The Plennary Session “Growth Recovery Plan for Europe”

“A truly free flow of services and joint tightening of the tax system will take Europe forward,” argues Deputy Prime Minister Mateusz Morawiecki.

“Dear Europe, please do not discriminate our companies, since it’s against the treaties,” appealed Polish Deputy Prime Minister, Minister for Development and Finance Mateusz Morawiecki during the afternoon plenary session: A plan for rebuilding growth in the European Union.

By claiming discrimination, Mateusz Morawiecki referred to various initiatives of the western countries restricting the flow of work and services which is one of the fundamental freedoms of the EU. In particular, he meant concepts of imposing higher wages for workers delegated abroad in the transport sector which are disadvantageous for Poland.

Morawiecki recalled that notwithstanding attempts, the service directive still cannot be effectively implemented in the EU, and the European Commision, rather than looking into this issue, is promoting the mechanisms of equal work in Europe. However, according to Mr Morawiecki, a truly common, competitive services market is exactly what can push Europe forward after being weakened by the crisis.

Arup Banerji, Regional Director for the EU, Europe and Central Asia, partially conceded to Mateusz Morawiecki. He reminded that, as it follows from the report of the European Central Bank, introducing a truly free flow of services and work in the entire EU at a level like, for instance, in Great Britain, Switzerland and Denmark, would boost productivity by 5 percent. “Is it feasible? A lot depends on the political will; however, the economic data speaks for itself,” he said. Meanwhile, the growth in productivity, which is still at one fifth of the American level, remains a key challenge for Europe.

In contrast, Vazil Hudak, Deputy Chairman of the European Investment Bank admitted that differences in wages were also a problem for the western countries, not only for the new EU members. According to him, support for post-communist countries in making up for their economic arrears may help in leveling the gap, while growth in innovativeness may boost the dynamics of growth throughout Europe.

Prime Minister Morawiecki also noted that fighting jointly against the so-called tax paradises, unauthorised tax optimisations, VAT mafias, etc. was as important as the common market.

“The European Commmission itself estimated that EU countries lose approx. EUR 200 billion on VAT frauds and another 200 billion on CIT frauds. If we had this sum of EUR 400 billion, we would have enough for everything,” he stressed. He additionally underlined that in accordance with the survey among 98 million companies worldwide, the largest tax paradises included, in particular, Great Britain, Switzerland, and the Netherlands.