Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Poland
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Poland, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, public procurement, social policy, stability pact

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   EUROPEAN COMMISSION  Brussels, 19.6.2024  COM(2024) 621 final  Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Poland {SWD(2024) 100 final} - {SWD(2024) 621 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic, social, employment, structural and budgetary policies of Poland 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having regard to Regulation (EU) 2024/1263 of the European Parliament and of the Council 
of  29  April  2024  on  the  effective  coordination  of  economic  policies  and  on  multilateral 
budgetary surveillance and repealing Council Regulation (EC) No 1466/971, and in particular 
Article 3(3) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

(2) 

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Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council2,  which 
established  the  Recovery  and  Resilience  Facility,  entered  into  force  on  19  February 
2021. The Recovery and Resilience Facility provides financial support to the Member 
States  for  the  implementation  of  reforms  and  investment,  entailing  a  fiscal  impulse 
financed by the EU. In line with the European Semester priorities, it helps achieve the 
economic  and  social  recovery  and  implement  sustainable  reforms  and  investment,  in 
particular  to  promote  the  green  and  digital  transitions  and  make  the  Member  States’ 
economies  more  resilient.  It  also  helps  strengthen  public  finances  and  boost  growth 
and job creation in the medium and long term, improve territorial cohesion within the 
EU and support the continued implementation of the European Pillar of Social Rights.  
The  REPowerEU  Regulation3,  adopted  on  27  February  2023,  aims  to  phase  out  the 
EU’s  dependency  on  Russian  fossil  fuel  imports.  This  would  help  achieve  energy 
security  and  diversify  the  EU’s  energy  supply,  while  increasing  the  uptake  of 

the  Recovery  and  Resilience  Facility 

OJ L 2024/1263, 30.4.2024 ELI: http://data.europa.eu/eli/reg/2024/1263/oj. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
(OJ  L  57,  18.2.2021,  p.  17)  ELI: 
establishing 
http://data.europa.eu/eli/reg/2021/241/oj. 
Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council  of  27  February  2023 
amending Regulation (EU) 2021/241 as regards REPowerEU chapters  in recovery and resilience plans 
and  amending  Regulations  (EU)  No  1303/2013,  (EU)  2021/1060  and  (EU)  2021/1755,  and  Directive 
2003/87/EC (OJ L 63, 28.2.2023, p. 1) ELI: http://data.europa.eu/eli/reg/2023/435/oj. 

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(3) 

(4) 

(5) 

renewables,  energy  storage  capacities  and  energy  efficiency.  Poland  added  a  new 
REPowerEU chapter to its national recovery and resilience plan in order to finance key 
reforms and investments that will help achieve the REPowerEU objectives. 

On  16  March  2023,  the  Commission  issued  a  Communication  on  the  ‘Long-term 
competitiveness of the EU: looking beyond 2030’4, in order to inform policy decisions 
and  create  the  framework  conditions  for  increasing  growth.  The  Communication 
frames competitiveness along nine mutually reinforcing drivers. Among these drivers, 
access to private capital, research and innovation, education and skills, and the single 
market  emerge  as  paramount  policy  priorities  for  reform  and  investment  to  address 
current productivity challenges as well as to build up the long-term competitiveness of 
the EU and its Member States.  On 14 February  2024, the Commission  followed this 
Communication  with  the  Annual  Single  Market  and  Competitiveness  Report5.  The 
report  details  the  competitive  strengths  and  challenges  of  Europe's  Single  Market, 
tracking yearly developments according to the nine competitiveness drivers identified.   

On 21 November 2023, the Commission adopted the 2024 Annual Sustainable Growth 
Survey6, marking the start of the 2024 cycle of the European Semester for economic 
policy  coordination.  The  European  Council  endorsed  the  priorities  of  the  survey 
around  the  four  dimensions  of  competitive  sustainability  on  22  March  2024.  On  21 
November 2023, on the basis of Regulation (EU) No 1176/2011, the Commission also 
adopted the 2024 Alert Mechanism Report, in which it did not identify Poland as one 
of  the  Member  States  that  may  be  affected  or  may  be  at  risk  of  being  affected  by 
imbalances, and for which an in-depth review would be needed. The Commission also 
adopted a recommendation for a Council recommendation on  the economic policy of 
the euro area, which the Council adopted on 12 April 2024, as well as the proposal for 
the 2024 Joint Employment Report analysing the implementation of the Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  the 
Council adopted on 11 March 2024.  

