State aidState aid for the improvement for the improvement

of regional competitivenessof regional competitiveness

Józef WęgrzynJózef WęgrzynDirector of Departament of Economy and InfrastructureDirector of Departament of Economy and Infrastructure

Marshal’s Office of the Malopolska RegionMarshal’s Office of the Malopolska Region

Plan of the presentation

• Some statistical data• State aid legislative framework in Poland• State aid in Poland and EU-15 in years 2000-

2003• Forms of the state aid in Poland and in the EU• Cases of the regional aid in Malopolska• Conclusions

Where we are...

London – 1650 km

Berlin – 600 km

Brussels – 1300 km

Paris – 1550 km

Madrid – 2850 km

Warsaw – 300 km

Prague – 460 km

Vienna – 460 km

Rome – 1600 km

Some statistical data...

Poland

• Population - 38.2 million

• GDP – 189 billion EUR

• Total average annual state aid (in the period 2000-2003) – 2,41 billion EUR

• State aid as percentage of GDP – 1.3%

• State aid per capita – 63 EUR (or 127 PPS)

State aid in Poland...

State aid is a form of state intervention used to promote a certain economic activity.

Existing aid and the „interim procedure”

Types of the state aid

• Horizontal objectives– R&D; environment; SME; commerce;

employment aid; training aid; heritage conservation; cultural aid; natural disasters; risk capital; regional aid

• Sectoral aid– Manufacturing– Coal– Financial services– Other

Map of the regional aid

State aid in 2003

State aid awarded:

in the EU – € 53 billion, 2003

in Poland – € 6 521.5 milion, 2003 (1 Euro = 4.39 PLN) (28 627.5 mln PLN)

in Malopolska – € 306.06 milion, 2003 (1 Euro = 4.39 PLN) (1343.6 mln PLN)

State aid awarded in the New Member States,

in 2003 (as % of GDP)

0,11 0,24 0,270,51 0,6

1,041,32

2,76 2,85

3,86

1,37

0,57

0

1

2

3

4

5

EE LV LT SK SI HU PL CZ CY MT NewMS

EU-15

Source: State Aid Scoreboard, spring 2005 update, Brussels, 20.04.2005, DG Competition, COM(2005)147 final.

Breakdown of the state aid in Poland and the EU by its assignment

State aid in years 2000-2002

Type of state aid

EU Poland

Horizontal 50% 60%

Sectoral 27% 34.3%

Regional 23% 5.7%

State aid instruments in Poland and EU-15

32%

1%

14% 14%

59%

6%

35%

3%

9%

24%

0%

20%

40%

60%

Grants Tax subsidies Capital subsidies Soft loans Equityparticipation

Poland

EU-15

Source: State Aid Policy Program for 2005-2010 years, Ministry of Economic Affairs & Labour, Warsaw 2005

Breakdown of state aid in Poland and the EU by instruments in period 2000-2002

Form of the state aid EU Poland

Grants 58,6% 35,3%

Tax subsidies 24,0% 31,5%

Equity participation 5,6% 0,7%

Soft loans 8,6% 14,4%

Guarantees 3,2% 13,5%

Existing programmes

Coal sector – 24,9 billion PLN

Metal industry – 2,8 billion PLN

Shipbuilding sector – 0,6 billion PLN

Railways – 5 billion PLN

Regional aid (SEZ) – 1,6 billion (10% of total investments)

Horizontal aid - Phare, Structural Funds – 0,8 billion PLN (for SMEs); - support for R&D sector – 0,34 billion PLN

State aid in Poland, 2000-2003

€ 0

€ 500

€ 1 000

€ 1 500

€ 2 000

€ 2 500

€ 3 000

€ 3 500

€ 4 000

€ 4 500

€ 5 000

2000 2001 2002 2003

Mil

lio

ns

Horizontal Aid

Sectoral Aid

Regional Aid

Agriculture

Other purposes

Data n/a

Source: Report about state aid awarded in Poland in 2003, Office of Competition and Consumer protection, Warsaw, September 2004.

Cases of the state in Malopolska

• The Krakow Technology Park (SEZ)

• Integrated Regional Operational Programme (ERDF)– Measures 2.5 – Promotion of Entrepreneurship – Measure 3.4 – Micro-enterprises

• Guarantee Fund and Loan Fund at the Malopolska Agency for Regional Development

Special Economic Zones(untill 2017)

The Krakow Technology Park (KPT) composed of four subzones: • Jagiellonian University 3rd Campus

(Biotechnology and Software)

•Tadeusz Kosciuszko University of Technology Campus (Industrial Engineering and IT Solutions)

• Industrial Park Sendzimir’s Steel Works (Industrial Area)

•Tarnow Plastic Valley (Chemical Industry Park)

www.sse.krakow.pl

www.europark.com.pl

The Gorlice Industrial Area is part of SEZ EuroPark Mielec The main activity in the Gorlice zone is focused on oil and energy production.

New investments in Krakow Technology Park

• Employment – 3644; New employed person – 2163

• Present investment input – 107 818,5 mln euro (432 352 000 zł.) Planned investment input – 196 926,2 mln euro (789 674 000 zł.)• Main investors: - ComArch S.A.

- RR Donnelley Polska Sp. z o.o. - Motorola Electronics Polska Sp. z o.o. - AZ Soft S.A. - Pfaffenhain PL Sp. z o.o.

Public aid in future

Policy in scope of public aid in years 2005 – 2010(Program adopted by the Council of Ministers on 29th March 2005)

Public aid in Poland shall fully comply with the standards and trens in the European Union

Two particular aims -

Public aid shall be focussed on innovative actions

Granting shall be more efficient and effective

Future priorities and measures

•Supporting actions of horizintal nature, in particular these directed to SMEs

•Supprting economic development of regions

•Phasing-out restructuring processes

Some conclusions and projections

•Necessary to co-ordinate activitities of granting bodies and establishing coherent system (more than 3500 granting bodies now!)

•Social Insurance Institution, Tax Offices shall be involved in programming, monitoring, reporting and evaluation of state aid as major granting bodies

•State aid in Poland shall be limited and targeted to innovative projects

•15,5 billion Euros - projection of state aid expenditure in Poland in years 2005 – 2010

Thank you for your attention

Marshal Office of the Malopolska RegionMarshal Office of the Malopolska RegionDepartment of Economy and InfrastructureDepartment of Economy and Infrastructure

www.malopolskie.pl

jozef.wegrzyn@umwm.pl.pl