REPUBLIC - MAY 30: Skoda Octavia on conveyor line during Doors Open Day at Skoda Auto a.s. factory. Skoda auto celebrated 120 years since its founding on May 30 2015 in Mlada Boleslav.

Regional News Outlets: The Real Target of Poland’s New Media Law?

poland media

Belarus’ Economy Is Slowly Recovering From Past Declines

CEE Tech Growth Continues: Poland and the Czech Republic Lead the Way

technology

All for One, and One for All

GE

The Reality in Romania Exposes False Perceptions Of The Country

Jadranka Joksimović: Serbia Takes Its Candidacy of the EU Seriously

bigstock-Joint-Press-Conference-Of-Serb-155400338.jpg

Kaczyński Defends PiS Record

Belarus Steps Up Liberalisation of Business

belarus

EU May Offer Georgia, Moldova and Ukraine Customs Union and Schengen Access

schengen

Larisa Manastirli: Where is Bulgaria After Ten Years in the EU?

Czechs Hold Emerging Europe’s Most Powerful Passport

CEE Boosted by Positive Tourism Trends Across the Region

cruise ship in Kotor Bay Montenegro. Aerial view panorama. Kotor bay Montenegro.

Lithuania Set to Streamline Competition Legislation

Industrial dock with cranes on the quay

Slovakia: Growth Continues But Problems Remain

Lech Wałęsa: Hard Options Can Force Nations to Get Down to Work

Investigations Into the Corrupt Ukrainian Fuel and Energy Sectors

Ukrainian money hryvnia. The national currency. Corruption in Ukraine

China Agrees to Build High-Tech Business Park in Serbia

BELGRADE SERBIA - SEPTEMBER 29 2016: View on the city center and the junction of Rivers Sava and Danube in Belgrade Serbia.

Poland Is Set To Become a Large Economic Zone

Aerial view over the building materials processing factory. View from above.

Romania’s Budget Deficit ‘Should Start Alarm Bells Ringing’

BUCHAREST ROMANIA - June 29 2017: Romanian Prime Minister Mihai Tudose during a swearing-in ceremony at Cotroceni palace in Bucharest capital of Romania June 29 2017.

HSBC Reports CEE Growth Surge in Q3

romania national bank

Czech Election Result Could Delay Euro Adoption Until 2025

czech banknotes nominal value two and five thousand crowns on white background. 300 000 Kc is approximately 12 450 US dollars (USD) or 11 100 Euro (EUR)

e-Estonia: Believe the Hype

Do Your Homework First and Starting Business in Poland is Easier

Nadiya Savchenko: I Dream of a Great Ukraine

Panorama of the top part of the Andrew's Descent from Castle Hill in springtime in Kiev Ukraine.

Albania’s Construction Sector Supports the Country’s Growth

SARANDA, ALBANIA - MAY 18: View of the city Saranda, most important tourist attraction of the Albanian Riviera on May 18, 2017 in Saranda, Albania.

IMF Urges Croatia to Speed Up Reform

croatia

Automotive and Transport Companies Dominate the CEE Region

Car bodies on the production line inside automobile factory

Poland’s Q2 2017 Growth Is Stronger Than Expected

WARSAW, POLAND - MAY 07, 2016: Building Palace of Culture and Science among the modern buildings of the city

Economy Minister: Internationalisation Is the Key To the Slovenian Economy

Romanian Cabinet Reshuffled as New Splits Emerge in Ruling Party

BUCHAREST ROMANIA - MAY 25 2014: The Victoria Palace. Victoria Square.

Valga and Valka – Where Estonia and Latvia Work Together

Valga valka emerging europe

Belarus Introduces New Business-Friendly Auditing Procedures

MINSK, BELARUS - AUGUST 15, 2016: Aerial view of the southwestern part of the Minsk with Palace of Sport and old and new other buildings. Minsk is the capital and largest city of Belarus.

‘Traditional Values’: A Potent Weapon Against LGBT Rights

gay rights putin

Ukraine’s Q2 Growth Climbs

kyiv ukraine emerging europe

Lithuania Gives Innovation a StartUp

MILAN ITALY - MAY 2: People visit Lithuania pavilion at Expo universal exposition on the theme of food on MAY 2 2015 in Milan.

Kraków: Officially Emerging Europe’s Most Elegant City

Krakow. Image of Krakow Market square, Poland during sunrise.

Industrial Production Prices in New Increase

electricity

CEE Must Improve Infrastructure and Logistics

Aerial view of Gliwice Sosnica motorway junction. There are international traffic in four directions

Poland Stays Cool on Euro Adoption

Euro cash and Zloty on one photo.

CEE Lags in Business Connectivity

ANIS romanian ICT

CEE Emigrants Could Boost Their Countries’ Economies

Londoners walking through Millennium Bridge with St.Paul's Cathedral at the background after sunset - London, UK

Is Prague the New Face of Overtourism?

prague tourists

Chickens Blamed for Romanian Budget Deficit

Two white chickens or hens inside a chicken coop or hen house seen through chicken wire.

Georgia Leads Emerging Europe in Ease of Doing Business Report

Latvia Urged Not to Increase Expenditure As Economy Grows

Riga, Latvia - August, 2010: Panorama view from Riga cathedral on old town of Riga, Latvia

TV Still a Star for CME

Baltic States to Launch Combined Capital Market

capital markets

The Azerbaijani Laundromat: Why It Matters

azerbaijani money laundering

More EU Help for Belarus SMEs

GRODNO BELARUS - DECEMBER 13 2013: Seamstress in textile factory sewing with a industrial sewing machine .

Young Georgians Make Their Mark at Emerging Europe-EBRD Event

maximilien lambertson at emergeing ebrd outlook on georgia

IMF Increases Growth Forecast With Emerging Europe Prominent

Dambovita river and center of Bucharest at sunset time Romania.

