On Wednesday (18 March 2020), the President and Prime Minister announced a relief package worth PLN 212bn to counter the fallout from the coronavirus outbreak. Although full details of the relief measures are not yet available, it is clear that the stimulus plan is going to be massive by Polish standards. The majority of the funds are intended to help struggling businesses.
The package, nicknamed the “anti-crisis shield,” will be based on five pillars:
- labor market relief measures,
- business relief measures,
- additional funding for health services,
- financial sector security measures,
- public investment package.
The measures making up the first pillar are designed to help workers keep their jobs. The government will contribute to the salaries paid by struggling businesses (it is not yet clear what criteria businesses and employees will need to satisfy to qualify for the help). The government will cover up to 40% of average salary paid on the basis of an employment contract, with the employers paying the other 40%. In case of self-employed persons and those working under civil-law contracts, 80% of the minimum salary will be paid from public funds. The allowances for parents who need to look after a child due to the closure of day care facilities will be also extended. The Office of Competition and Consumer Protection (UOKiK) and other government agencies dealing with price control are to implement measures to counter excessive pricing.
The measures to be implemented as part of the second pillar are primarily intended to inject liquidity into the economy and will be handled by development institutions, as defined in the Development Institutions Act – mainly the Polish Development Bank (BGK), the Polish Development Fund (PFR) and the Industrial Development Agency (ARP). Loan guarantee will be increased to 80% of the loan. Businesses will be also offered preferential micro-loans of up to PLN 5thous. A helping hand is also extended to the transport sector, with ARP offering to cover a part of operational lease payments owed by companies operating in the sector. It was also announced that businesses will be able to delay social security payments or divide them into instalments. There are plans that contractual penalties stipulated in contracts executed under the Public Procurement Law will not be enforced. Unlike in Germany, the government was silent on the extension of bankruptcy filing deadline.
As part of the third pillar, the health services are due to receive PLN 7.5bn, which especially means stepping up the financing for infectious diseases hospitals.
The measures covered by the forth pillar aim to increase the security of the financial sector, incl. bank deposits, however, detailed information about the solutions have yet to be provided by the government, cooperating with the Polish Financial Supervision Authority (KNF) and the National Bank of Poland (NBP).
The last pillar covers a boost to public investment worth PLN 30bn. The investments are to focus on improving energy and transport infrastructure as well as digitalization and environment protection.
Poland’s leaders paint a picture of a massive and ambitious stimulus plan to save the economy from the coronavirus crisis. The President stated that details of the legislation about to be passed would be available in the days to come. We will keep you up to date on the latest developments.