Facing the COVID-19 Crisis in Poland

April 4, 2020

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The Polish government has prioritised protecting the profits of the financial sector and large companies and placing the burden of the crisis on working people.

Gavin Rae writes: The numbers of those infected or killed by the COVID-19 virus in Poland have remained low in comparison to many western European countries. This is because the virus spread relatively late to Poland and social distancing was then introduced comparatively early. The Law and Justice (PiS) government is particularly concerned to prevent these numbers escalating, as the country’s under-resourced health system would likely not be able to cope with the levels of infection seen in countries like Spain or Italy. However, the possibility of maintaining social distancing, for the time required to suppress the virus, will be severely hampered by the lack of a sufficient package of economic investment and social spending to support those losing their jobs and incomes.

Social distancing measures

According to the official statistics, by April 1, there had been 2,347 people infected with COVID-19 and 35 confirmed deaths in Poland. The first official case of COVID-19 was announced on March 4 and the first death on March 12. By the end of March almost 270,000 people were in quarantine, whilst around 42,000 tests had been carried out. However, the exact numbers of infected cases and deaths is unclear due to the low level of testing and regulations concerning who is counted as having died from the virus. It is almost certain that the actual figures are considerably higher.

The first measures to enforce a lockdown were introduced between March 10-12, through closing schools and universities; cancelling mass gatherings; shutting bars, restaurants and cafes; cancelling flights and closing the country’s borders. Although Polish society has generally complied with these regulations in an impressively disciplined manner, these have not been sufficient to contain the spread of the virus and they have since been tightened twice. On March 25, non-family gatherings of more than two people, religious gatherings of more than six people and non-essential travel were banned. Subsequently, on March 30, the government announced new measures, which included those under 18 years of age not being allowed out without an adult; the closing of public recreation areas; limiting the amount of people allowed in shops and ruling that pedestrians (including from the same family) have to remain 2 metres apart. Those not complying with these regulations are liable to be fined up to 30,000 złoty (€6,600).

Despite these very strong controls, there are some areas of social life that have not been locked down. Firstly, some non-essential workplaces and factories continue to operate, with workers cramped together in unsafe conditions. The most high-profile case has been in Amazon warehouses in western Poland (from which packages are not even distributed inside Poland) where the company continues to make a profit at the expense of the health of its employees and families. Also, the government has not yet cancelled the end of year high-school exams in May, nor the presidential elections scheduled for May 10 (see below). These pose a direct health risk to society and undermine social acceptance for the severe restrictions that people face in their everyday lives.

A struggling health system

The threat of COVID-19 in Poland (as in most other Central and Eastern European countries) is exacerbated by the poor state of its health service, which has suffered decades of underinvestment. Health spending only amounts to 6.5 percent of GDP (the EU average is over 9 percent) with only slightly over 70 percent of this being public expenditure. A mere 751 euros per person is spent on health annually in Poland, compared to an EU average of 2,905 euros. Years of privatisation and liberalisation have downgraded the universal health system, inherited from the period of ‘real-socialism’. The mass emigration of medical staff abroad (partly due to the very low salaries in Poland) has left the country with the lowest number of nurses per 1000 people inside the OECD, with the average age of a nurse standing at over 50 years. Also, medical staff are exempt from the labour code allowing them to work in a number of different surgeries and hospitals. This means that nurses and doctors are often overworked and there is a threat in the current crisis they they can spread the virus between the places they are employed.

The dramatic situation within the health system has been compounded by the lack of equipment and materials needed to fight the COVID-19 virus. The lack of available tests and masks make it both difficult to track and contain the spread of the virus and the absence of sufficient protective clothing for medical staff puts their (and others) health and lives at risk. According to the Ministry of Health, the number of tests carried out in Poland had grown to 55,801 by April 1, which remains considerably lower than in most other European countries. Poland has been unprepared for this crisis, with the authorities not participating in a European Union tender procedure to purchase related medical equipment at the end of February. This void has been partially filled by deliveries of medical equipment from China, which has included 10,000 test kits, 20,000 N95 respirators, 5,000 protective suits, 5,000 medical goggles and other protective materials.

The economic and social crisis

The lockdown in Poland is already having a severe negative impact on the Polish economy. The country’s PMI manufacturing index recorded an historic drop in March; investment is expected to fall by around 15 percent; and GDP is predicted to shrink by at least 4.5 percent in 2020. Although there are no hard figures available yet, it is possible that around 2 million workers could lose their jobs and unemployment is likely to rise into double figures. The situation on the labour market is made considerably worse due to the very high percentage of Polish workers who are employed on precariat labour contracts, which has grown substantially since the early 2000s. Poland currently has the highest number of workers employed on temporary contracts (27 percent) inside the EU and there are around a further 3 million people classified as being self-employed. There is very little protection available for employees threatened with being laid off or having their salaries cut, as only around 8 percent of all Polish workers belong to a trade union. Quite literally millions of people face the prospect of having no or very little work in the foreseeable future, threatening a considerable growth in poverty and destitution. This is compounded by the fact that only 16 percent of the unemployed receive any form of unemployment benefit.

