Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to Poland to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak
Date: 2020-08-24
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU loan, Poland, emergency aid, employment aid, epidemic, fight against unemployment, infectious disease, public expenditure, self-employed person

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   EUROPEAN COMMISSION  Brussels, 24.8.2020  COM(2020) 455 final 2020/0214 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to Poland to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Council  Regulation  2020/672  (“SURE  Regulation”)  lays  down  the  legal  framework  for 
providing  Union  financial  assistance  to  Member  States,  which  are  experiencing,  or  are 
seriously threatened with, a severe economic disturbance caused by the COVID-19 outbreak. 
Support  under  SURE  serves  for  the  financing,  primarily,  of  short-time  work  schemes  or 
similar measures aimed at protecting employees and the self‐ employed and thus reducing the 
incidence of unemployment and loss of income, as well as for the financing, as an ancillary, 
of some health-related measures, in particular in the workplace. 

On 6 August 2020, Poland requested Union financial assistance under the SURE Regulation. 
In accordance with Article 6(2) of the SURE Regulation, the Commission has consulted the 
Polish authorities to verify the sudden and severe increase in actual and planned expenditure 
directly  related  to  short-time  work  schemes  and  similar  measures  caused  by  the  COVID-19 
pandemic. In particular, it concerns: 

(1) 

(2) 

(3) 

(4) 

(5) 

a  temporary  reduction  in  social  security  contributions  for  the  self-employed  and 
companies  employing  up  to  50  people  to  protect  workplaces  in  response  to  the 
COVID-19 outbreak. The reduction applied for the period between March and May 
2020. Those employing up to 10 people and – in most cases – self-employed persons, 
could benefit from a full reduction, while for the entities employing between 10 and 
50 people, the reduction amounted to 50%.  

a  downtime  benefit  for  self-employed  persons  and  those  working  under  civil  law 
contracts who have experienced a reduction in revenue due to the crisis. The measure 
consists  of  a  lump  sum  benefit  for  self-employed  persons  (50%  or  80%  of  the 
minimum  wage  –  depending  on  the  decrease  in  revenue)  and  those  working  under 
non-standard labour contracts (up to 80% of the minimum wage) to compensate them 
for a drop in revenue.  

subsidies towards salaries and social security contributions conditional on a decrease 
in  turnover  due  to  the  crisis.  Independently  of  their  size,  undertakings  can  ask  for 
temporary co-financing of their costs for salaries and social security contributions.  

subsidies  to  self-employed  persons  without  employees.  The  subsidies  provide 
temporary  co-financing  of  a  part  of  the  costs  of  running  a  business  incurred  by 
natural persons without employees. The amount depends on the decrease in turnover 
and amounts to between 50% and 90% of the minimum salary.  

a  measure  that  provides  loans  that  are  convertible  into  grants  to  self-employed 
persons, micro-companies and non-government organisations. The measure provides 
micro-loans  of  up  to  PLN  5  000.  The  loans  may  be  converted  into  grants  if  the 
beneficiary  continues  operations  for  three  months  after  the  loan  is  paid.  Poland 
provided the Commission with the relevant information.  

Taking into account the available evidence, the Commission proposes to the Council to adopt 
an Implementing Decision to grant financial assistance to Poland under the SURE Regulation 
in support of the above measures. 

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• 

Consistency with existing policy provisions in the policy area 

The present proposal is fully consistent with Council Regulation 2020/672, under which the 
proposal is made. 

The present proposal comes in addition to another Union law instrument to provide support to 
Member States in case of emergencies, namely Council Regulation (EC) No 2012/2002 of 11 
November 2002 establishing the European Union Solidarity Fund (EUSF) (“Regulation (EC) 
No 2012/2002”). Regulation (EU) 2020/461 of the European Parliament and of the Council, 
which amends that instrument to  extend its scope to  cover major public  health emergencies 
and to define specific operations eligible for financing, was adopted on 30 March.   

• 

Consistency with other Union policies 

The proposal is part of a range of measures developed in response to the current COVID-19 
pandemic  such  as  the  “Coronavirus  Response  Investment  Initiative”,  and  it  complements 
other  instruments  that  support  employment  such  as  the  European  Social  Fund  and  the 
European Fund for Strategic Investments (EFSI)/InvestEU. By making use of borrowing and 
lending in this particular case of the COVID-19 outbreak for supporting Member States, this 
proposal  acts  as  a  second  line  of  defence  to  finance  short-time  work  schemes  and  similar 
measures,  helping  protect  jobs  and  thus  employees  and  self-employed  against  the  risk  of 
unemployment.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The legal basis for this instrument is Council Regulation 2020/672.   

