EC gives green light to Poland's new state aid package

The prime minister said that the shield includes "a number of instruments that, on the one hand, are to compensate for costs and, on the other hand, are to be a financial injection for those most affected (by the pandemic)." Mateusz Marek/PAP

The European Commission has given the go-ahead for the launch of Poland's so called Financial Shield 2.0, a state aid package addressed to enterprises hit by the effects of the coronavirus pandemic.

"We received the green light from the European Commission to involve national funds. Now we will quickly adopt appropriate legislation to launch a branch shield (worth) at least PLN 35 billion (EUR 7.77 billion)," Polish Prime Minister Mateusz Morawiecki told a Wednesday press conference.

The prime minister said that the shield includes "a number of instruments that, on the one hand, are to compensate for costs and, on the other hand, are to be a financial injection for those most affected (by the pandemic)."

Morawiecki also announced a PLN 1 billion (EUR 220 million) shield to support Poland's worst-hit regions. Most of the funds are to be directed to municipalities and districts in southern Poland which were especially affected by the recently introduced ban on winter tourism.

The prime minister said that under the first anti-crisis shield, over PLN 150 billion (EUR 33.32 billion) had been transferred via various instruments to companies, including PLN 60.8 billion (EUR 13.51 billion) in a direct financial injection from the Polish Development Fund's financial shield. "All this allowed us to preserve the value of the economy, to upkeep the value of individual sectors for new and, I hope, better times in 2021."

Morawiecki said the Polish economy had a chance to return to the pre-pandemic levels at the end of 2021 or in early 2022. "Today, we have an opportunity, as reflected in OECD and European Commission data, to return to the pre-pandemic state at the end of the next year or at the beginning of the next," said the prime minister.

Morawiecki also said that financial shields were protecting jobs and that the number of employed was higher than in the previous year. Hundreds of thousands of new jobs have been created, said the prime minister. "This can be seen in incoming data. The second lowest unemployment rate in the EU. (...) According to the European Commission, unemployment in Poland is slightly above 3 percent," said Morawiecki.

The Financial Shield 2.0 is a continuation, with some modifications, of programmes for large companies, micro-enterprises and the SME sector announced during the first wave of the pandemic. Its main goal is to help entrepreneurs maintain liquidity and financial stability by providing them with financing on preferential terms, as well as protecting jobs.

The shield is intended to help companies from 38 industries that had to limit or suspend their activities due to the epidemiological situation. The value of aid for micro, small and medium-sized enterprises is PLN 10 billion (EUR 2.22 billion) and PLN 25 billion (EUR 5.55 billion) for large enterprises.