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The Warsaw Voice » Business » February 4, 2009
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Fending Off Crisis
February 4, 2009 By Andrzej Ratajczyk   
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The economy ministry has come up with an "action plan for stability and growth" that includes priorities such as boosting consumer and investment demand, strengthening the system of funding for small and medium-sized businesses and offering better incentives to foreign investors.

The plan also aims to develop innovation, make the labor market more flexible, and accelerate investment projects partly financed from European Union funds.

The ministry has prepared the package of anti-crisis measures in response to signs indicating that the Polish economy is slowing. The package is part of a wider anti-crisis plan prepared by the government.

The government wants to spend zl.91.3 billion on its anti-crisis measures. The economy ministry has proposed "second-chance" assistance to bankrupt entrepreneurs. To this end, support instruments in the form of financing and guarantees will be created to help businesses that face liquidity problems caused by delays in collecting debt from their business partners.

The ministry wants to allow businesses that need to temporarily downsize or suspend their operations to cut working time and reduce wages accordingly. However, working time cannot be reduced by more than 50 percent, the ministry says. Officials have also proposed amendments to rules governing taxpayers' registration and identification and the law on the National Court Register. The amendments are designed to make it easier for companies to do business.

Also planned are amendments to the banking law to make it easier for business to obtain bank loans. Businesses would be able to use their movable assets to secure loans, while creditors would have precedence in debt recovery before bankruptcy proceedings are instituted.

The economy and finance ministries also want to reduce the number of obligatory tax payments and amend the customs code so that import and export procedures would last no more than 10 days. The costs involved would thus be reduced by half.

As part of its measures for stability and growth, the economy ministry will support Polish exports to "eastern markets," especially the Commonwealth of Independent States (CIS). The ministry wants to support exporters by refinancing export loans and offering insurance and guarantees.

The ministry has also proposed greater incentives for foreign investors through "active investment marketing" based on direct contacts with prospective investors. But the ministry says efforts should be made to encourage investors already with a presence in Poland to reinvest their profits here.

The ministry wants to help businesses in which electricity bills account for a significant part of total expenditure. The ministry has also promised to remove legal barriers to electricity network projects and has proposed energy policy measures such as increased use of renewable energy and greater energy efficiency.

The ministry's proposals have met with a mixed reception among businesspeople. According to the Polish Chamber of Commerce (KIG), the plan presented by the economy ministry is vague and needs to be made more specific. KIG says many of the proposals are difficult to assess because they are too general and lack details.

As forecasts for the Polish economy have worsened, concrete measures are needed fast, experts say. Prime Minister Donald Tusk admitted in late January that, under the most pessimistic scenario, Poland's GDP may grow no more than 1.7 percent this year, instead of the recently projected 3.7 percent. According to Tusk, huge savings are needed in the national budget. Individual ministers are expected to come up with proposals for cuts in expenditure soon. The aim is to save zl.17 billion. Spending cuts will not affect households, pensioners and the healthcare system, Tusk said.

Finance minister Jacek Rostowski said the government would focus on two key anti-crisis policy measures: savings and regulatory amendments aimed at boosting business. The Cabinet has approved draft laws designed to make lending to businesses safer for banks and to encourage banks to lend more money to investors, Rostowski said.
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