Poland’s PiS passes COVID-19 economic package to criticism from all sides

Poland’s PiS passes COVID-19 economic package to criticism from all sides
A building where suspected coronavirus (COVID-19) cases are quarantined in Wloclawek, Poland.
By Wojciech Kosc in Warsaw March 30, 2020

Poland’s parliament passed the coronavirus (COVID-19) economic package, aimed at helping an economy about to enter its biggest crisis since the 1980s, on March 28.

Poland is bracing for a sharp economic downturn in the aftermath of the coronavirus outbreak. Most optimistic estimates predict growth of below 1.5% this year but the trend is for new outlooks to tilt towards zero growth or recession, as companies are expected to lay off thousands of people and consumer demand to slump.

The package, which the ruling Law and Justice (PiS) party dubbed an “anti-crisis shield” focuses on the protection of jobs, the security of the financial system, aid to the healthcare system that is under stress from dealing with the epidemic, supporting businesses, and maintaining public investment as a means to stimulate the economy.

The PiS government wants to help businesses by easing some of their commitments, such as payments to the social insurance fund ZUS, taxes, or rent. 

The government will also cover 40% of salaries, although that will come at a cost to workers, whose work time will have to be cut 20% for employers to be eligible to file for help. Only companies that suffered a 15% drop in turnover for two months can apply to the government for salary cover.

Companies that have had to suspend activity because of the epidemic will be able to receive help from a government fund so that they can still pay their workers – but salaries will be lowered by 50%.

The self-employed or people working under so-called “trash contracts” – meaning not regular work contracts with insurance and other full-time perks – will be entitled to a one-off payment of PLN2,080 (€460) if their income dropped 15% m/m. 

Companies will also be entitled to preferential loans to help them survive the worst of the crisis, apply for moving forward tax deadlines or even cancel taxes. Transport companies – among the hardest hit – will receive a year-long break in paying their leasing credits.

The “anti-crisis shield” was passed during a night session of the parliament amidst huge controversy regarding other changes in the law that PiS managed to sneak in the package, such as changes to the electoral code.

The support measures have also been lambasted by the centrist opposition party Civic Platform (PO) and business lobbies, which said they were too modest as the fast-spreading epidemic was making the shield’s assumptions irrelevant fast.

From the Left, trade unions, and workers’ organisations there came criticism that the package focused on business too much while not spending enough to secure people’s incomes. The package also erodes labour laws by allowing employers to prolong working hours without increasing pay, they said.