We live in amazing times. The last few months have been marked by fear for health and life, anxiety for the future.
The coronavirus pandemic could really have taken us back to the 1990s. One need only look at the disastrous economic data of some countries, even in Europe, to see that the gloomy scenario was not just a disaster movie fantasy. However, in Poland this did not happen because, unlike in the 1990s, the citizens were able to count on a state that is actively engaged in organizing aid for all those who need it. Unprecedented support under an anti-crisis shield and a financial shield has enabled us to stop the free fall of GDP for 2020 to less than 3%. An even greater success is that they have managed to keep the unemployment rate at around 3%.
Other data confirm that, despite the crisis, the Polish economy is doing very well. A few months ago the European Commission indicated Poland as one of the four EU member states to have both short and long term stability of public finances ensured. In a situation like this there is only one mistake that can be made: deciding that things are going in the right direction and stop acting.
Crisis: Opportunity or Disaster?
A crisis you don’t learn from is a catastrophe. A crisis that, on the other hand, is read and understood correctly is not only an opportunity, but also an accelerator of change: this is how the idea behind the “Polish Deal” can be summarized in two sentences.
In the face of the Covid-19 crisis, we must therefore act as doctors did in the face of the same coronavirus. Having no specific cure, experience tells us to act on the symptoms. Historical experience teaches us that the response to a crisis must be greater state activity, because a crisis must be managed and not left to itself.
In 1933, US President Franklin D. Roosevelt announced the New Deal, a response to the Great Depression: a program of reforms to revive the economy and exports, as well as massive public investment. This is the scenario that inspires Poland today.
“Polish Deal” or a new quality
The objectives of the “Polish Deal” include not only the recovery from the pandemic, but also the reshaping of the Polish economic and social system in order to make it more resistant to future moments of crisis, more equitable and capable of bringing Poland to a new level of development.
The diagnosis of pandemic evils had to begin with an analysis of the state of our health system. Covid-19 has brought the health sector of all countries, even the richest ones, to the brink of collapse. It was no different in Poland. Without the decisive policy of restrictions and the construction of a network of temporary hospitals, carried out at an extraordinary pace, our country too would have fallen into an epidemic catastrophe. It is even difficult to imagine its scale and the chaos that could have ensued if we had not previously digitized the healthcare system significantly.
Over the past 5 years, healthcare spending has exceeded € 22 billion, yet its quality is still insufficient. If we want to make a qualitative leap that brings Poland to the level of the West, we must rapidly accelerate the march towards allocating 7% of GDP to health.
Polish tax paradox
This means changing the healthcare financing model and thus changing the tax system. Until now, Poland was the only country where part of the health contribution was tax deductible. Although the Polish tax system is nominally progressive, it has in fact become regressive: people with lower incomes pay proportionately more taxes than those with higher incomes.
The Polish fiscal disorder not only went against the sense of justice and prevented the construction of social cohesion, but above all it favored the increase of inequalities and, in a situation of crisis, these phenomena have strengthened.
Towards a Poland of real solidarity
The “Polish Deal” addresses these challenges because it is born from the spirit of authentic solidarity. A solidarity understood in its horizontal dimension, which means concern for social justice, the leveling of income inequalities and support for those who earn less. We have therefore proposed a tax-free amount of around 7,000 euros, a threshold comparable to that in force in other European countries. But the “Polish Deal” is also solidarity understood in its vertical dimension, which we can call intergenerational solidarity. On the one hand, we turn to the past to give greater support to the elderly with a tax-free pension, with a return to the values without which it is difficult to imagine the future of Polish society and of Europe as a whole. On the other hand, we try to guarantee ourselves the means to take care of future generations, to build the foundations for a lasting development that allows our children to earn better and work in better conditions and, “last but not least”, to live in an environment where you can breathe clean air, instead of reading it as something rationed, only for the elect.
Text published simultaneously in the Polish monthly “Wszystko Co Najważniejsze” as part of the project carried out with the Polish Institute of National Memory (Instytut Pamięci Narodowej) and with the Polish National Bank (Narodowy Bank Polski).
* Prime Minister of Poland