On  30  April  2024,  the  EU’s  new  economic  governance  framework  came  into  force. 
The  framework  includes  the  new  Regulation  of  the  European  Parliament  and  of  the 
Council  (EU)  2024/1263  on  the  effective  coordination  of  economic  policies  and 
multilateral  budgetary  surveillance  and  repealing  Council  Regulation  (EC)  No 
1466/97.  It  also  includes  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure  and  the  amended  Directive 
2011/85/EU  on  the  budgetary  frameworks  of  Member  States7.  The  objectives  of  the 
new  framework  are  public  debt  sustainability  and  sustainable  and  inclusive  growth 
through gradual  fiscal consolidation  as  well as  reforms  and investments.  It  promotes 
national  ownership  and  has  a  greater  medium-term  focus,  combined  with  more 
effective and coherent enforcement. Each Member State should submit to the Council 
and  to  the  Commission  a  national  medium-term  fiscal-structural  plan.  National 
medium-term  fiscal-structural  plans  contain  the  fiscal,  reform  and  investment 
commitments  of  a  Member  State,  covering  a  planning  horizon  of  4  years  or  5  years 

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COM(2023) 168 final. 
COM(2024) 77 final. 
COM(2023) 901 final. 
Council  Regulation  (EU)  2024/1264  of  29  April  2024  amending  Regulation  (EC)  No  1467/97  on 
speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit  procedure  (OJ  L,  2024/1264, 
30.4.2024,  ELI:  http://data.europa.eu/eli/reg/2024/1264/oj)  and  Council  Directive  (EU)  2024/1265  of 
29  April  2024  amending  Directive  2011/85/EU  on  requirements  for  budgetary  frameworks  of  the 
Member States (OJ L, 2024/1265, 30.4.2024, ELI: http://data.europa.eu/eli/dir/2024/1265/oj). 

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depending on the regular length of the national legislature. The net expenditure8 path 
in  the  national  medium-term  fiscal-structural  plans  should  comply  with  the 
requirements of Regulation (EU) 2024/1263, including the requirements to put or keep 
general government debt on a plausibly downward path by the end of the adjustment 
period  at  the  latest,  or  for  it  to  remain  at  prudent  levels  below  60%  of  GDP,  and  to 
bring  and/or  maintain  the  government  deficit  below  the  3%  of  GDP  reference  value 
over  the  medium  term.  Where  a  Member  State  commits  to  a  relevant  set  of  reforms 
and investments in accordance with the criteria set out in Regulation (EU)  2024/1263, 
the  adjustment  period  may  be  extended  by  3  years  at  most.  For  the  purpose  of 
supporting the preparation of those plans, on [21 June] 2024, the Commission   is set 
to  provide  Member  States  with  guidance  on  the  content  of  the  plans  and  the 
subsequent  annual  progress  reports  that  they  will  need  to  submit  and,  in  accordance 
with Article 5 of Regulation (EU) 2024/1263, will transmit to them technical guidance 
on  the  fiscal  adjustments  (reference  trajectories  and  technical  information,  where 
applicable). Member States should submit their medium-term fiscal-structural plans by 
20 September 2024, unless the Member State and the Commission agree to extend the 
deadline by a reasonable period of time. Member States should ensure the involvement 
of their national parliaments, and the consultation of independent fiscal institutions, of 
social partners and other national stakeholders, as appropriate. 

In 2024, the European Semester for economic policy coordination continues to evolve 
in  line  with  the  implementation  of  the  Recovery  and  Resilience  Facility.  The  full 
implementation  of  the  recovery  and  resilience  plans  remains  essential  for  delivering 
the policy priorities under the European Semester, as the plans help effectively address 
all  or  a  significant  subset  of  challenges  identified  in  the  relevant  country-specific 
recommendations  issued  in  recent  years.  The  2019,  2020,  2022  and  2023  country-
specific  recommendations  remain  equally  relevant  also  for  recovery  and  resilience 
plans  revised,  updated,  or  amended  in  accordance  with  Articles  14,  18  and  21  of 
Regulation (EU) 2021/241.   

