CASE Highlights

Trade, Innovation, and Productivity

On September 8th, the European Commission published a proposal for a regulation on the elimination of customs duties on selected EU imports from the United States (US) worth about USD 200 million per year. The initiative is to be reciprocated by an equivalent reduction on the EU exports to the US. The decision is in line with the August 21st Joint Statement of the US and the EU that launched the first in decades negotiations of duties redaction between the partners. In substance, the initiative will cover the elimination of tariffs on imports of US live and frozen lobster products worth USD 111 million a year to the EU. On the US side, it will include a 50% duties reduction on prepared meals, crystal glassware, surface preparations, propellant powders, lighters and lighter parts. The ultimate objective of the Tariff Agreement is to unlock new opportunities for the EU and US companies, improve trade relations, and mitigate ongoing disputes between the partners. While the agreement will have a negative impact on the budget of the EU in the form of foregone duties, the Single Market would benefit significantly from improved access of the EU exports worth about USD 160 million a year.

Labour Market and Environment

Vocational education and training (VET) aims to provide adults with skills relevant for the labour market, personal development, and social inclusion. It is perceived as one of the most important EU tools to boost entrepreneurship, competitiveness, research, and innovation within the Single Market. Its relevance and role have been strongly emphasised throughout the European Commission’s ambitious agenda on the COVID-19 market recovery. Further, the recent European Commission’s activities dedicated to the improvement of VET performance and development of digital skills among adults through VET have already been introduced via selected EU-level programmes (e.g. Erasmus+). Nevertheless, as CASE DEEP project results show, the barriers for digital transformation do not only lay on the side of individuals or the VET providers. The reluctance to engage in the digital transformation and VET systems, therefore, is strongly observed at the local and companies’ levels. Thus, engagement of different stakeholders (including private sector and local authorities) into the transformation of the VET practices and inclusion of digital skills within the Single Market is necessary for the effective implementation of the EU policies and activities.

Macro and Fiscal

On September 17th, Polish Minister of Finance, Tadeusz Kościński, presented in the Sejm the amendments to the 2020 annual budget triggered by the COVID-19 crisis. The Ministry expects that the budget deficit may amount up to PLN 109.3 billion, which will be about 5% of the Polish GDP. The objective of the balanced budget assumed before the pandemic will not be met due to both increased expenditure (up by PLN 72.7 billion) and decreased revenue (down by PLN 36.7 billion). The main source of revenue, i.e. VAT, will bring PLN 26.5 billion less than envisaged earlier. The new VAT revenue assumptions are in line with CASE’s forecast. The drop in Poland's GDP is expected to translate into increase in the VAT Gap by nearly 5 percentage points up to 14.6% of the VAT Total Liability, which will inflate the revenue effect of the shrinking tax base.

 

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