Polish Briefing 16 June, 2017 9:00 am   
Editorial staff

Polish Briefing: Energy security thanks to the Three Seas Initiative. Polish help for mining

What goes in Poland on 16th of June.

Energy security thanks to the Three Seas Initiative

“We want to expand the Three Seas Initiative by adding energy security,” announced on Wednesday President Andrzej Duda during a meeting with business representatives in Zagreb. The Polish president promoted the tightening of economic cooperation between Poland and Croatia.

The Polish President, together with his wife Agata Kornhauser-Duda, arrived on Monday in Croatia. On Tuesday Duda held talks with, among others, President Kolinda Grabar-Kitarović and Prime Minister Andrej Plenković.

On Wednesday the Polish and Croatian presidents met with business representatives. During the gathering Andrzej Duda stressed that strong business relations have been already forged between the two countries, which “produces very good perspectives.”

He pointed that Polish entrepreneurs were already implementing the Three Seas Initiative. Duda named a number of endeavors to back this claim, e.g. development of infrastructure, construction of an energy security system, including the terminal in Świnoujście.

The president also reminded that a while ago, Prime Minister Beata Szydło signed a memorandum on constructing the Baltic Pipe with Denmark’s Prime Minister Lars Rasmussen.

EC wants quick start of negotiations

The European Commission insists that Member States attend to the negotiation mandate draft as soon as possible. The negotiations will pertain to the legal regime for the offshore section of the Nord Stream 2.

The EC has presented a draft of the mandate, on whose basis it wants to produce a settlement on applying basic EU regulations to Nord Stream 2.

The initial talks with Moscow did not convince Brussels that Russians will want to negotiate. Last week in Astana, Maroš Šefčovič, Vice-President of the European Commission in charge of Energy Union talked to Russia’s Energy Minister, Alexander Novak.

By accepting the mandate, the EC admitted that the restrictive Third Energy Package applies only to Nord Stream’s onshore section. The EC pointed to an “exceptional situation” related to the fact that the pipeline has its starting point in Russia, outside of the EU jurisdiction. Brussels argues it does not want the pipeline to be build in a legal void, or be subject to Russian law only in exclusive European economic zones on the Baltic Sea.

Kowalczyk: VAT will be reduced if…

“The VAT rate will be reduced back to 22% if the process of tax collection improvement is successful,” stated minister Henryk Kowalczyk. He explained that the government wanted the tax revenue to increase by PLN 50 billion in 2018 in comparison to 2013.

When talking about the increased VAT rate from 22 to 23 %, the Chairman of the Permanent Committee of the Council of Ministers, Henryk Kowalczyk said that the previous government “did the wrong thing, because the right thing to do was to tighten the tax collection system instead of increasing taxes.”

“If we improve the collection system, we are not finished yet, but things are moving in the right direction, we will be able to talk about returning to the previous VAT rate,” he added.

“If the tax revenue increases in 2018 by over PLN 50 billion in comparison to 2013, we will have room to return to the previous rate,” he promised.

The 23% tax rate introduced in 2013 was supposed to go back to the previous 22% in 2017. However, the current government pushed through an amendment, which extended the duration of the increase to include the current year.

Polish help for mining

The Ministry of Energy published a working version of the Polish translation of last year’s EC decision approving an almost PLN 8 billion public help package to restructure Polish mining.

This was asked by, among others, representatives of mining trade unions.

“On 18 November 2016, the European Commission, accepted the public funding program for the black coal mining industry. We are publishing a working version of EC’s decision. The acceptance of the program by the EC was an important stage of Polish mining restructuring. The program encompasses funding to cover the current production losses of mines and extraordinary costs as part of the notification to the EC entitled <State aid for the coal mining sector between 2015 and 2018>.”