On  3  May  2021,  Poland  submitted  its  national  recovery  and  resilience  plan  to  the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to  Article  19  of  Regulation  (EU)  2021/241,  the  Commission  assessed  the  relevance, 
effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance with the assessment guidelines of Annex V to that Regulation. On 17 June 
2022,  the  Council  adopted  its  Decision  on  the  approval  of  the  assessment  of  the 
recovery  and  resilience  plan  for  Poland9,  which  was  amended  on  8  December  2023 
following Article 18(2) of Regulation (EU) 2021/241 on the update of the maximum 
financial  contribution  for  non-repayable  financial  support,  as  well  as  to  include  the 
REPowerEU chapter10. The release of instalments is conditional on a decision by the 
Commission,  taken  in  accordance  with  Article  24(5)  of  Regulation  (EU)  2021/241, 

(6) 

(7) 

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Net expenditure as defined in Article 2 of Council Regulation (EU) 2024/1263 of 29 April 2024 (OJ L 
2024/1263,  30.4.2024.  ELI:  http://data.europa.eu/eli/reg/2024/1263/oj).  Net  expenditure  means 
government  expenditure  net  of  (i)  interest  expenditure,  (ii)  discretionary  revenue  measures,  (iii) 
expenditure  on  programmes  of  the  Union  fully  matched  by  Union  funds  revenue,  (iv)  national 
expenditure  on  co-financing  of  programmes  funded  by  the  Union,  (v)  cyclical  elements  of 
unemployment benefit expenditure, and (vi) one-offs and other temporary measures. 
Council Implementing Decision of 17 June 2022 on the approval of the assessment of the recovery and 
resilience plan for Poland (9728/22). 
Council Implementing Decision of 8 December 2023 amending the  Implementing Decision of 17 June 
2022 on the approval of the assessment of the recovery and resilience plan for Poland (15835/23). 

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(8) 

(9) 

in 

the 

relevant 

addressing 

that Poland has satisfactorily fulfilled the relevant milestones and targets set out in the 
Council  Implementing  Decision.  Satisfactory  fulfillment  presupposes  that  the 
achievement of preceding milestones and targets has not been reversed. 
The Commission published the 2024 country report for Poland11 on 19 June 2024. It 
country-specific 
assessed  Poland’s  progress 
recommendations  adopted by the Council  between 2019  and  2023 and  took stock of 
Poland’s  implementation  of  the  recovery  and  resilience  plan.  Based  on  this  analysis, 
the  country  report  identified  gaps  with  respect  to  those  challenges  that  are  not 
addressed  or  only  partially  addressed  by  the  recovery  and  resilience  plan,  as  well  as 
new and emerging challenges. It also assessed Poland’s progress on implementing the 
European  Pillar  of  Social  Rights  and  on  achieving  the  EU  headline  targets  on 
employment, skills and poverty reduction, as well as progress in  achieving the UN’s 
Sustainable Development Goals.  
Based on data validated by Eurostat12, Poland’s general government deficit increased 
from 3.4% of GDP in 2022 to 5.1% in 2023, while the general government debt rose 
from 49.2% of GDP at the end of 2022 to 49.6% at the end of 2023. As announced in 
the  fiscal  policy  guidance  for  202413,  the  Commission  is  taking  the  first  step  for  the 
opening of deficit-based excessive deficit procedures on the basis of the outturn data 
for  2023,  in  line  with  existing  legal  provisions.  On  19  June  2024,  the  Commission 
adopted  a  report  under  Article  126(3)  of  the  TFEU14.  That  report  assessed  the 
budgetary situation of Poland, as its general government deficit in 2023 exceeded the 
reference  value  of  3%  of  GDP.  The  report  concluded  that  in  the  light  of  this 
assessment,  and  after  considering  the  opinion  of  the  Economic  and  Financial 
Committee  as  established  under  article  126(4)  TFEU,  the  Commission  intends  to 
propose  in  July  to  open  an  excessive  deficit  procedure,  by  recommending  to  the 
Council  to  adopt  a  Decision  under  Article  126(6)  establishing  the  existence  of  an 
excessive deficit, for Poland. 

(10)  On  12  July  2022,  the  Council  recommended15  that  Poland  take  action  to  ensure  in 
2023 that the growth of nationally financed primary current expenditure is in line with 
an  overall  neutral  policy  stance16,  taking  into  account  continued  temporary  and 
targeted support to households and firms most vulnerable to energy price hikes and to 
people fleeing Ukraine. At the same time, Poland was recommended to stand ready to 
adjust  current  spending  to  the  evolving  situation.  Poland  was  also  recommended  to 
expand public investment for the green and digital transitions, and for energy security 
taking  into  account  the  REPowerEU  initiative,  including  by  making  use  of  the 
Recovery  and  Resilience  Facility  and  other  Union  funds.  In  2023,  according  to 
Commission  estimates,  the  fiscal  stance17  was  expansionary,  by  0.8%  of  GDP,  in  a 