• 

Subsidiarity (for non-exclusive competence)  

The  proposal  follows  a  Member  State  request  and  shows  European  solidarity  by  providing 
Union financial assistance in the form of temporary loans to a Member State affected by the 
COVID-19  outbreak.  As  a  second  line  of  defence,  such  financial  assistance  supports  the 
government’s increased public expenditure on a temporary basis in respect of short-time work 
schemes  and  similar  measures  to  help  them  protect  jobs  and  thus  employees  and  self-
employed against the risk of unemployment and loss of income. 

Such  support  will  help  the  population  affected  and  helps  to  mitigate  the  direct  societal  and 
economic impact caused by the present COVID-19 crisis.  

• 

Proportionality 

The proposal respects the proportionality principle. It does not go beyond what is necessary to 
achieve the objectives sought by the instrument.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the 
Council, a stakeholder consultation could not be carried out. 

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• 

Impact assessment 

Due to the urgent nature of the proposal, no impact assessment was carried out. 

4. 

BUDGETARY IMPLICATIONS 

The  Commission  should  be  able  to  contract  borrowings  on  the  financial  markets  with  the 
purpose  of  on-lending  them  to  the  Member  State  requesting  financial  assistance  under  the 
SURE instrument.  

In  addition  to  the  provision  of  Member  State  guarantees,  other  safeguards  are  built  into  the 
framework in order to ensure the financial solidity of the scheme: 

 

 

A rigorous and conservative approach to financial management; 

A  construction  of  the  portfolio  of  loans  that  limits  concentration  risk,  annual 
exposure and excessive exposure to individual Member States whilst ensuring 
sufficient resources could be granted to Member States most in need; and 

 

Possibilities to roll over debt. 

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2020/0214 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

granting temporary support under Council Regulation (EU) 2020/672 to Poland to 
mitigate unemployment risks in an emergency situation following the COVID-19 
outbreak 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union,  

Having regard to Council Regulation (EU) 2020/672 of 19 May 2020 on the establishment of 
a  European  instrument  for  temporary  support  to  mitigate  unemployment  risks  in  an 
emergency (SURE) following the COVID-19 outbreak1, and in particular Article 6(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

On 6 August 2020, Poland requested financial assistance from the Union with a view 
to complementing its national efforts to address the impact of the COVID-19 outbreak 
and its socio-economic consequences for workers.  

The  COVID-19  outbreak  and  the  extraordinary  measures  implemented  by  Poland  to 
contain the outbreak and its socio-economic and health-related impact are expected to 
have  a  dramatic  impact  on  public  finances.  According  to  the  Commission’s  2020 
Spring forecast, Poland was expected to have a general government deficit and debt of 
9.5%  and  58.5%  of  gross  domestic  product  (GDP)  respectively  by  the  end  of  2020. 
According  to  the  Commission’s  2020  Summer  interim  forecast,  Poland’s  GDP  is 
projected to decrease by 4.6% in 2020.  

The  COVID-19  outbreak  has  immobilised  a  substantial  part  of  the  labour  force  in 
Poland. This has led to a sudden and severe increase in public expenditure by Poland 
in  respect  of  a  reduction  in  social  security  contributions  for  the  self-employed  and 
companies employing up to 50 people, a downtime benefit for the self-employed and 
those  working  on  civil  law  contracts,  subsidies  towards  salaries  and  social  security 
contributions, subsidies to the self-employed without employees and loans convertible 
into  subsidies  granted  to  the  self-employed,  micro-companies  and  non-government 
organisations, as set out in recitals 4 to 8.  

