I’m probably more of a pessimist, but I don’t bet on the fact that it will “fix itself”. The difference between the dynamics of the economy of Poland and our country weakens the “middle income trap” hypothesis. A look at the EU and US data suggests that many EU countries have significantly better results than the US, and we must not forget that the necessary reduction of budget deficits will slow down growth a bit.
Compatriots, come back
According to economic theory, growth is driven by two variables: labor force and productivity. The lack of “manpower” is holding our economy back. Its quality must be improved in the future by a better functioning education system. In the short term, however, we must bet on the “mobilization of existing resources”. Mainly by facilitating the employment of parents of young children, which will not be possible without improving the availability of services. It is also highly desirable to create such conditions in order to increase the return rate of young people studying abroad. In the case where the lack of manpower hinders the development of companies, it is very important to enable the arrival of these people from abroad.
More complex is the area of productivity, which is closely linked to investment. Here it is essential to start from the assumption that the path to growth leads through the existence of a competitive and dynamic economy, where the state is not the owner dictating prices and production. Instead, it creates clear rules and enforces them. In the area of investments, we should first of all try to focus on new, strategic ones, the massive onset of which is connected with the starting transformation of economies to low-emission ones. In order to support these investments, our conditions must be comparable to other EU countries. And not just financial. European rules assume a year for a number of investments to obtain authorization through a single point of contact. If we want to succeed, we must not perform worse.
Equally important is the support of investments by existing companies, especially in the mentioned strategic areas. A good way can be in the form of super depreciation, i.e. tax depreciation increased against the value of investments, for example by a fifth. Let’s focus on clean energy and new technologies. And in order to motivate companies to make quick decisions, he would pay for a limited period of time, perhaps two years.
At the same time, investments in energy have a privileged position. In simple terms, these must not only ensure safe supplies, but also aim for an energomix that will provide energy at a low price for companies and citizens. That is, at a price comparable to the costs in the countries of our economic competitors, mainly Germany.
It is then highly urgent to speed up the development of renewable sources, storage, aggregation and flexibility as much as possible. And at the same time prepare for a relatively rapid loss of price competitiveness of electricity production from coal by building new flexible sources. It is not complicated, many countries have gone through it or are going through it. What is “shocking” to us is that the time to make such changes is in units of years.
The EU will send us a thousand billion
The transformation of the economy and the necessary investments are expensive. Covering their costs can be difficult for companies, households and the state. Thanks to the solidarity nature of the EU, we have hundreds of billions of crowns available to support the transformation. The largest source is the Modernization Fund, and by no means the only one. In summary, by the end of the decade, the European Union will provide our country with more than a thousand billion crowns. But this money needs to be used efficiently. This requires a systemic change from a certain departmentalism to a project approach.
Digitization in the area of taxes also makes a lot of sense. There will be an electronic invoicing standard in the EU, which we should introduce as soon as possible. It will make life easier for payers and help combat fraud that reduces state revenues. Another logical goal is to finally create a unified collection point and a simplified digital portal for the administration of taxes for entrepreneurs and small businesses.
The evergreen at the end is of course the adoption of the euro. Its rejection goes against the effort to accelerate the growth of our economy, as the risks and costs associated with fluctuations in the exchange rate of the koruna hamper the economy. In summary, it is clear that our country has lost the engines of growth that worked in the past decades. We no longer have above-average infrastructure, cheap energy and raw materials, or low wages. The listed, well-implemented proposals can accelerate growth even in a relatively short horizon. Not using them would be a big mistake.
The author is an MEP for TOP 09