Chris Lowney — What Jesuit Spirituality Can Teach Us About Global Leadership

Sunday Trading in Poland Under Renewed Threat

Montenegro Accelerates Legal Reform

montenegro law reform

Slovenia Sets Green Vehicle Deadline of 2030

ljubljana

Air Passenger Volumes Reach Record High in the Baltics

airbaltic

Estcoin: Estonia’s Own Digital Currency?

1 euro coin money (EUR) currency of European Union Estonia over blue background

GSA Names Ukraine as UK’s Offshoring Destination of the Year

map of ukraine emerging europe

Global Players Dash for Tempting CEE

dollar pound euro coin on euro background.

Ukraine Is Offering Europe Unique Combat and Technological Experience

Derek Chollet: There Is a Resurgence of Supporters of the Transatlantic Relationship

white house

Czech Republic Raises Interest Rates

czech koruna

Lviv Is the Pearl and the Soul of Ukraine

One in Five Poles Unaware of Source of Funds for 500 Plus Programme

CEE Is Key to China’s Belt and Road Initiative

Shanghai skyline Panoramic view of shanghai skyline and huangpu river Shanghai China

Estonia Proposes Bill of Rights and Responsibilities for Robots

Robotic hand accessing on laptop the virtual world of information. Concept of artificial intelligence and replacement of humans by machines.

Ukraine to Make New Privatisation Push

High Real Estate Prices at Home Force Czech Investors Abroad

Construction of the Petrin lookout tower in Prague Czech Republic

Euroscepticism in Serbia: An Image Problem?

Košice Business Matchmaking Event Brings in Hungarians

kosice, slovakia

A Risky Evaluation of Croatia’s Economy?

ZAGREB, CROATIA - JULY 17, 2017: Square Ban Josip Jelacic with tourists and trams on a summer day in Zagreb. City of Zagreb is the capital of Croatia.

EU Commissioner Launches Veiled Attack on Poland and Hungary

eu commission

Bulgaria and Romania Get EBRD SME Boost

Startup Diversity Teamwork Brainstorming Meeting Concept

Despite Public Anxieties, Migration is Playing a Key Role in ECA Growth

Bratislava city aerial panoramic view. Bratislava is the capital of Slovakia.

Lithuania Handed Top Marks for Business Services

Beautiful panorama of Vilnius Old Town taken from Gediminas hill; Lithuania

Baltic Bank Merger May Tempt Polish Heavyweight

DNB Bank Vilnius

Trans Adriatic Pipeline Will Fuel Albanian Growth

Xanthi. Greece - July 30 2017: aerial view of construction of gas pipeline Trans Adriatic Pipeline - TAP in north Greece. The pipeline starts from the Caspian sea and reaches the coast of southern Italy

CEE Nation Brands Still Behind Western Counterparts

TALLINN ESTONIA- JUNE 17: View of the modern high rise buildings on border with an old part of the city on June 17 2012 in Tallinn Estonia

Polish Labour Market Deficits Are Impacting All

Construction site with crane and building. Construction site in western europe - in Poland.

Beyond Borders: Immigration Within the EU

refugees immigrants

Azerbaijan, Georgia, Turkey Launch New ‘Silk Rail’ Link

Fitch And the World Bank: Economic Growth To Remain Solid Within CEE In 2016

Kosovo: A Population of Talented Young Entrepreneurs Waits at Europe’s Door

Polish Shoppers in Hunt for Eggs

eggs in rack

Chinese Electric Car Maker Seeks Emerging Europe Base

zhi dou d2

Non-Financial Reporting No Longer a Secondary Consideration in CEE

Baltics Seek Lockstep With High Tech States

Euro money: Macro view of euro coin and bill. Suitable for financial, monetary, euro or European Union concepts and ideas

Economic Confidence Rises Across Eurozone

Bad Payers Still Causing Problems for Romanian Firms

Close up Romanian currency note, LEI or LEU, Romania

Emerging Europe to Record Positive Growth Across the Board in 2018

coins growth

World Bank’s Doing Business Report 2016 Resume For Emerging Europe

Continental Launch Largest Ever Lithuanian Greenfield Investment

kaunas lithuania

21st century Manufacturing Arrives at Great Stone

Great stone

Growth Increase Offers Glimmer of Hope for Moldova

chisinau

Emerging Europe Makes Some Progress on Closing Gender Gap

world economic forum gender gap report

More Brexit Fears As the UK Proves To Be A Needed Member

City of London view from Waterloo Bridge. This view includes: St. Paul`s Cathedral The Gherkin Tower 42 and Blackfriars Bridge.

Effective Policies Have Strengthened the Georgian Economy

TBILISI GEORGIA Jul. 18 2017: Bridge of Peace is a bow-shaped pedestrian bridge a steel and glass construction over the Kura River in downtown Tbilisi capital of Georgia

Croatian Salaries Are Growing in Line With Other CEE Countries

Dubrovnik Croatia emerging europe

Putin Urges Belarus to End Oil Transit Through Lithuania

Athens Greece - May 27 2016: Russian President Vladimir Putin delivers

Budget Chaos Hits Romanian Leu

Different Romanian Lei Banknotes on the table

Poles Still Keen on German Jobs

Brandenburg Gate in Berlin in Germany. The Brandenburg Gate is a triumphal arch a city gate in the center of Berlin. It is one of the most known sites in Berlin.

SEE Link — Sharing SEE Europe’s Hopes for a Brighter Investment Future

IMF: Institutions Key to Sustainable Growth

IMF

Measure, Strengthen, and Grow

dacia brand

Leave a Reply

Your email address will not be published. Required fields are marked *