Report Contents

March 17, 2021

Europe

POLAND: Bracing for another lockdown

BY Andrius Tursa

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( 4 mins)
  • The rapidly deteriorating epidemiological situation raises the probability of a countrywide lockdown in the coming days.
  • The ruling Law and Justice (PiS) party will present details of its new post-pandemic economic and social development program on 20 March.
  • The pro-EU opposition is unlikely to block the ratification of the EU own resources decision in parliament, but negotiations with the PiS on the topic might be heated and protracted.

The epidemiological situation is deteriorating rapidly. During the past seven days, the number of new cases averaged nearly 18,000, which marks a week-on-week growth of 35%. The number of hospitalizations – currently around 21,500 – has increased by around 38% during the past two weeks and hospital bed occupancy rose from 59% to 72% in the same period, even as hospital capacity has been constantly expanded. The share of positive tests is approaching 30%. The latest surge in the pandemic is mostly associated with the spread of the B.1.1.7 variant of the virus, which is estimated to account for nearly 40% of all infections. This figure is much higher in northern parts of the country.

Four provinces (out of 16) are set to remain under moderate restrictions at least until 28 March and four more (Kuyavia-Pomerania, Lower Silesia, Silesia, and Subcarpathia) could be added to this list starting next week. The regional restrictions entail the closure of all sports and entertainment facilities but allow the operation of some non-essential services such as household goods shops or beauty salons. However, the rapidly deteriorating epidemiological situation is raising the probability of tougher nationwide measures, likely to be announced in the second half of this week.

In terms of vaccinations, progress is moderate relative to EU peers. As of 17 March, 3mn citizens (7.8% of the population) have received a first dose and 1.6mn (4.2% of the population) have got both jabs. The pace has been relatively stagnant over the past few weeks (roughly around 600,000 doses administered per week). This is mostly associated with the limited supplies of vaccines as the country has used more than 80% of the delivered vaccines to date. The country’s health authorities are continuing immunizations with the AstraZeneca vaccine, but the growing concerns over its safety could heighten public reluctance to get inoculated with this particular vaccine. Despite the supply issues, the government is unlikely to acquire Chinese or Russian vaccines outside the EU joint procurement mechanism.

On the economic front, the ruling PiS party will on 20 March present details of the much-promoted ‘New Deal’ program aimed at restoring economic and living standards after the pandemic. So far, Prime Minister Mateusz Morawiecki has outlined ten broad priority areas the program will focus on, including healthcare, employment, education, social issues, the environment, the business climate and cyber policy. The ‘New Deal’ will likely repackage and complement the initiatives presented in the draft of the country’s national recovery and resilience plan to be submitted to the European Commission by the end of April. Considering that the pandemic is far from over in Poland and the disbursement of EU recovery funds is unlikely to start at least until the second half of 2021, the ‘New Deal’ appears as the PiS’s attempt to mitigate its dwindling approval ratings and divert public attention from the resurging pandemic and corruption allegations surrounding the head of the country’s largest company, state-run PKN Orlen.

However, prior to being able to access the EU recovery funds, the PiS faces the tricky national ratification process for the EU own resources decision in parliament, expected in mid-April. This is the mechanism which allows the EU to issue bonds to finance the recovery fund from which Poland will benefit, but it also entails the controversial rule-of-law mechanism. For ratification, the PiS will likely need support from the opposition, as its junior coalition partner United Poland refuses to back the ratification due to the clause that allows the EU to withhold payments if the rule of law is breached. While the pro-EU opposition parties are unlikely to block the ratification, negotiations with the PiS on the topic might be heated and protracted.

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