(4)  More  specifically,  “the  Act  of  2  March  2020  on  specific  solutions  related  to  the 
prevention, counteraction and eradication of COVID-19, other infectious diseases and 
crisis situations caused by them”2, as it is referred to in Poland’s request of 6 August 
2020,  introduced  a  temporary  reduction  in  social  security  contributions  for  the  self-
employed and companies employing up to 50 people to protect workplaces in response 
to the COVID-19 outbreak. The reduction applied for the period between March and 
May  2020.  Those  employing  up  to  10  people  and  –  in  most  cases  –  self-employed 

1  OJ L 159, 20.5.2020, p.1. 
2  Dz.U. 2020 poz. 374, as amended 

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persons, could benefit from a full reduction, while for the entities employing between 
10 and 50 people, the reduction amounted to 50%. The temporary reduction in social 
security  contributions  can  be  considered  a  similar  measure  to  short-time  work 
schemes, as referred to in Regulation (EU) 2020/672, as, for the self-employed, it aims 
at protecting the self-employed from a reduction or loss of income and, for companies 
employing up to 50 people, it supports those employed in the companies that remain 
employed  until  the  end  of  the  measure.  The  temporary  reduction  in  social  security 
contributions consists in foregone revenues for the government, which for the purpose 
of the implementation  of Council Regulation  2020/672  can be considered equivalent 
to public expenditure. 

Furthermore,  the  authorities  have  introduced  a  downtime  benefit  for  self-employed 
persons and those working under civil law contracts who have experienced a reduction 
in  revenue  due  to  the  crisis.  The  measure  consists  of  a  lump  sum  benefit  for  self-
employed persons (50% or 80% of the minimum wage – depending on the decrease in 
revenue)  and  those  working  under  non-standard  labour  contracts  (up  to  80%  of  the 
minimum wage) to compensate them for a drop in revenue.  

Subsidies  towards  salaries  and  social  security  contributions  have  been  introduced, 
conditional  on  a  decrease  in  turnover  due  to  the  crisis.  Independently  of  their  size, 
undertakings can ask for temporary co-financing of their costs for salaries and social 
security contributions. The subsidies towards salaries and social security contributions 
can  be  considered  a  similar  measure  to  short-time  work  schemes,  as  referred  to  in 
Regulation  (EU)  2020/672,  as  concerns  expenditure  incurred  by  companies  that  use 
short-time  work,  voluntarily  reduce  working  time  or  when  the  employees  were 
continuously in employment up to the latest available outturn data, as, it requires that 
companies maintain employment, either during the period of reduced working time or 
up until the latest available outturn data.  

Subsidies  to  self-employed  persons  without  employees  have  been  introduced  by  the 
authorities.  The  subsidies  provide  temporary  co-financing  of  a  part  of  the  costs  of 
running  a  business  incurred  by  natural  persons  without  employees.  The  amount 
depends  on  the  decrease  in  turnover  and  amounts  to  between  50%  and  90%  of  the 
minimum salary.  

Finally,  the  authorities  have  introduced  a  measure  that  provides  loans  that  are 
convertible  into  grants  to  self-employed  persons,  micro-companies  and  non-
government organisations. The measure provides micro-loans of up to PLN 5 000. The 
loans  may  be  converted  into  grants  if  the  beneficiary  continues  operations  for  three 
months  after  the  loan  is  paid.  In  order  to  meet  the  requirement  of  being  public 
expenditure, only expenditure relating to loans being converted into grants should be 
supported under Regulation (EU) 2020/672.  

Poland fulfils the conditions for requesting financial assistance set out in Article 3 of 
Regulation  (EU)  2020/672.  Poland  has  provided  the  Commission  with  appropriate 
evidence that the actual and planned public expenditure has increased by EUR 11 668 
118 894 as of 1 February 2020 due to the national measures taken to address the socio-
economic  effects  of  the  COVID-19  outbreak.  This  constitutes  a  sudden  and  severe 
increase  because  it  relates  to  both  new  measures  and  an  extension  of  existing 
measures, which cover a significant proportion of undertakings and of the labour force 
in Poland.  

(5) 

(6) 

(7) 

(8) 

(9) 

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(10)  The Commission has consulted Poland and verified the sudden and severe increase in 
the actual and planned public expenditure directly related to short-time work schemes 
and similar measures, in accordance with Article 6 of Regulation (EU) 2020/672.  

(11)  Financial  assistance  should  therefore  be  provided  with  a  view  to  helping  Poland  to 
address the socio-economic effects of the severe economic disturbance caused by the 
COVID-19 outbreak. 

(12)  This decision should be without prejudice to the outcome of any procedures relating to 
distortions of the operation of the internal market that may be undertaken, in particular 
under Articles 107  and  108 TFEU.  It  does not  override the  requirement  for Member 
States to notify instances of potential State aid to the Commission under Article 108 
TFEU. 

(13)  Poland should inform the Commission on a regular basis of the implementation of the 
planned public expenditure, in order to enable the Commission to assess the extent to 
which Poland has implemented that expenditure. 