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SWD(2024) 621 final. 
Eurostat-Euro Indicators, 22.4.2024. 
COM(2023) 141 final. 
Report  from  the  Commission,  prepared  in  accordance  with  Article  126(3)  of  the  Treaty  on  the 
Functioning of the European Union, 19.6.2024, COM(2024) 598 final. 
Council Recommendation of 12 July 2022 on the National Reform Programme of Poland and delivering 
a Council opinion on the 2022 Convergence Programme of Poland, OJ C 334, 1.9.2022, p. 171. 
Based on the Commission spring 2024 forecast, the medium-term potential output growth of Poland in 
2023, which is used to measure the fiscal stance, is estimated at 14.5% in nominal terms, based on the 
10-year average real potential growth rate and the 2023 GDP deflator. 
The fiscal stance is defined as a measure of the annual change in the underlying budgetary position of 
the  general  government.  It  aims  to  assess  the  economic  impulse  stemming  from  fiscal  policies,  both 

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context  of  high  inflation.  The  growth  in  nationally  financed  primary  current 
expenditure  (net  of  discretionary  revenue  measures)  in  2023  provided  a  broadly 
neutral  contribution  to  the  fiscal  stance  of  0.0%  of  GDP,  which  is  in  line  with  the 
Council  recommendation.  The  broadly  neutral  contribution  of  nationally  financed 
primary  current  expenditure  was  due  to  the  reduced  costs  of  the  emergency  support 
measures  (targeted  and  untargeted)  to  households  and  firms  in  response  to  energy 
price  hikes  (by  1.2  percentage  points  of  GDP).  The  main  drivers  of  growth  in 
nationally  financed  primary  current  expenditure  (net  of  revenue  measures)  were 
increases in public sector wages and pensions. Expenditure financed by Recovery and 
Resilience  Facility  grants  and  other  EU  funds  amounted  to  1.5%  of  GDP  in  2023. 
Nationally  financed  investment  amounted  to  3.8%  of  GDP  in  2023,  with  an  annual 
increase  of  0.8  percentage  points  from  2022.  Poland  financed  additional  investment 
through  the  Recovery  and  Resilience  Facility  and  other  EU  funds,  and  it  preserved 
nationally  financed  investment.  Poland  financed  public  investment  for  the  green  and 
digital  transitions,  and  for  energy  security,  such  as  support  for  the  transmission  and 
distribution grids and deployment of renewables, for offshore wind energy plants and 
for energy-efficient  renovation of buildings and green and smart mobility, which are 
funded by the Recovery and Resilience Facility and other EU funds. 

(11)  The  Commission  Spring  2024  Forecast  projects  real  GDP  to  grow  by  2.8%  in  2024 
and 3.4% in 2025, and HICP inflation to stand at 4.3% in 2024 and 4.2% in 2025. 

(12)  The Commission Spring 2024 Forecast projects a government deficit of 5.4% of GDP 
in 2024, while the general government debt-to-GDP ratio is set to increase to 53.7% 
by the end of 2024. The increase of the deficit in 2024 mainly reflects high spending 
on defence, salary increases in the public sector and new social benefits. Based on the 
Commission’s estimates, the fiscal stance is projected to be expansionary by 2.4% of 
GDP in 2024. 

(13)  Expenditure  amounting  to  1.0%  of  GDP  will  be  financed  by  non-repayable  support 
(“grants”)  from  the  Recovery  and  Resilience  Facility  in  2024,  compared  to  0.1%  of 
GDP  in  2023,  according  to  the  Commission  Spring  2024  Forecast.  Expenditure 
financed  by  Recovery  and  Resilience  Facility  grants  will  enable  high-quality 
investment and productivity-enhancing reforms without a direct impact on the general 
government  balance  and  debt  of  Poland.  Expenditure  amounting  to  0.9%  of  GDP  is 
expected  to  be  backed  by  loans  from  the  Recovery  and  Resilience  Facility  in  2024, 
compared to 0% of GDP in 2023, according to the Commission Spring 2024 Forecast. 

(14)  On 14 July 2023, the Council recommended that Poland ensure a prudent fiscal policy, 
in  particular  by  limiting  the  nominal  increase  in  net  nationally  financed  primary 
expenditure18 in 2024 to not more than 7.8%. When executing their 2023 budgets and 
preparing their budgets for 2024, Member States were invited to take into account that 
the Commission would propose to the Council the opening of deficit-based excessive 

those  that  are  nationally  financed  and  those  that  are  financed  by  the  EU  budget.  The  fiscal  stance  is 
measured as the difference between (i) the medium-term potential growth and (ii) the change in primary 
expenditure  net  of  discretionary  revenue  measures  (and  excluding  temporary  emergency  measures 
related to the COVID-19 crisis) and including expenditure financed by non-repayable support (grants) 
from  the  Recovery  and  Resilience  Facility  and  other  Union  funds.  A  negative  (positive)  sign  of  the 
indicator indicates an expansionary (contractionary) fiscal policy. 
Net primary expenditure is defined as nationally financed expenditure net of  (i) discretionary revenue 
measures, (ii) interest expenditure, (iii) cyclical unemployment expenditure, and (iv) and one-offs and 
other temporary measures. 

