Commission Report (2002): Poland

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 16: Small and medium -sized enterprises

Progress since the last Regular Report

Since the last Regular Report, Poland has continued to make further progress in the implementation of SME policy.

Poland has for a number of years had a well defined SME policy. The main development over the reporting period was the adoption by the Government of the medium-term economic strategy for 2002--2005 with programme ``Entrepreneurship First'' (see Chapter 15 ­ Industrial policy), which is first and foremost addressed to SMEs. The programme is expected to simplify and minimise the administrative burden on SMEs. Among other things, it provides for deferring income tax payments by new businesses; raising the upper limit of sales income qualifying for lump-sum payment of income tax; simplifying formalities required for registering a new company; requiring quarterly (instead of monthly) social security payments; and liberalising the labour code.

As has been noted in Regular Reports in the past, access to finance continues to be regarded as a significant constraint on SME development. As part of the ``anti-crisis package `` (see Chapter 15 -- Industrial Policy) the Government adopted the programme ``Capital for Enterprising Persons'' (2002--2006) in August 2002. It provides for the establishment of a national loan guarantee system through the BGK Bank (the state-owned bank, Bank Gospodarstawa Krajowego) and the network of local loan guarantee funds. Other measures are aimed at encouraging the banking sector to make the financial products of banks more accessible to SMEs.

In April 2002, Poland endorsed the European Charter for Small Enterprises as the basis for its action to support and develop small enterprises. The European Charter, adopted by the European Council in June 2000, is the reference document in the field of enterprise policy within the socio-economic strategy set up at the Lisbon European Council. The reporting process on the implementation of the European Charter in Poland started in May 2002.

With regard to the implementation of policy, the main change has been the merger of the Technology Agency, the Polish Agency for Regional Development and the Polish Agency for Enterprise Development. As a result, the Government has managed to streamline its activities in support of SMEs, which are under the supervision of the Ministry of Economy. A single government organisation, the Polish Agency for Enterprise Development, implements programmes and activities for SMEs financed both from the state budget and EU funds. A network of regional financing institutions has been established in each of the Polish regions, which will serve as the regional partners of the Agency. They provide information and advisory services for SMEs in the regions.

The budget resources allocated by the Government for SME support were reduced in 2002: about EUR 14 million was allocated in 2002 for the implementation of the ``Government policy guidelines for SMEs until 2002'', against EUR 18 million in 2001.

Aside from the measures set out above, there have been few significant changes in the broader business environment over the last year. Despite efforts to reduce delays, the tardy functioning of the judiciary system in the area of commercial courts remains an issue for small firms with limited resources. The complexity and frequent changes of the tax system are another frequently cited issue. As part of the anti-crisis programme mentioned above tax credits for very small companies in their first year of operation will be introduced, along with changes to the bankruptcy law intended to simplify and shorten bankruptcy procedures.

No further development has been recorded as regards SME definition, which is in line with the Commission Recommendation.

Overall assessment

The directions of the programme ``Entrepreneurship First'' are in line with the priorities of EU enterprise policy. The effort to tackle the improvement of the business environment as a whole rather than sticking to a few selective measures deserves recognition.

The institutional changes around the Polish Agency for Enterprise Development and the establishment of the network of Regional Financing Institutions should further improve and strengthen assistance to the SME sector. The Agency continues to co-ordinate the National SME Services System with over 150 SME support organisations of various forms all over the country. In addition, continuous efforts are needed by all the parties concerned at national (Ministry of Economy, Polish Agency for Enterprise Development) and regional levels (regional authorities, Regional Financing Institutions) to prepare for full use of EU structural funds in the area of enterprise development.

Efforts should be strengthened to prepare for the full use of the structural funds in the area of enterprise development.

Elsewhere, there are ambitious plans to improve the business environment, but their implementation and impact have yet to be seen. Some efforts have been undertaken to improve access to finance, information and advisory services, but in the past they were too limited in scope to have a broad impact and need to be reinforced.

The representation of the business community in Poland continues to be still very dispersed, with a large number of organisations representing different interest groups and operating on different levels and speaking with different voices. In particular, the interests of SMEs remain poorly represented. A more concentrated and better organised representation of the business community, and of SMEs in particular, would help their opinions and needs to be better heard and more readily taken into account by decision-makers both in Poland and in the European Union.

Conclusion

In its 1997 Opinion the Commission concluded that, while no particular problems were foreseen for Polish accession with respect to SME policy, and the basic structures were in place, there was a need for better and clearer co-ordination of efforts directed towards SMEs, measures aimed at simplifying legislation to make it more SME friendly, strengthening the support infrastructure, improvement of the tax environment, and development of SMEs' access to financing.

Since the Opinion, much has been done to define and implement an SME policy which is close to the acquis. Some progress has been achieved in improving the business environment for SMEs. Poland's policy towards SMEs is generally in line with the principles and objectives of EU enterprise policy.

Negotiations on this chapter have been provisionally closed. Poland has not requested any transitional arrangements in this area. Poland is generally meeting the commitments it has made in the accession negotiations in this field.

In order to complete preparations for membership, Poland's efforts now need to focus on consolidating the functioning of the new administrative structure and on ensuring that sufficient resources are allocated to the sector.

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