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The government is talking about KPO.  Lack of funds means “real losses for Poles and the Polish economy”

The government is talking about KPO. Lack of funds means “real losses for Poles and the Polish economy”

– It is impossible to predict what the Polish authorities will do without the KPO funds: whether they will resign from these investments or whether they will finance them by issuing bonds with higher interest rates and increasing the state’s debt. In both cases, this means real losses for Poles and the Polish economy – so the uncertainty as to whether Poland will receive funds from the KPO is assessed by Seweryn Masalski from Prime TFI SA What others say?

Prime Minister Mateusz Morawiecki ensures at every possible opportunity that Poland will receive money from the National Reconstruction Plan. The government has even started spending funds from KPO under the so-called “prefinancing”. How it works? The government uses its favorite trick – it takes money from bonds issued by the Polish Development Fund. This bizarre type of “advance payment” is expensive, however. KPO are funds either free of charge or with symbolic interest. The issued bonds will have to be repaid by paying much higher interest.

Poland is not getting any closer to KPO. Politicians of the power camp “hope”

Morawiecki is convinced that the Union will give Poland money, but he has a weak basis for it. Whether we get closer to the payment of subsidies and loans can be decided by the Constitutional Tribunal, to which Andrzej Duda sent the law on the Supreme Court. Politicians treat this as a great excuse not to talk about the issue. About two weeks ago, Marcin Przydacz, head of the president’s Office of International Policy, said on TVP that the president wanted the funds from the National Reconstruction Plan to reach Poland as soon as possible. At the end of February, Andrzej Duda submitted a draft amendment to the law on the Supreme Court to the Constitutional Tribunal.

Marcin Przydacz emphasized that now everything depends on the procedure of this body. He added that if the Constitutional Court ruled as soon as possible, the president would be obliged to sign it. Marcin Przydacz emphasized that now everything depends on the procedure of this body. “Let us remind you that there are several more laws, including the windmill, the regulations of the Sejm, which are to be negotiated as part of these milestones. As the president said, this process of referral to the Constitutional Tribunal will not significantly delay this transfer of money. We want these the money went to Poland as soon as possible” – said Marcin Przydacz.

The Minister for European Union Affairs, Szymon Szynkowski vel Sek, also expressed his conviction that the Constitutional Tribunal would deal with the amendment to the law on the Supreme Court without undue delay. The politician was asked by journalists when the funds from KPO would reach Poland. He said the government was patiently waiting for the ruling of the Constitutional Court.

The amendment to the Act on the Supreme Court is a milestone of the KPO. Their fulfillment is necessary for Poland to receive EU funds for the National Reconstruction Plan. The Act provides, inter alia, that disciplinary and immunity cases of judges will be resolved by the Supreme Administrative Court, and not by the Chamber of Professional Responsibility of the Supreme Court. The act also provides for changes regarding the so-called test of independence and impartiality of a judge.

Will the government make it? Economist: “Measures important for the economy”

How much money is available and on what terms? This is explained in an interview with by Piotr Kuczyński, financial analyst at Xelion.

– Funds from KPO are very important for the Polish economy, because they will enable investments whose share in Poland’s GDP is extremely small – about 16 percent, and the Strategy for Responsible Development (2016), then Deputy Prime Minister Morawiecki, announced an increase to 25 percent We are talking about EUR 35.4 billion, i.e. about PLN 170 billion (EUR 24 billion are non-repayable grants), he explains.

He adds that the government did not apply for the entire amount, i.e. 57.6 billion euros, because it used only low-interest loans to a small extent. – It may be a bit surprising that no investments have been found that could be financed in this way – said the economist.

What without KPO money? “Real losses for Poles and the Polish economy”

Seweryn Masalski from Prime TFI SA emphasizes that in fact the National Reconstruction Plan is a project less focused on the development of the economy and more on improving the quality of life in Poland. – Its goals, set by the Polish government, are to increase the availability of high-speed Internet, reduce air and water pollution, develop rail transport, build low-cost, energy-efficient housing, improve the health service and education system.