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deficit procedures based on the outturn data for 2023.. According to the Commission 
Spring  2024  Forecast,  Poland’s  net  nationally  financed  primary  expenditure  is 
projected to increase by 12.8% in 2024, which is above the recommended maximum 
growth rate. This excess spending over the recommended maximum growth rate in net 
nationally  financed  primary  expenditure  corresponds  to  2.0%  of  GDP  in  2024.  This 
risks not being in line with what was recommended by the Council. 

(15)  Moreover,  the  Council  recommended  that  Poland  take  action  to  wind  down  the 
emergency energy support measures in  force, using the related savings to reduce the 
government  deficit,  as  soon  as  possible  in  2023  and  2024.  The  Council  further 
specified  that,  should  renewed  energy  price  increases  necessitate  new  or  continued 
support  measures,  Poland  should  ensure  that  these  were  targeted  at  protecting 
vulnerable  households  and  firms,  fiscally  affordable,  and  preserve  incentives  for 
energy savings. According to the Commission Spring 2024 Forecast, the net budgetary 
cost19 of emergency energy support measures is estimated at 0.6% of GDP in 2023 and 
projected at 0.5% in 2024, and less than 0.1% in 2025. In particular, the price freezing 
schemes for electricity and gas are assumed to remain in force until June 2024, while 
price ceilings are assumed to remain in force until the end of 2024 for electricity and 
gas and until June 2025 for district heating20. If the related savings were used to reduce 
the  government  deficit,  as  recommended  by  the  Council,  these  projections  would 
imply  a  fiscal  adjustment  of  0.2%  of  GDP  in  2024,  whereas  net  nationally  financed 
primary  expenditure21  provides  an  expansionary  contribution  to  the  fiscal  stance  of 
2.0% of GDP in that year. The emergency energy support measures are not projected 
to be wound down as soon as possible in 2023 and 2024. This risks not being in line 
with  what  was  recommended  by  the  Council.  Moreover,  the  related  savings  are  not 
projected to be used to reduce the government deficit. This also risks not being in line 
with  the  Council  recommendation.  The  budgetary  cost  of  emergency  energy  support 
measures  targeted  at  protecting  vulnerable  households  and  firms  is  estimated  at  less 
than  0.1%  of  GDP  in  2024  (0.2%  of  GDP  in  2023),  of  which  all  preserve  the  price 
signal to reduce energy demand and increase energy efficiency. 
In addition, the Council also recommended22 that Poland preserve nationally financed 
public  investment  and  ensure  the  effective  absorption  of  Recovery  and  Resilience 
Facility  grants  and  other  EU  funds,  in  particular  to  foster  the  green  and  digital 
transitions.  According  to  the  Commission  Spring  2024  Forecast,  nationally  financed 
public investment is projected to increase to 4.0% of GDP in 2024 from 3.8% of GDP 
in  2023.  This  is  in  line with  what  was  recommended  by  the  Council.  In  turn,  public 
expenditure  financed  from  revenues  from  EU  funds,  including  Recovery  and 
Resilience Facility grants, is expected to increase to 1.9% of GDP in 2024, from 1.5% 
of GDP in 2023. 

(16) 

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The figure represents the level of the annual budgetary cost of those measures, including revenue and 
expenditure and, where applicable, net of the revenue from taxes on windfall profits of energy suppliers. 
Measures that, according to Poland, remain in place until the end of 2024 are, in principle, assumed in 
the Commission 2024 spring forecast as having a budgetary impact also in 2025.  
This contribution is measured as the change in general government primary expenditure, net of  (i) the 
incremental  budgetary  impact  of  discretionary  revenue  measures,  (ii)  one-offs,  (iii)  cyclical 
unemployment  expenditure  and  (iv)  expenditure  financed by  non-repayable  support  (grants)  from  the 
Recovery  and  Resilience  Facility  and  other  EU  funds,  relative  to  the  medium-term  (10-year)  average 
potential nominal GDP growth rate, expressed as a ratio to nominal GDP. 
Council Recommendation on the 2023 National Reform Programme of Poland and delivering a Council 
opinion on the 2023 Convergence Programme of Poland, OJ C 312, 1.9.2023, p. 197. 

