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Ukraine war stymies post-pandemic economic recovery: President Duda

Russia’s war on Ukraine has stifled Poland’s economic recovery from the COVID-19 pandemic, Polish President Andrzej Duda said on Monday during a business event in Warsaw.

President Duda said that Poland had coped well with the ordeal of the COVID-19 pandemic, albeit the war in Ukraine had posed another challenge for the Polish economy.

To deal with the pandemic in March 2020 the Polish government had adopted an “anti-crisis shield,” which “poured money into the market in an unprecedented way,” the Polish President said.

“We had no doubts that if we had not acted through state intervention in the economy, if we had left it to market forces that were disrupted by the coronavirus pandemic, we would have been dealing with a social tragedy, and factors such as long-term and catastrophic unemployment,” President Duda said.

He added that at the time it was difficult to predict that the pandemic would be followed by war.

Today we are dealing with a war, which causes a whole range of repercussions on the international and economic markets, and unfortunately does not allow the post-pandemic situation to calm down, which we all had hoped for,” the official said.

The impact of rapid increases in energy prices, the president felt, has largely eliminated the possibility of a timely return to post-pandemic economic growth.

“Today, we still have problems on the market. Unfortunately, there are no signs that they will be resolved quickly,” President Duda said.

Polish and European countermeasures

Although playing a major role in the rampant growth of energy prices, Russia’s invasion of Ukraine was just an additional thrust. “Since the second half of 2021, there has been a sharp hike in energy prices in the EU and worldwide,” the European Commission’s website reads, recognising that “the price of fuels has further risen as a consequence of Russia’s unprovoked and unjustified aggression against Ukraine, which has also led to concerns related to the security of energy supply in the EU.”

The state of affairs was further aggravated by Russia’s decision to suspend gas deliveries to the EU.

The bloc responded with the Versailles Declaration agreed on in March 2022. In the document, the EU leaders of the 27 member states agreed to phase out the EU’s dependence on Russian fossil fuels as soon as possible. On May 30-31, 2022, the European Council agreed on a ban on almost 90 percent of all Russian oil imports by the end of 2022 – with a temporary exception for crude oil delivered by pipeline.

This was followed by a political consensus of EU energy ministers on July 26, 2022, on a voluntary reduction of natural gas demand by 15 percent this winter.

The Council also adopted the regulation on reducing gas demand by 15 percent through a written procedure on August 5, 2022. The adoption follows the political agreement reached in July.

Poland has adopted, as an inflation countermeasure, a temporary reduction of VAT on food, gas and fertiliser to zero percent, and a VAT reduction on electricity, heating power and fuels. The reductions were prolonged a number of times with the hitherto final deadline set for December 31, 2022.


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