– The economic objectives relate to the modernization of the economy: increasing funds for research and development, digitization and switching to renewable energy sources. This means that direct economic growth as a result of spending these funds will be significant, but lower than, for example, in the case of subsidies for investments in machinery. However, the long-term sense of the program seems to be very important for Poland’s potential in the future world. Thanks to this program, Polish employees will be better educated, healthier, Polish companies will be more modern, and everyone will have cheaper electricity – he says.

In his opinion, Polish companies from various industries will be employed in the implementation of these goals. First of all, we are talking about the construction sector in the construction of railways, windmills, solar farms and thermal modernization. The second beneficiary is the IT industry in the context of digitization of companies and public institutions. Manufacturers of railway and bus rolling stock will also benefit.

– The scale of the transfer is significant: a total of EUR 36 billion is almost half of the funds promised to Poland under the cohesion policy for 2021-2027. The lack of these funds means slightly lower economic growth in the coming years (or more recession). KPO funds are transfers in the European currency, so the EUR/PLN exchange rate will be higher without them. Two-thirds of the funds are a non-repayable subsidy, and one-third a low-interest loan, on much better terms than the Ministry of Finance is able to obtain on the market, he says.

It is impossible to predict what the Polish authorities will do without the KPO funds: whether they will resign from these investments or whether they will finance them by issuing higher-interest bonds and increasing the state’s debt. In both cases, this means real losses for Poles and the Polish economy

– concludes Seweryn Masalski.

The Polish economy is waiting for an impulse. Money from KPO is a “disinflation impulse”

Will the KPO funds give an impulse to our economy? What will happen to us if we don’t get these funds? Dariusz Świniarski, Manager of TFI Skarbiec portfolios, emphasizes that the value of KPO for Poland is EUR 35.4 billion, of which EUR 23.9 billion are subsidies, and EUR 11.5 billion is a low-interest loan, half less expensive than the one currently lent by the State Treasury.

– Converted to zlotys, it is about PLN 160 billion, and in relation to GDP, it is 6.1 percent. Due to the multiplier effect, the inflow of funds from KPO will have a stronger impact on the domestic economy. Due to the spreading of the program over 4 years, the impact on GDP growth will be approx. 1.5 pp. per year. Industries with exposure to green energy, implementing the plan to move away from obtaining energy from fossil fuels, i.e. companies building offshore and onshore wind farms, he explains.

As he emphasizes, the second group of beneficiaries will be companies providing products and services in the field of digital transformation, which will help reduce the digital divide and increase the availability of Internet connections with a capacity of over 100 Mb/s.

– The inflow of funds from KPO may positively translate into a weakening of CPI inflation dynamics in the country through the currency channel. The inflow of over EUR 35 billion will act towards the strengthening of the PLN against the main currencies, which will reduce the cost of importing energy resources to Poland and will have a disinflationary effect, says Dariusz Świniarski, Portfolio Manager at TFI Skarbiec.

According to Jolanta Wujek, CEO of Confirm, funds from KPO may prove to be a powerful injection that will strengthen the economy and the construction industry. – It is the construction sector that has a chance for faster development and expansion of its offer thanks to KPO. So far, it has been mostly adapted to traditional construction. There is a chance to change that. The construction of wind farms and other installations related to RES, the expansion of railways and rail transport, investments in thermal insulation of houses or the construction of cheap apartments are a very good prospect for the construction industry, she says.

He emphasizes that the digital transformation, which, according to the announcement, is to be financed from KPO, will also not do without the support of construction companies. – Such projects require the construction of specialized infrastructure for data transmission, telecommunication installations or poles. With such high financial outlays and large investments, we can hope that the labor market will also develop, which may additionally strengthen our economy – he concludes.

Source: Gazeta

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