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11. The Story of the Open Pension Funds and the Employee Capital Plans in Poland. Will It Succeed This Time?

Author:
Barbara Blaszczyk
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
Poland’s new Employee Capital Plans (PPK) scheme, which is mandatory for employers, started to be implemented in July 2019. The article looks at the systemic solutions applied in the programme from the perspective of the concept of the simultaneous reconstruction of the retirement pension system. The aim is to present arguments for and against the project from the point of view of various actors, and to assess the chances of success for the new system. The article offers a detailed study of legal solutions, an analysis of the literature on the subject, and reports of institutions that supervise pension funds. The results of this analysis point to the lack of cohesion between certain solutions of the 1999 pension reform and expose a lack of consistency in how the reform was carried out, which led to the eventual removal of the capital part of the pension system. The study shows that additional saving for old age is advisable in the country’s current demographic situation and necessary for both economic and social reasons. However, the systemic solutions offered by the government appear to be chiefly designated to serve short-term state interests and do not create sufficient incentives for pension plan participants to join the programme.
Topic:
Labor Issues, Employment, Social Policy, and Capital
Political Geography:
Eastern Europe and Poland

12. The significance of the tobacco product manufacturing to Poland’s economy

Author:
Adam Śmietanka, Anna Malinowska, Grzegorz Poniatowski, and Jan Hagemejer
Publication Date:
07-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report, prepared by a team of economists from CASE, is a continuation of the 2018 analysis The significance of the tobacco product manufacturing to Poland’s economy commissioned by JTI Polska Sp. z o.o. The purpose of the research whose results are presented in this report is to assess the economic significance, challenges and development prospects of the tobacco product manufacturing, trade and distribution sector in Poland. In the report we analyze a cross-section of the tobacco industry and its significance for the economy as a whole. We also present the significant barriers to the sector’s growth, i.e. the illicit market, costs of compliance and regulatory uncertainty, and we also model the long-term macroeconomic effects of potential changes in the industry. To the best of our knowledge, at the moment this is the most comprehensive economic study of the sector.
Topic:
Economic growth, Fiscal Policy, Manufacturing, Trade, and Tobacco
Political Geography:
Europe and Poland

13. The Rule of Law and its Social Reception as Determinants of Economic Development. A Comparative Analysis of Poland and Germany

Author:
Christopher Hartwell, Kateryna Karunska, Krzysztof Głowacki, and Maria Krell
Publication Date:
11-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The rule of law, by securing civil and economic rights, directly contributes to social prosperity and is one of our societies’ greatest achievements. In the European Union (EU), the rule of law is enshrined in the Treaties of its founding and is recognised not just as a necessary condition of a liberal democratic society, but also as an important requirement for a stable, effective, and sustainable market economy. In fact, it was the stability and equality of opportunity provided by the rule of law that enabled the post-war Wirtschaftswunder in Germany and the post-Communist resuscitation of the economy in Poland. But the rule of law is a living concept that is constantly evolving – both in its formal, de jure dimension, embodied in legislation, and its de facto dimension, or its reception by society. In Poland, in particular, according to the EU, the rule of law has been heavily challenged by government since 2015 and has evolved amid continued pressure exerted on the institutions which execute laws. More recently, the outbreak of the COVID-19 pandemic transformed the perception of the rule of law and its boundaries throughout the EU and beyond (Marzocchi, 2020). Against this background, this study examines the rule of law as a determinant of economic development in Germany and Poland from both the de jure and de facto perspectives.
Topic:
Economic growth, Rule of Law, Trade, and Economic Development
Political Geography:
Europe, Poland, and Germany