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(17)  Based on policy measures known at the cut-off date of the forecast and on a no-policy-
change  assumption,  the  Commission  Spring  2024  Forecast  projects  a  government 
deficit of 4.6% of GDP in 2025. The decrease of the deficit in 2025 mainly reflects a 
cyclical  upturn  and  the  expiration  of  energy  support  measures.  The  general 
government  debt-to-GDP ratio is  set to  increase to  57.7% by the end of 2025. Apart 
from  the  high  deficits,  the  increase  of  the  debt-to-GDP  ratio  is  driven  by  large  cash 
pre-payments for investments in military equipment.  

(18)  Social  benefits  are  still  largely  untargeted  and  without  means  testing  at  household 
level.  This  results  in  a  welfare  system  with  limited  redistributive  power.  In  2023, 
universal  child  benefits  were  significantly  increased,  and  the  13th  pension  was 
maintained.  In  budgetary  documents,  transparency  regarding  ongoing  and  planned 
investments  could  be  improved.  An  integrated  and  comprehensive  overview  of 
ongoing  investments  and  their  sources  of  financing,  including  extra-budgetary  funds 
and  state-owned  enterprises,  is  lacking.  While  available  to  varying  degrees,  such 
information 
investment 
is  scattered  across  documents,  such  as  multiannual 
programmes  and  financial  plans  of  state-owned  enterprises  or  of  extra-budgetary 
funds. Procedures for assessing and selecting public investment projects and carrying 
out ex post reviews are weak. Standardised project-assessment methodologies are only 
in  place  for  EU-financed  investments  but  could  be  applied  to  all  major  government-
-funded investments. Project selection procedures vary across ministries and are based 
on  the  type  of  project  and  source  of  financing.  There  are  no  standard  criteria  for 
project selection and prioritisation at central government level.   

(19)  Poland is one of the fastest ageing countries in the EU and the long-term demographic 
trends will impact its pension system. A continued increase in the effective retirement 
age  by  ensuring  high  labour  market  participation  of  older  workers  is  crucial  for 
economic  growth  and  the  adequacy  of  future  pensions.  The  2024  Ageing  Report 
projections for Poland imply the second-largest decline in adequacy, measured as the 
ratio of the average pension to the average gross wage at retirement. If the adequacy 
ratio were kept close to the current level, this would increase public expenditure by 4.6 
percentage points of GDP by 2070. Pension benefits for farmers are largely subsidised 
by  the  state,  amounting  to  0.6%  of  GDP  in  2023,  and  the  method  of  calculating 
collected  insurance  contributions  does  not  encourage  a  shift  towards  the  general 
pension  scheme,  which  hampers  intersectoral  labour  mobility.  While  Poland 
implemented  one  targeted  measure  in  its  recovery  and  resilience  plan  to  promote 
working  beyond  the  statutory  retirement  age,  further  efforts  would  be  needed  to 
address the challenge related to future pension adequacy and sustainability. 

(20) 

In accordance with Article 19(3), point (b), and Annex V, criterion 2.2 of Regulation 
(EU) 2021/241, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments to be implemented by 2026. These are expected 
to  help  effectively  address  all  or  a  significant  subset  of  challenges  identified  in  the 
relevant  country-specific  recommendations.  Within  this  tight  timeframe,  proceeding 
swiftly  with  the  effective  implementation  of  the  plan,  including  the  REPowerEU 
chapter,  is  essential  to  boost  Poland’s  long-term  competitiveness  through  the  green 
and digital transition, while ensuring social fairness. To deliver on the commitments of 
the plan by August 2026, it is essential for Poland to continue the implementation of 
reforms  and to  accelerate investments  by addressing emerging  delays while ensuring 
strong  administrative  capacity.  The  systematic  involvement  of  local  and  regional 
authorities,  social  partners,  civil  society,  and  other  relevant  stakeholders  remains 

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essential to ensure broad ownership for the successful implementation of the recovery 
and resilience plan. 

