Three crises – security, inflation and energy

The whole world is now affected by energy, inflation and security crises. Russian aggression on Ukraine caused interruption in supply chain of energy fuels and food. A year ago, we experienced the first attacks on our Polish-Belarusian border, which is also the eastern border of the European Union and NATO. Hybrid actions of the Belarusian regime were supposed to lead to the crisis in our region. The government opposed these actions by introducing a number of solutions and by building almost 186 km of a physical barrier on the border with Belarus.

- All aspects of the crisis are at the same time in some correlation with each other. Energy, inflation and security crisis – said the head of Polish government. And added: - Expecting the coming of this crisis, as we already had its signal over a year ago due to the situation in Belarus, we have prepared projects, that were supposed to shield Polish economy. We have also prepared projects, that should allow our economy to emerge from the crisis.

Direct help of government during economic crisis

High inflation is one of the challenges faced by the whole Europe. The government reduced the taxes to possibly mitigate the effects of inflation among Polish men and women. We increased tax-free personal allowance and reduced income tax from 17% to 12%. We also increased second tax threshold to PLN 120 thousand. In addition we introduced solutions under Government Anti-Inflation Shield. It is reduction:

• from 5% to 0% VAT tax rate on the basic food products,
• from 8% to 0% VAT tax rate on natural gas,
• from 23% to 5% VAT tax rate on electrical power,
• from 8% to 5% VAT tax rate on systemic heating (heating from radiators),
• from 23% to 8% VAT tax rate on motor fuels
• from 8% to 0% of VAT tax rate on fertilizers and some agents in support of agricultural production
• excluding the sales of some motor fuels from sales tax,
• reducing the excise duty on: electrical energy, specific motor fuels and light fuel oil – down to the minimum level at the EU.

Government investments – development of Polish economy

We launched further investment programs in cooperation with Bank Gospodarstwa Krajowego.

-Together with BGK we have prepared programs, which will create special financial, credit and derivative assembly for the implementation of infrastructure and investment projects, because we know, that this is the way to create the driving force to emerge from this crisis – said the Prime Minister. And added: - We will continue our actions looking at the stability of public finance.

- We will successfully emerge from the crisis. Firstly, the stability of public finances allows it, secondly, the seeds of investments that we have sown through the Strategic Investments Program will pay off in the coming years. Entrepreneurs know, that there is a large wave of public and local government procurement - financed, refinanced from public debt coming. It will be the driving force of the future development – said the head of polish government.

Aid package for energy-intensive enterprises

The government also works on instruments that should support food production by reducing the cost of fertilizers. High fertilizer prices are directly related to high gas costs. We will prepare appropriate instruments so that at least several hundred enterprises in Poland, which obviously belong to the group of energy-intensive enterprises, can at least partially compensate for very high energy costs in their income statements.

- We are discussing how to construct a system of subsidies and, at the same time, incentives for energy-intensive industries despite these gas prices. So that they do not stop their production – said Prime Minister Mateusz Morawiecki. And added: - In the near future, we will be offering to at least several hundred enterprises - large, medium and the largest, including those producing fertilizers - a special package for energy-intensive enterprises financed from the Polish budget.

Independence from Russian raw materials.

Since the beginning of the war in Ukraine Poland is looking for new sources of import of energy fuels. We are constantly looking for new supplies of gas, coal and oil. Soon, the LNG terminal - Baltic Pipe, through which blue fuel from Norway will be pumped to our country, will be opened.

Prime Minister Mateusz Morawiecki recently participated in Baltic Summit in Copenhagen dedicated to energy and climate policy. Poland favours two solutions. The first is the reduction of energy costs by reducing the costs of ETS, i.e. CO2 emission allowances, at least temporarily. The second concerns the change in pricing. Renewable energy sources are the cheapest. At the very end there is gas, which is the most expensive.

- We have to prepare a system that will be resilient in times of crisis. The answer to this crisis is such a reconstruction of the mechanism of constructing prices within the European Union, that will lead to the reduction of this price by taking the most expensive sources outside the mathematical bracket - emphasized the Prime Minister.