14. Guidebook: Direction: An Efficient State

Author:
Gvantsa Ichkiti, Hasmik Grigoryan, Agnieszka Kulesa, Salome Kandelaki, and Stanislav Bieliei
Publication Date:
12-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The Polish Decentralisation Guidebook aims at presenting in a synthetic way the experience of Poland regarding the re-introduction of local government and the decentralisation process since 1989. Its main goal is to provide representatives of central and regional authorities, experts, and representatives of opinion-forming circles in Armenia and Georgia with relevant information and knowledge. The idea of the authors of this Guidebook was to facilitate mutual learning between the countries, the exchange of good practices, and lessons learned. The territorial division of Armenia was established in 1995. Now the country has two levels of administrative division – regions and communities – and the local self-government is exercised only on the level of communities. In the case of Georgia, administrative reform aimed at introducing local government started in 1997. Currently, self-government in Georgia is exercised on just one level – in municipalities (including self-governing cities and self-governing communities). Poland’s experience, in which local government units are established on all three levels of territorial division, might be useful to Armenia and Georgia, if they wish to further reform their territorial administration and pursue decentralisation. This Guidebook is comprised of four main parts. The first part is devoted to the presentation of the Polish experience in five selected areas: Empowerment of local communities Financing of local government units Providing public services Absorption of external funds by local governments Crisis responses The second part is dedicated to the presentation and analysis of needs and main blocking points in decentralisation in Armenia, while the third one concentrates on Georgia. Both of them are structured around the five above-listed areas. The last but very most important section of this Guidebook provides a set of recommendations for Armenia and Georgia based on the Polish experience in introducing local government and decentralisation. The country-specific sections of this Guidebook were prepared mainly on the basis of the results of desk research. This included reviewing the existing literature, relevant state strategies and action plans as well as reports developed by local and international organisations. Key legal acts were also reviewed. In addition, interviews with representatives of local municipalities and other stakeholders were carried out in Armenia and Georgia. This Guidebook was developed as part of the project called ‘Direction: an efficient state. Polish experiences of decentralisation and modernisation, lessons learned for Armenia and Georgia’ co-funded by the Ministry of Foreign Affairs of the Republic of Poland. It is the joint work of three partner institutions: CASE – Center for Social and Economic Research based in Warsaw, the Tbilisi-based Georgian Institute of Politics (GIP), and the Analytical Centre on Globalization and Regional Cooperation (ACGRC) from Yerevan.
Topic:
Demographics, Labor Issues, Governance, Economic growth, Social Policy, Trade, and Decentralization
Political Geography:
Eastern Europe, Poland, and Armenia

15. Narratives of Political Unity in Times of Differentiation

Author:
Funda Tekin, Vittoria Meissner, and Nils Fabian Müller
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Heterogeneity among countries in the European Union has continuously grown through enlargement processes or the outbreak of specific crises. After reaching important outcomes such as the European Monetary Union or the Schengen Agreement, in the face of the “big bang” enlargement of 2004 both national and European Union representatives subsequently committed to the motto “united in diversity”, confident that the European project would progress and deepen. Nevertheless, the crises in the euro area posed a number of new internal and external challenges to the overall European integration process as well as the EU’s political unity in terms of member states sharing the same rights and obligations, making permanent forms of differentiated integration more likely. Against this background, the paper presents a new collected dataset to outline how the EU narrative of political unity changes during times of increasing political differentiation and consequent differentiated integration. As such, it conducts a narrative analysis in two selected cases, the period between 2000 and 2004 preceding the big bang enlargement as well as the years of the crises in the euro area between 2010 and 2014. Although the existing narrative of political unity in the EU has changed in response to the crises under the more sceptical phrase “divided in unity”, our analysis shows that differentiation is not a threat to political unity.
Topic:
Foreign Policy, Politics, Regional Integration, Institutions, and Integration
Political Geography:
Europe, France, Poland, Germany, Italy, and European Union

16. Changes in Estonia’s Climate Policy

Author:
Kinga Raś
Publication Date:
11-2019
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
Although in June, Estonia along with Poland, the Czech Republic, and Hungary blocked a political consensus statement in the European Council regarding the EU’s goal to achieve climate neutrality by 2050, in October, the country accepted the deadline. Estonia, despite relying on burning oil shale, has decided to embark on a difficult energy transition. This means that, among the EU Member States, support for ambitious EU climate policy is growing.
Topic:
Climate Change, Energy Policy, Environment, Oil, and Gas
Political Geography:
Poland, Estonia, Hungary, Czech Republic, and Central Europe

17. Germany’s Policy Regarding Western Balkans’ EU Accession

Author:
Małgorzata Pawłowska
Publication Date:
12-2019
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
President Emmanuel Macron’s opposition to the start of accession talks between the EU and Albania and Northern Macedonia may lead Germany to revise its current policy towards the Western Balkans. Germany will try to influence France’s position but, at the same time, it may decide to develop bilateral relations with the countries of the region and existing forms of cooperation in which Poland may be a partner.
Topic:
Foreign Policy, Diplomacy, Bilateral Relations, and European Union
Political Geography:
Europe, Poland, Germany, Balkans, Macedonia, and Albania

