Poland’s State Aid Policy During the COVID-19 Outbreak

Abstract

The COVID-19 pandemic hit the European Union (EU) at the end of the first quarter of 2020. The lack of knowledge about the disease’s ichthyology, prevention, and treatment, meant that virtually all governments worldwide, including those of the EU Member States, introduced numerous restrictions on the movement and close contacts of people. In addition, bans were introduced on certain economic activities which, by their very nature, made it most difficult to maintain social distancing (tourism, hotels, restaurants and cafes). As a result, the losses that entrepreneurs began to suffer were not due to their bad business decisions, failure to adapt to the competition, or failure to foresee the effects of changes in consumer needs and expectations. It is therefore difficult to find fault with the business community. The market situation also failed to meet the basic premises of the market failure concept. From a theoretical point of view, it is assumed that this market failure occurs when the market mechanism does not lead to efficient allocation of resources. For many researchers, but also for the European Commission, this continues to be a premise for accepting public interventions in the EU. However, these premises do not include decisions to freeze economies in whole or in part in response to COVID-19. In this case, we are dealing with two types of state intervention: the first in the form of preventing certain entities from doing business in certain industries, and the second in the form of payment of funds to those who incurred losses.