(21)  As  part  of  the  mid-term  review  of  the  cohesion  policy  funds,  in  accordance  with 
Article  18  of  Regulation  (EU)  2021/1060,  Poland  is  required  to  review  each 
programme  by  March  2025,  taking  into  account,  among  other  things,  the  challenges 
identified in the 2024 country-specific recommendations, as well as its national energy 
and climate plan. This  review  forms  the basis for the definitive allocation of the EU 
funding  included  in  each  programme.  Poland  has  made  progress  in  implementing 
cohesion  policy and the  European Pillar of Social  Rights,  but  challenges  remain and 
regional  disparities  between  eastern  regions  and  the  rest  of  the  country  have 
continuously widened. It is crucial to accelerate the implementation of cohesion policy 
programmes. The priorities agreed in the programmes remain relevant. It is important 
for  Poland  to  invest  in  innovative  and  smart  economic  transformation  and  to 
strengthen cooperation between science and business. Speeding up the green transition 
and the shift  from  coal requires  action including  expanding clean energy production, 
increasing  investments  in  net-zero  technologies  manufacturing,  reducing  energy 
consumption, and reducing air pollution. It is important to invest in digital and green 
skills. It is still a priority to close territorial gaps in the access to quality and affordable 
childcare. When carrying out the mid-term review of cohesion policy programmes, it 
is  worth  paying  further  attention  to  investments  in  the  support  system  for  non-EU 
nationals and opportunities supporting their integration in a comprehensive manner, as 
Poland  has  experienced  an  unprecedented  inflow  of  refugees  from  Ukraine.  Poland 
could make use of the Strategic Technologies for Europe Platform initiative to support 
the transformation of its economy, especially in terms of clean and resource-efficient 
technologies.  

(22)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan and other EU funds, Poland faces several additional challenges related to labour 
shortages,  digitisation  of  businesses,  public  procurement,  district  heating,  and  water 
management. 

(23)  Labour shortages undermine the competitiveness of Poland’s economy. In 2023, 66% 
of  Polish  employers  reported  difficulty  filling  open  positions,  while  75%  reported 
difficulty  finding  the  talent  they  needed.  This  is  why  it  is  critical  to  increase  labour 
market participation among groups with the lowest employment rates, such as people 
with  a  disability  (the  disability  employment  gap  stood  at  31.3  percentage  points  in 
2022, much above the EU average of 21.4 percentage points) or women (in 2023, the 
employment  gap  between  men  and  women  in  Poland  was  11.8  percentage  points  on 
average  and  23.3 percentage points  for people  aged 55-64). Poland falls short of the 
EU 2030 target of 51.7% participation in adult learning, currently at 20.3%, impeding 
the transition into labour-demanding sectors through reskilling and upskilling. At the 
same  time,  the  long-term  care  system  is  underdeveloped  and  continues  to  rely  on 
families,  in  particular  on  women,  and  on  other  informal  carers.  Formal  home  care 
coverage is low at 13% of those aged 65 and over in need of such care, well below the 
EU  average  (30%  in  2022),  while  the  needs  are  growing  fast  with  the  ageing 
population. The share of the population aged 65 and over is expected to reach 21.9% 
in 2030 and 29.1% in 2050. Fostering higher economic activity of informal caregivers, 
mostly  women,  by  improving  access  to  formal  home-based  and  community--based 
long-term care can increase labour market participation.  

(24)  The  public  procurement  system  still  suffers  from  the  low  number  of  companies 
submitting tenders. This results in a high share of single offers, which has remained at 

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an  exceptionally  high  level  for  years  (54%  in  2023  and  above  50%  over  the  last 
5 years).  Despite  expectations,  the  public  procurement  law  that  entered  into  force  in 
January 2021 did not immediately address the key weaknesses. This calls for a robust 
and comprehensive root-cause analysis of the persistent and deteriorating problem of 
low  competition  in  public  procurement.  Further  strengthening  the  digitisation  of  the 
public  procurement  process  and  developing  the  training  offer  for  small  to  medium-
sized enterprises (SMEs) can help address these challenges.  

(25)  Poland has scope to improve its performance in the digital transition and to increase its 
contribution  to  achieving  the  EU’s  Digital  Decade  targets.  While  there  has  been 
progress  in  digitalising  public  services,  Poland  is  lagging  behind  in  the  area  of 
digitalisation  of  business.  The  share  of  Polish  SMEs  having  at  least  a  basic  level  of 
digital intensity stands at 61%, which is below the EU average of 69% (with the EU’s 
2030  target  being  90%).  Only  18%  of  companies  provide  dedicated  ICT  training  to 
their employees, who, as a result, have low levels of digital skills. To strengthen the 
growth  potential  of  its  economy  and  stimulate  private  investments,  Poland  should 
facilitate  access  to  advanced  technologies,  especially  for  SMEs,  and  incentivise 
start-up ecosystems by improving access to training, providing technical and financial 
support and encouraging knowledge transfer.  

