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OFFICE OF COMPETITION AND CONSUMER PROTECTION Department of International Relations and Communication The aid from State funds granted to undertakings last year amounted to 16.4 billion zloty, around 40 percent less than the year before – those are the results of a report prepared by the Office of Competition and Consumer Protection adopted by the Council of Ministers on 13 December According to “The report on State aid granted to undertakings in Poland in the year 2004”, last year the total value of the support granted to undertakings amounted to 16.4 billion zloty, i.e. 1.9 percent of the Gross Domestic Product. This is a significant decrease in relation to the year 2003, when the total amount of the support aggregated to 28.6 billion zloty (3.5 percent of GDP). The Office of Competition and Consumer Protection, which prepares annual reports on the amount and forms of State aid, notes that nearly three fourths of the support is granted by the following institutions: tax and customs offices (3.2 billion zloty), the Minister of Treasury (1.1 billion zloty), the Minister of Economic Affairs and Labour (1 billion zloty) and the President of the State Fund for Rehabilitation of Disabled Persons (958 million zloty). It should be added that within the scope of aid in the transport sector, the Minister of Finance granted aid in the amount of around 3.7 billion zloty. Horizontal aid (support for specific purposes) granted in the year 2004 amounted to 4.4 billion zloty, and most of it was aimed for restructuring – 3.6 billion zloty, and employment – 537 million zloty. Last year the total of the horizontal aid exceeded by over 1.6 billion zloty the amount of this kind of aid granted in the year 2003. The value of the sectoral aid aggregated to 2.8 billion zloty (in the year 2003: 20 billion zloty), out of which four fifths was restructuring funds for the mining industry. One fifth was granted to shipbuilding industry, also for the purposes of restructuring. Most of the 659 million zloty granted in the year 2004 within the scope of regional aid was designated for supporting new investments. This support almost entirely consisted of income tax exemptions for undertakings conducting economic activity in the special economic zones. A year before the amount of this kind of aid was 100 million zloty less. Last year the biggest aid beneficiary was PKP Group (Polish State Railways Group) – 7.1 billion zloty (Polish State Railways Ltd. alone received 6.5 billion zloty). The second biggest beneficiary was the coal sector, its leader - Kompania Węglowa received 1.3 billion zloty. The following beneficiary was the shipbuilding sector, including Stocznia Gdynia – 467.7 million zloty, Stocznia Szczecińska Nowa – 124.2 million zloty of aid. Among the first ten biggest beneficiaries were also oil sector companies: Rafineria Nafty Glimar – 228.9 million zloty and Rafineria Trzebinia – 187.4 million zloty of support. Almost one third of the aid in the year 2004 was granted to undertakings conducting economic activity on the territory of the Silesia voivodeship (70.9 percent in the year 2003). Undertakings from Mazowieckie voivodeship received 9.6 percent of the aid, and from Małopolskie voivodship – 9.3 percent. The aid concentration in these three regions is connected to the large number of undertakings registered on their area, and – in particular – to the mining companies under restruction. Warsaw, 13 December 2005 – Press Release – Page 1 of 2 OFFICE OF COMPETITION AND CONSUMER PROTECTION Department of International Relations and Communication Last year the structure and the total of State aid granted in Poland still differed from the average aid granted in the European Union Member States. According to the report prepared by the European Commission the average share of the aid in the GDP in all Community countries amounted to 0.6 percent (in Poland - 1.9 percent in the year 2004 and as much as 3.5 percent in the year 2003). The largest differences in the structure of the State aid in comparison with EU countries relate to the aid for research and development (only 1.3 percent in Poland in relation to 14 percent in the “old” European Union countries and to the 12 percent average in all EU countries), coal mining (the EU average is twice as low as the aid granted to Polish mines) and support for small and medium-sized undertakings (0.8 percent in Poland in relation to the 12 percent EU average). It is also alarming that the share of donations still differs from the “old” Member States’ average. In the European Union this form of aid, being one of the most transparent , constitutes 67 percent of the aid; and in Poland only 24.9 percent. Additional information: Elżbieta Anders, OCCP Press Spokesperson Department of International Relations and Communication Office of Competition and Consumer Protection Pl. Powstańców Warszawy 1, 00-950 Warszawa Phone: (22) 827 28 92, 55 60 106, 55 60 314 E-mail: [email protected] Warsaw, 13 December 2005 – Press Release – Page 2 of 2