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The Warsaw Voice » Business » June 17, 2009
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Gov't Approves Anti-Crisis Package
June 17, 2009 By Andrzej Ratajczyk   
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After months of discussion and negotiations, in early June the government approved a package of anti-crisis measures designed to make it easier for workers and employers to weather the crisis.

Under the proposal, businesses in trouble would be offered assistance from the government over a period of two years.

The package of anti-crisis measures proposed by the government includes changes to labor law regulating matters such as flexible work time arrangements, temporary employment, financial assistance to troubled businesses, and subsidies for employee training. "The main aim of the draft is to help save jobs," said Jolanta Fedak, the labor minister.

Almost 250,000 people working for troubled businesses may be covered by direct financial assistance. Some workers would be able to take part in training courses and postgraduate studies.

Under the government-proposed draft, employers will be allowed to temporarily reduce the working time of their staff. Businesses that recorded an at least 30-percent drop in sales for four consecutive quarters before applying for assistance-compared with the period from the beginning of July 2007 to the end of June 2008-will be eligible for this kind of support. The anti-crisis package would remain in force for two years.

The business community has generally welcomed the draft, though some entrepreneurial organizations have expressed reservations.

The Polish Confederation of Private Employers (PKPP) Lewiatan has praised the proposal for allowing employers to average working time over a period of 12 months and for introducing flexible work hours while retaining daily and weekly rest periods. The organization also lauded the government for setting aside money for retaining jobs and agreed with government officials that this period of economic downturn should be used to improve employee qualifications.

"The idea behind the package is simple-it is better to survive the difficult period together, even with lower wages, than to have group layoffs and get rid of workers, who are the key asset of many businesses," said Henryka Bochniarz, head of PKPP Lewiatan.

The organization's experts say the new measures will have to be monitored and modified on an ongoing basis if the need arises. This is because the proposed measures are new to the Polish labor market and it is difficult to predict what kind of impact they will have on the economy, the experts said.

The Confederation of Polish Employers (KPP) called the anti-crisis package a step in the right direction, but voiced some reservations. The organization said the sales-decrease criterion that businesses would have to meet to receive support from the state should be lower because the 30-percent figure proposed by the government would actually mean bankruptcy for many businesses.

The draft law is part of an anti-crisis agenda unveiled by the government at the end of November last year. The government says the main goal of the zl.91-billion package is to ensure financial stability and stimulate economic growth. Half the money has been set aside for guarantees for banks and businesses. The government also plans to speed up projects partially funded by the European Union, with zl.16.8 billion to be spent for this purpose.

But to receive the assistance promised by the government, employers and employees will have to wait a few months before the proposed regulations come into force. Luckily, the Polish economy is doing better than most other economies in the European Union.

According to the Central Statistical Office (GUS), in the first quarter of this year Poland's gross domestic product grew 0.8 percent year on year-an excellent showing considering that Poland, Cyprus and Greece were the only European countries that recorded a positive growth rate in this period, experts say.

In the first quarter, consumer spending and business investment continued to grow, according to GUS. But as inventories shrank, domestic demand ceased to be the main driver behind the economy, while foreign demand took over as the key driving force.

Experts at the economy ministry project that Poland's economic growth rate will remain slightly above zero in the coming quarters. Trends on the credit market and the outcome of global measures designed to counter the crisis will have a decisive impact on what happens in the Polish economy, experts say.

Meanwhile, according to the EU's statistics office, the Eurostat, Poland's seasonally adjusted growth rate in the first quarter was 1.9 percent in year-on-year terms. At the same time, the EU economy contracted by 4.5 percent and the euro-zone economy shrank by 4.8 percent year on year. On a quarterly basis, the EU and euro-zone economies contracted by 2.4 percent and 2.5 percent respectively, while the Polish economy grew by 0.4 percent. In the first quarter of this year, only Poland and Cyprus recorded a positive rate of economic growth compared with the first quarter of last year. Latvia, Estonia and Lithuania experienced the sharpest contraction, by 18.6 percent, 15.6 percent and 11.8 percent respectively.
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