18. Study and Reports on the VAT Gap in the EU-28 Member States: 2019 Final Report

Author:
Adam Śmietanka, Alejandro Esteller Moré, Grzegorz Poniatowski, José María Durán-Cabré, and Mikhail Bonch-Osmolovsky
Publication Date:
10-2019
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This Report has been prepared for the European Commission, DG TAXUD under contract TAXUD/2017/DE/329, “Study and Reports on the VAT Gap in the EU-28 Member States” and serves as a follow-up to the six reports published between 2013 and 2018. This Study contains new estimates of the Value Added Tax (VAT) Gap for 2017, as well as updated estimates for 2013-2016. As a novelty in this series of reports, so called “fast VAT Gap estimates” are also presented the year immediately preceding the analysis, namely for 2018. In addition, the study reports the results of the econometric analysis of VAT Gap determinants initiated and initially reported in the 2018 Report (Poniatowski et al., 2018). It also scrutinises the Policy Gap in 2017 as well as the contribution that reduced rates and exemptions made to the theoretical VAT revenue losses. In 2017, growth in the European Union (EU) continued to accelerate with a combined real GDP growth of 2.5 percent, providing a sound environment for an increase in VAT collections. As a result, VAT revenue increased in all Member States (MS). An increase in the base was the main, but not the only, source for growth. Increase in compliance contributed to an approximate 1.1% increase in VAT revenue. In nominal terms, in 2017, the VAT Gap in EU-28 MS fell to EUR 137.5 billion, down from EUR 145.4 billion. In relative terms, the VAT Gap share of the VAT total tax liability (VTTL) dropped to 11.2 percent in 2017 and is the lowest value in the analysed period of 2013-2017. Fast estimates for 2018 indicate that the downward trend will continue and that VAT Gap will likely fall below EUR 130 billion in 2018. Of the EU-28, the VAT Gap as percentage of the VTTL decreased in 25 countries and increased in three. The biggest declines in the VAT Gap occurred in Malta, Poland, and Cyprus. The smallest Gaps were observed in Cyprus (0.6 percent), Luxembourg (0.7 percent), and Sweden (1.5 percent). The largest Gaps were registered in Romania (35.5 percent), Greece (33.6 percent), and Lithuania (25.3 percent). Overall, half of EU-28 MS recorded a Gap above 10.1 percent (see Figure 2.2 and Table 2.1). The Policy Gaps and its components remained stable. The average Policy Gap level was 44.5 percent, out of which 9.6 percentage points are due to the application of various reduced and super-reduced rates instead of standard rates (the Rate Gap). The countries with the most flat levels of rates in the EU, according to the Rate Gap, are Denmark (0.8 percent) and Estonia (3 percent). On the other side of spectrum are Cyprus (29.6 percent), Malta (16.5 percent), and Poland (14.6 percent). The Exemption Gap, or the average share of Ideal Revenue lost due to various exemptions, is, on average, 35 percent in the EU, whereas the Actionable Policy Gap – a combination of the Rate Gap and the Actionable Exemption Gap – is, on average, 13 percent of the Notional Ideal Revenue. The econometric analysis repeated after the 2017 Study confirmed the earlier results. We observe that the dispersion of tax rates and unemployment rate have a positive impact on the VAT Gap. Regarding the variables in hands of the administration, on the extended times series compared to the previous year, our results suggest that the nature of the expenditure of the administration, in particular IT expenditure, is more important that the amount of the overall resources.
Topic:
Economy, Economic growth, Tax Systems, and Fiscal Policy
Political Geography:
Europe, Poland, and European Union

