Poland considers the priorities listed by Malta for its EU Council presidency as being “very good” because they tackle issues Warsaw is interested in.
Officials at the Ministry of Economic Development said that, like Malta, Poland too thought that the internal market and industry were very important and focusing on them would put industry on the main road of the competitiveness policy in the EU.
They complain that industry was forgotten in recent years, with the EU only speaking about services.
Malta took part in the Friends of Industry conference that was held in the Polish capital in April. The meeting called for the necessary policy changes to strengthen the competitiveness of European industry and highlighted the contemporary challenges connected with innovations through digitalisation, leading to changes of industrial production chains and business models.
The participants deemed it necessary to promote the most efficient regulatory and non-regulatory tools, such as harmonisation and mutual recognition, to avoid business having to face the costs of the existence of 28 national markets.
Describing the single market as the EU’s greatest asset, Malta says in its presidency programme that by collectively managing to fully exploit the single market and develop the digital single market and complete the internal energy market, economies, businesses and families would benefit tangibly by removing barriers to trade and improving protection and access to services for consumers.
The Polish officials were unable to explain why the industry aspect was “forgotten” by the European Commission. Industry is a main contributor to the country’s GDP.
Warsaw is urging Brussels to publish a communication on industrial policy but this does not seem to be on the agenda for 2017. It, therefore, welcomes the Maltese presidency’s decision to stress the industrial policy aspect, which will feature on the agenda of an informal meeting scheduled for April 5 and 6.
When asked whether there were any particular issues Poland would like the Maltese presidency to stress, the officials said they expected a smooth implementation of the single market strategy, some initiatives in the industry policy sector and legislative proposals under the single market strategy.
In terms of the single market, the biggest threat to Poland has to do with the free movement of persons. What happens with regard to Brexit is also crucial to Warsaw because there are more than 500,000 Polish people residing in the UK and they are uncertain of their future. Warsaw is hoping their status will remain unchanged but it all depends on the stand adopted by the British government.
“While the British people in Poland are well and safe, our people in the UK are facing hate crime and unpleasant situations,” one of the officials said.
The Polish constitute the second biggest ethnic group in the UK after Indian nationals.
The second most important issue for Poland after the free movement of people is the posting of workers. A posted worker is an employee sent by his employer to carry out a service in another EU member state on a temporary basis.
Fresh proposals by the European Commission last March to the posting of persons directive are worrying Poland because it would basically mean that any posted worker should receive the same pay as the local worker.
More than the principle of equal pay for equal work, the main bone of contention for Polish entrepreneurs is linked to the administrative burdens involved.
Also of concern to Warsaw are what officials termed as protectionist measures by member states, which, they insist, are increasing. As an example they mention the minimum wage.
A prime concern for Poland in the industrial policy field is the number of laws binding the various industrial sectors. For the past two years, Warsaw has been asking the Commission to publish a list of such legislation, which is quite long. For example, in the automobile sector, where Poland has a big interest, there are about 80 pieces of legislation.
Industrial policy, the Polish officials point out, is the competence of member states but, they quickly add, it is very much governed by regulations within the internal market policy. “We would like to have a communication describing how the Commission sees the situation now and show the influence the initiatives taken have had on industry,” one official said.
“What we want is that, rather than taking action when there is a problem, as has happened in the case of steel, we analyse the situation, make forecasts and address the issues before they get out of hand. We need to know what the real situation is like,” he added.
Problems emanating from the single market were also raised by the European Affairs Committee at the Ministry of Foreign Affairs.
They see divergences between eurozone members and those outside and argue that the single market would work better if “the natural process of convergence is allowed to take its course”.
The Polish government is opposed to a “two-speed Europe: the euro area integrating further and moving away and non-euro member states remaining somewhere on the outskirts”. Warsaw is quick to point out it has no intention of stopping euro area members to seek further integration but it is insisting that this cannot be done to the detriment of the internal market which, Poland insists, should remain open and accessible to all member states.
For Poland the single market is one of the main achievements of European integration. What worries Warsaw are what officials term as practices by national governments of member states aimed at restricting the freedoms of the internal market.
Fact sheet
The Polish Information and Foreign Investment Agency, which promotes investment opportunities in Poland, lists four main “value propositions”: location and economic stability, an attractive labour market, a mature business environment and appealing investment incentives.
Poland’s main drivers of economic growth (GDP grew by 3.6 per cent in 2015) are net exports, domestic demand, investments and EU funds.
The main pillars of economic performance are: internal demand (38.5 million population), productivity improvements (up 25 per cent between 2005 and 2015), exports (€3.5 billion foreign trade surplus in 2015), EU funds inflow (Poland is set to invest €82.5 billion between 2014-2020, making it the single largest recipient of the EU funds), FDI inflows (it had €171.6 billion of FDI stock at the end of 2014) and macroeconomic stability (public debt is 50 per cent of GDP, fiscal deficit below three per cent and banking sector is well capitalised and efficient).
The 2016 EY European Attractiveness Survey, Poland ranked fifth for FDI. Poland says its comparative advantages are the quality/cost ratio of labour, an improving infrastructure and social and economic stability.
The World Economic Forum ranked Poland 36th in the Global Competitiveness Index in 2016. It featured 25th in the World Bank’s Doing Business 2016 report.
In 2015, Poland posted a positive trade balance (3.7 per cent) for the first time in its history. The value of exports grew by 150.3 per cent between 2005 and 2015. Top exports are yachts, vehicles and automotive accessories, furniture, windows and doors, cosmetics, tobacco and alcohol, apples and poultry meat. The gaming industry is a recent success in exports.
■ Ray Bugeja visited Poland as guest of the Polish Ministry for Foreign Affairs.