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Did we get into the corner? “This is a sick situation”

Did we get into the corner?  "This is a sick situation"

Should EU policy on energy prices change?

Bowie Boris, head of the Polish Development Fund and right-hand man of Prime Minister Morawiecki, does not leave a dry line with this kind of solution. During the session on the future of the Polish economy at the Karpacz Economic Forum, he said that “The EU needs to review its energy policy,” which has focused on market-oriented energy for the past 20 years. He explained that the European Union hoped that the price would be subject to market mechanisms and that this would lead to increased competition.

Therefore, the entire energy system has shifted from long-term contracts to the exchange market that sets prices on a daily basis, leaving it vulnerable to “massive speculation”. – This is a sick condition – pointed out.

– In addition, the marketing of energy prices was accompanied by an excessive dependence on raw materials in Russia. Mainly Germany, which sold its warehouses and did not build LNG terminals. He added that they simply stopped investing in this area.

– It cannot be the case that only Poland will offer maximum prices for some energy transmission companies. Uniform EU mechanisms should be developed in this regard, most of them support them, but for reasons unknown to me, they are blocked by 2-3 countries. This is a shock we haven’t dealt with in decades. So I hope that the Czech presidency will propose a mechanism acceptable to all, which will reduce these prices to lower levels, as explained by the head of the Polish Development Fund.

Quarrel over the Polish economy. Could something better be done?

The speakers then went on to discuss the prospects for the Polish economy. Over the past two years, according to Boris, local policies have been directed at mitigating the effects of pain and using drugs in the form of tax cuts to citizens.

Dr. Sawmir Dodik responded to these words, Chief Economist of the Civil Development Forum and a former long-term employee of the Ministry of Finance. In his opinion, the government took the easy way out by cutting taxes. As he explained, the aid should go to the people most in need, and not to a large group of citizens, because this only serves to ignite the inflationary flame even more. Bowie Boris rejected this argument, Based on the practice of these solutions and the effectiveness of the policy, which must balance the time we introduce the changes and their details.

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I can not imagine collecting data from families. (…) No way. The simplest form of support was used. It is an effective policy. We don’t have a deficit in the entire fiscal sector. All the stories about fighting fires with gasoline are untrue. The data tells otherwise. On the other hand, I agree that we are now mitigating the short-term effects of the crisis in order to protect the economic potential and not lead to a recession, but we really cannot lose sight of the fact that we should transform ourselves realistically – he said.

This, in turn, was answered by Dodik, referring to the act that was under the rule of Beata Szedo, which stopped the expansion of the wild windmills with a single cut. – It was a mistake – Paweł Borys summarized adding that Now you should focus, among other things abroad – Windmills placed in the Baltic Sea. – It happens repeat.

The Polish economy needs changes

On the other hand, Marek Lipka, Commercial Director of Carrefour Polska, confirmed during the discussion of that “The European Union has a problem with the speed of decision-making.”

In his opinion, what we must do to move forward dynamically as a country is to focus on what Poland can produce as one of the major market players in Europe – Food.

In turn, Kamil Sobolevsky, chief economist at Employers of the Republic of Poland, drew attention to another aspect of our economy – labor productivity and investments.

The basis for a correct response to a crisis is a diagnosis of what happened. By saving the country with remittances, we can condemn it, but that is not the point. The essence of this crisis is the crisis of scarcity – Claimed expert employers of the Republic of Poland.

In his opinion, in order to face the crisis of scarcity, one must either increase production or reduce consumption, which is “painful.” So how do we bear production in this regard?

– Will we save production by taking unprecedented amounts of pain relievers? I honestly doubt. Can we say that everyone gets painkillers? no. Entrepreneurs don’t get, and in response to howling pain, they get the Polish deal. Production is done in companies, not in offices, not in boxes, not in local governments. So what can we do to increase production rather than decrease it? We can struggle to rationalize consumption and say that, for example, shop windows after 22 do not have to open, every second lantern can burn out, etc. First of all, what we can do to increase the efficiency of work is to give the woodcutter, i.e. companies, an electric saw instead of a sharp axe. We have to ask the company, and for that we need a political dialogue with the employers on how to grow production to take care of the problem of scarcity. For this, investments are needed, which have been significantly lower in terms of GDP in recent years, Sobolevsky said.

Will GDP fall or rise next year?

– I think that in 2-3 years we will come out of this shock with a debt of less than 50% of GDP. We say we are in danger of stagflation – that is, long-term inflation along with stagnation. There is and will not be stagflation in Poland. Not in our job market. We have almost full employment in the economy and wage pressure, So I see a bigger threat to inflation than stagflation. Nor do I completely agree that we are facing 5 years of an energy crisis. The head of the Polish Development Fund argued that everything is happening three times faster at present.

Dr. Saoumir Dodik from FOR was surprised by these words. – I am amazed that the Polish government is so optimistic that it imitated those who erred – He said. Then remember the words of Janet Yellen, the US Treasury Secretary, and Jarom Powell, the current head of the central bank, who admitted their mistake about the temporary nature of inflation.

– If we dispense drugs (Dudek is about donating money by PiS – editorial note), they will damage the liver and kidneys, and if we overdose, they will stop working. You have to recover immediately and not wait, which means that a parallel restructuring is necessary, which is associated with accepting high prices He said.

– If we do not stop the pace of wind energy development, the volume we have of Russian coal may generate. This crisis will continue and we need an aid plan for those who need it most, a restructuring plan, and a savings plan. Swamir Dodik concluded that in other countries, where there will be elections, they have the courage to tell their voters.

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