19. EuroPACE Market Analysis

Author:
Grzegorz Poniatowski, Izabela Styczynska, Karolina Beaumont, and Karolina Zubel
Publication Date:
10-2019
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
EuroPACE is an innovative tool designed to make home renovation simple, affordable and reliable for all Europeans by combining affordable financing with people-centric technical assistance. EuroPACE offers 100% up-front financing that can be repaid over a long term of up to 25 years. The innovation lies in the collection and repayment mechanism – financing is attached to the property and is repaid regularly with charges linked to a property. Homeowners are offered logistical and technical support throughout the process and access to trained and qualified con-tractors. Thus, EuroPACE overcomes the main barriers to home renovation – lack of financing, technical knowledge and complexity of the works. The concept of EuroPACE is inspired by the success of a financing model called Property Assessed Clean Energy (PACE), launched in California in 2008. In the United States (US), the PACE market reached over USD 6 billion in funded projects, including the retrofit of over 220,000 homes, which resulted in more than 50,000 new local jobs and the creation of hundreds new companies.EuroPACE combines the best practices from the US PACE market with project partners’ substantial experience in improving energy efficiency in European buildings. EuroPACE is a three-year project that intends to assess market readiness, deploy a pilot programme in Spain and scale across Europe to four leader cities. A two-phase research (firstly – legal & fiscal readiness, and secondly – market demand) has been carried to assess the overall readiness for adaptation of this model across the European Union (EU). This document is the second phase of the EuroPACE readiness assessment developed to identify European countries most suited for EuroPACE implementation. It complements the legal and fiscal assessment by focusing on the “demand dimension” by analysing local needs for energy efficiency (EE) and renewable energy sources (RES) in residential building renovation of seven selected countries. Based on the results of legal and fiscal analysis of the EU28 MS, in October 2018 the Steering Committee Group of the EuroPACE Horizon2020 (H2020) project chose seven countries: Austria, Belgium, the Netherlands, Italy, Poland, Portugal, and Romania, for the second phase of evaluation. These countries were selected based on the scoring outlined in D2.1 and two additional considerations developed by the Steering Committee Group. First, a diverse geo-graphical distribution of the countries was an important element for the selection of these seven countries. Secondly, the knowledge and expertise of the Steering Committee Group about the national potential market opportunity was taken into consideration during the selection process. While in Austria a similar mechanism has already been tested but was unsuccessful, the country still has been chosen for further analysis. In Belgium, despite being a federal state, there is a strong local and regional interest in new financial mechanisms designed to upscale residential retrofits across the country. In the Netherlands, asset-based financial instruments are currently being discussed at the national level, which opens a window of opportunity for EuroPACE to be tested in the country. As for Italy, although the property-taxation system is far from stable, potential synergies with successful programmes like Ecobonus or Sismabonus should be explored. In Poland, nearly 70% of the 6-million residential buildings need significant energy efficiency overhaul; these buildings contribute to some of the worst air quality across the EU leading to approximately 47 thousand premature deaths annually. Portugal, given its Mediterranean climate, proves a great potential not only for EE, but also prosumer RES development, given that current incentives are far from sufficient. Romania has been chosen mainly because of its highest home-ownership rate across the EU and the most institutionalised property-related taxation, possibly setting a stable base for EuroPACE being collected alongside existing charges.
Topic:
Climate Change, Energy Policy, Environment, Fiscal Policy, and Innovation
Political Geography:
Europe, Poland, Belgium, Romania, Italy, Netherlands, Portugal, Austria, and European Union

20. EU28 legal and fiscal readiness for the adoption of an on-tax financing mechanism - EuroPACE

Author:
Izabela Styczynska and Karolina Zubel
Publication Date:
08-2019
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
EuroPACE is an innovative financial mechanism inspired by an American building improvement initiative called Property Assessed Clean Energy (PACE). The innovative character of the EuroPACE mechanism is that financing through EuroPACE is linked to the taxes paid on a property. In other words, the financing lent by a private investor is repaid through property taxes and other charges related to the buildings. EuroPACE is therefore in line with the EC’s objectives of (1) putting EE first, (2) contributing to the EU’s global leadership, and (3) empowering consumers to enable MS to reach their energy and climate targets for 2030. Last but not least, EuroPACE could contribute to the democratisation of the energy supply by offering cash-flow positive, decentralised EE solutions. The EuroPACE mechanism engages several stakeholders in the process: local government, investors, equipment installers, and homeowners. To establish the EuroPACE programme, several conditions must be satisfied, each of which are relevant for different stakeholder at different stages of the implementation. For the purpose of this report, we divided these criteria into two categories: key criteria, which make the implementation possible, and complementary criteria, which make the implementation easier. For the time being, it is a pure hypothesis to be tested with potential EuroPACE implementation. One ought to remember that residential on-tax financing is a concept in its infancy in the EU. Therefore, the methodology to evaluate the readiness of a country to implement on-tax financing is complex and consists of six stages:Identification of fiscal and regulatory conditions; Data collection; Weighting; Grading; Country SWOT analysis; Qualitative assessment.
Topic:
Climate Change, Energy Policy, Economy, Tax Systems, and Innovation
Political Geography:
Europe, Poland, and European Union