(14)  The  decision  to  provide  financial  assistance  has  been  taken  taking  into  account 
existing  and  expected  needs  of  Poland,  as  well  as  requests  for  financial  assistance 
pursuant  to  Regulation  (EU)  2020/672  already  submitted  or  planned  to be  submitted 
by other Member States, while applying the principles of equal  treatment,  solidarity, 
proportionality  and  transparency.  In  particular,  the  amount  of  the  loan  has  been 
established to  ensure compliance with  the prudential  rules  applicable to the portfolio 
of loans as specified in Council Regulation (EU) 2020/672, 

HAS ADOPTED THIS DECISION:  

Article 1 

Poland fulfils the conditions set out in Article 3 of Regulation (EU) 2020/672.   

1. 

2. 

3. 

4. 

5. 

6. 

Article 2 

The Union shall make available to Poland a loan amounting to a maximum of EUR 
11 236 693 087. The loan shall have a maximum average maturity of 15 years. 

The availability period for financial assistance  granted by this Decision shall be 18 
months starting from the first day after the entry into force of this Decision.  

The Union financial assistance shall be made available by the Commission to Poland 
in a maximum of ten instalments. An instalment may be disbursed in one or several 
tranches. The maturities of the tranches under the first instalment may be longer than 
the  maximum  average  maturity  referred  to  in  paragraph  1.  In  such  cases,  the 
maturities  of  further  tranches  shall  be  set  so  that  the  maximum  average  maturity 
referred to in paragraph 1 is respected once all instalments have been disbursed.  

The  first  instalment  shall  be  released  subject  to  the  entry  into  force  of  the  loan 
agreement provided for in Article 8(2) of Regulation (EU) 2020/672.  

Poland  shall  pay  the  cost  of  funding  of  the  Union  referred  to  in  Article  4  of 
Regulation (EU) 2020/672 for each instalment plus any fees, costs and expenses of 
the Union resulting from any funding.  

The Commission shall decide on the size and release of instalments, as well as on the 
size of the tranches.  

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Poland may finance the following measures: 

Article 3  

a reduction in social security contributions, as provided for by Art. 31zo of the Act of 2 March 
2020 on specific solutions related to the prevention, counteraction and eradication of 
COVID-19,  other  infectious  diseases  and  crisis  situations  caused  by  them,  for  the 
part  of  expenditure  related  to  the  support  of  self-employed  persons  and,  for 
companies  employing  up  to  50  people,  the  part  of  expenditure  in  respect  of 
employees who were continuously in employment; 

a downtime benefit for self-employed persons and those working under civil law contracts, as 
provided for by Art. 15zq and 15zua of the Act of 2 March 2020 on specific solutions 
related  to  the  prevention,  counteraction  and  eradication  of  COVID-19,  other 
infectious diseases and crisis situations caused by them; 

subsidies towards salaries and social security contributions of companies that use short-time 
work or voluntarily reduce working time or when the employees were continuously 
in employment, as provided for by Art. 15g, 15ga, 15gg, 15zzb, 15zze, 15zze2 of the 
Act  of  2  March  2020  on  specific  solutions  related  to  the  prevention,  counteraction 
and eradication of COVID-19, other infectious diseases and crisis situations caused 
by them; 

subsidies  to  self-employed  persons  without  employees  as  provided  for  by  Art.  15zzc  of  the 
Act  of  2  March  2020  on  specific  solutions  related  to  the  prevention,  counteraction 
and eradication of COVID-19, other infectious diseases and crisis situations caused 
by them;  

loans convertible into subsidies granted to self-employed persons, micro-companies and non-
government organisations, for the amount actually converted into grants, as provided 
for by Art. 15zzd, 15zzda of the Act of 2 March 2020 on specific solutions related to 
the prevention, counteraction and eradication of COVID-19, other infectious diseases 
and crisis situations caused by them.  

Poland  shall  inform  the  Commission  by  [DATE:  6  months  after  date  of  publication  of  this 
Decision],  and  every  6  months  thereafter  of  the  implementation  of  the  planned  public 
expenditure until such time as that planned public expenditure has been fully implemented. 

Article 4 

This Decision is addressed to the Republic of Poland. 

Article 5 

This Decision shall be published in the Official Journal of the European Union.  

Done at Brussels, 

Article 6 

For the Council 
The President 

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