Insufficient protections

The government’s response to the economic and social crisis has been to unveil a package of measures, termed the ‘anti-crisis shield’. The headline figure attached to this programme was PLN 212bln (€46.3bln), around one-tenth of the country’s GDP. Whilst this corresponds in size to most stimulus packages introduced in western Europe, the government has calculated this figure by including in its spending lending guarantees and estimates of taxes and contributions which will only be deferred. Therefore, the actual amount that will spent by the Polish government is likely to only make up 3 to 4 percent of GDP.

The ‘anti-crisis shield’ is wholly insufficient to meet the unfolding economic and social catastrophe in the country. The government has pledged to contribute 40 percent of wages (up to the average salary) to those companies maintaining operations, with employers covering another 40 percent. This will be granted if employees agree to take a 20 percent salary cut. For those companies that have ceased operations, the government will provide just 40 percent of the unemployment benefit. Only the self-employed and companies with up to 9 employees can apply to have their social contributions waived for 3 months, although a number of complicated requirements need to be met in order to receive this help. The government is prioritising supporting the country’s banks, through introducing the country’s first Quantitative Easing scheme and buying government securities from financial institutions to ensure liquidity in the system. Little over PLN 7bln (€1.3bln) out of the total sum is earmarked for spending on the health system, whilst the banking sector may receive up to ten times more. Furthermore, defence spending (which is amongst the highest in Europe) has not been reduced to free up funds for protecting the health and living standards of the population.

It is clear that the government has prioritised protecting the profits of the financial sector and large companies and placing the burden of the crisis on working people. Not only can workers lose their jobs and have their salaries cut, but they can also be required to work longer. Under the Act, the working day can be extended to 12 hours, and the minimum rest time reduced from 11 hours to 8 (this also applies to healthcare workers).

The left has criticised the ‘anti-crisis shield’ and called for the government to provide more measures to protect workers. It has proposed such things as significantly raising the unemployment benefit, which is currently only worth around PLN 800 (€175) a month and providing protections for precariat workers. They have also demanded that the government pays troubled companies 75 percent of their employees’ salaries, on the condition that they do not lay off any workers or cut their salaries. After the bill passed through parliament at the end of March, a number of amendments were added in the Senate. These included raising wage subsidies paid by the state to 75 percent for those companies with profit losses and extending the exemption from social insurance contributions to small and medium companies. These amendments have since been rejected by the government.

Tightening power

The government has used the COVID-19 issue to strengthen its grip on political power and introduce measures that are not connected to defeating the virus. Included in the ‘anti-crisis shield’ are articles related to the Social Dialogue Council, a forum for dialogue between employers, employees and the government. These include giving the Prime Minister extraordinary powers to dismiss members of the Council. Also, Prison staff have been given new powers, which include the right to use tasers even when overcoming the ‘passive resistance of prisoners’.

One of the most controversial measures included in the ‘anti-crisis shield’ has been to make changes to the electoral law, including expanding postal voting, in order to allow the presidential elections to be held. These proposals have been criticised, with some local governments announcing that they would refuse to organise the elections in their areas. At the time of writing, the government is proposing to put forward a bill to allow the elections to be held only by postal vote. This contravenes democratic standards, as opposition candidates have been unable to run a proper election campaign and there are huge doubts concerning the possibility to prepare a fair and safe postal vote election, in such a short space of time, for an electorate of over 17 million people. PiS have undoubtedly calculated that this is the best moment for President Andrzej Duda to win the elections and that delaying the election could risk his chances of returning to power.

Conclusions

The spread of COVID-19 has been limited in Poland to date, due to the relatively early implementation of social distancing measures. However, the infections and deaths continue to rise, which is particularly threatening due to problems within the public health system. Furthermore, the possibility for the population to continue social distancing is severely weakened by the economic and social consequences of people losing their jobs and incomes. The government has failed to address this issue sufficiently and introduce large-scale protections for workers and small and medium companies. Simultaneously, the government seems intent on using this crisis to strengthen its hold on power and reduce opposition to it.

Gavin Rae is a sociologst working at Kozminski University in Warsaw and is a founding member of Fondacja Naprzod.