Poland to spend up to EUR 9 billion in second tranche of business aid

Rafał Guz/PAP

The government will prop up Poland's crisis-hit sectors with up to PLN 40 billion (EUR 9 billion) in state aid under the Shield 2.0 programme, Prime Minister Mateusz Morawiecki announced on Thursday.

The government has earmarked PLN 3 billion (EUR 670 million) for micro companies, PLN 5 billion (EUR 1.12 billion) for small companies and PLN 25-27 billion (EUR 5.59-6.04 billion) for medium-sized and large companies, Morawiecki said.

There are about 40 sectors that have been affected by the restrictions imposed to stem the second wave of the coronavirus pandemic, including hospitality, transport, hotels, tourism, culture and entertainment, the prime minister said.

The new government instruments will include subsidies for micro-companies, lost-business compensation, subsidies to employee wages and exemption from mandatory social insurance contributions, Morawiecki announced.

Companies will be able to apply for support in the coming days and throughout the first three months of next year, if they need to, according to the prime minister.

Although the money will come from the Polish budget, the European Commission will have to be notified of the state aid, the prime minister said, adding that the notification process may delay some of the measures.

Pawel Borys, head of the state-run Polish Development Fund that distributes government aid, told PAP that he expected the green light from the EU in January.

"We have already sent all the required documents," Borys said. "I don't think there will be any problems with getting approval. However the process will take several weeks. We should receive the approval in January."

He estimated that Polish small and medium-sized companies will receive some PLN 10 billion (EUR 2.25 billion) and large companies will get an equal amount. He also made it clear that 38 sectors will be eligible to apply for the support.

"When we launched the first financial shield (in the spring - PAP), we planned to spend PLN 100 billion (EUR 22.5 billion), but we have spent PLN 62 billion (EUR 13.86 billion) so far. We can still spend close to PLN 40 billion (EUR 8.94 billion), but I assume that the launch of the (new) programmes will channel some PLN 20 billion (EUR 4.5 billion) to Polish companies.