(26) 

In the past decade, Poland’s final energy consumption has been on an increasing trend. 
In 2022, it was 14.5% higher than in 2013, while in the EU as a whole, it decreased by 
5.5%. Should  the trajectory of the past  6 years continue, Poland would overshoot its 
energy efficiency target by 28%. In particular, district heating systems provide heat to 
42%  of  the  population  but  are  still  heavily  dependent  on  coal,  while  a  clear 
decarbonisation pathway with a strong energy efficiency angle is yet to be proposed. 
While current policies  envisage a shift to natural gas and biomass, a decarbonisation 
pathway needs to be outlined that prioritises energy efficiency, sustainable renewable 
heat  sources  and  the  use  of  waste  heat.  Poland  has  implemented  a  set  of  national 
policies to promote residential building renovations, including major subsidy schemes 
financed  under  the  recovery  and  resilience  plan.  However,  these  policies  need  to  be 
further  strengthened  and  aligned  with  the  EU’s  2030  climate  objectives.  Therefore, 
targeted action is needed to reduce carbon emissions from buildings, with a particular 
focus on energy efficiency improvements and decarbonising district heating. 

(27)  Poland faces challenges related to climate change adaptation, for instance concerning 
risks of drought and flooding. The recovery and resilience plan includes measures to 
improve  water  retention  in  rural  areas,  but  other  national  policies  in  agriculture, 
forestry and water management are still not fitted to address climate risks and impacts. 
Better  policy  coherence  could  be  achieved  through  closer  coordination  between  the 
different  institutions  in  charge  of  relevant  policies.  This  could  help  implement 
sustainable  solutions  such  as  nature-based  adaptation  solutions  to  increase  water 
supplies  and  adapt  to climate change while  benefiting  the long-term  sustainability  of 
agriculture and other sectors that rely on ecosystem services.  

HEREBY RECOMMENDS that Poland take action in 2024 and 2025 to:  

1. 

23 

Submit  the  medium-term  fiscal-structural  plan  in  a  timely  manner.  In  line  with  the 
requirements  of  the  reformed  Stability  and  Growth  Pact,  limit  the  growth  in  net 
expenditure23  in  2025  to  a  rate  consistent  with  reducing  the  general  government 

According  to  Article  2(2)  of  Regulation  (EU)  2024/1263,  ‘net  expenditure’  means  government 
expenditure net of interest expenditure, discretionary revenue measures, expenditure on programmes of 

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deficit  towards  the  3%  of  GDP  Treaty  reference  value  and  keeping  the  general 
government debt at a prudent level over the medium term. Improve the efficiency of 
public spending, including through better targeting of social benefits as well as more 
transparency  in  investment  planning  and  wider  use  of  standardised  procedures  for 
project assessment and selection. Ensure the adequacy of future pension benefits and 
the  sustainability  of  the  pension  system,  including  by  taking  measures  on  effective 
retirement age and reforming preferential pension schemes.  

Strengthen  administrative  capacity  to  manage  the  recovery  and  resilience  plan, 
accelerate  investments  and  maintain  momentum  in  the  implementation  of  reforms. 
Address emerging delays to allow for continued, swift and effective implementation 
of  the  recovery  and  resilience  plan,  including  the  REPowerEU  chapter,  ensuring 
the 
completion  of  reforms  and 
implementation  of  cohesion  policy  programmes.  In  the  context  of  the  mid-term 
review continue focusing on the agreed priorities, taking action to better support and 
integrate  non-EU  nationals,  while  considering  the  opportunities  provided  by  the 
Strategic Technologies for Europe Platform initiative to improve competitiveness. 

investments  by  August  2026.  Accelerate 

Take steps to increase labour market participation of disadvantaged groups, including 
by improving quality of and access to formal home- and community-based long-term 
care.  Foster  competition  in  public  procurement  processes,  making  these  more 
efficient and less cumbersome, especially for SMEs. Support private investments by 
fostering digitisation of companies.   

Take measures to accelerate the phase-out of fossil fuels in the district heating sector 
by  shifting  to  renewable  energy.  Improve  policies  related  to  the  protection  and 
sustainable  use  of  water  resources  to  ensure  the  long-term  sustainability  of  sectors 
that rely on ecosystem services.  

2. 

3. 

4. 

Done at Brussels, 

For the Council 
The President 

the  Union  fully  matched  by  revenue  from  Union  funds,  national  expenditure  on  co-financing  of 
programmes funded by the Union, cyclical elements of unemployment benefit expenditure, and one-offs 
and other temporary measures. 

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