Trade, Innovation, and Productivity
The recently published European Commission annual report on the monitoring of the EU agri-food trade shows relatively good performance of the EU agri-food exports in the first half of 2021 with a 6% increase in value y/y. As the last year, the main destinations included the United Kingdom, the United States, and China. The important products in turn included wine, pork, pasta, and pastry, accounting for 8.5%, 5.6%, and 4.5% of the total value of the 2021 extra-EU agri-food exports, respectively. This relatively favourable outcomes may be due to several factors, including, among others a more stable character of the consumption of basic goods compared to durables and luxury goods due to intertemporal consumption smoothing. Additionally, the geographical indications (GI) support the marketing strategy of the EU by providing quality assurance and reducing information asymmetry. With 3,377 registered GI products in the EU, the GI have thus become an essential object of the EU agri-food trade policy and are part of all recent trade agreements signed by the EU and in the EU. The trade agreements are another explanatory factor of the strong international trade performance of the EU agri-food sector as the agri-food products traded under 45 preferential agreements in operation represent, respectively, 31% and 41% of the total EU agri-foods exports and imports in 2021.
Labour Market and Environment
On September 15, the European Parliament approved modifications in the EU Blue Card scheme, which makes the EU labor market more accessible to the highly skilled non-EU nationals and aims at diminishing the staff shortages in key sectors.
As of 2019, only 36,806 Blue Cards were issued in the EU. Noteworthy, considering the total number issued that year, Poland stood at the second place in the EU (2,104 – 5.7% of the total), followed by France (2,036 – 5.5% of the total), whereas Germany remained the most important user of this scheme with 78.4% of the issued Blue Cards in the EU. Most of the EU Blue Cards issued in Poland were granted to the nationals of Ukraine (764), India (397), Russia (317), Brazil (131), Belarus (94), and Turkey (79).
The recent changes should facilitate the process of granting EU Blue Cards by reducing the required minimum period of presenting a valid work contract in the EU from 12 to 6 months and lowering the salary threshold to at least 100% and no more than 160% of the average gross annual salary (from the previous 150% minimum requirement with no upper limit). The new rules will also simplify the family reunification procedures and allow the Blue Card holders to move to another Member State following the 12 months period of employment in the Member State that initially granted the Blue Card. The changes to scheme should thus further increase the attractiveness of Poland for non-EU professionals.
Macro and Fiscal
Ahead of winter season in Europe, natural gas prices are surging to historical highs. In recent days, commonly used Dutch TTF Gas Futures index went above 70 EUR, compared to 17 EUR in January 2021. This situation is a consequence of a wide range of factors starting with long and relatively cold previous winter which drained the stocks of natural gas all across Europe and low performance of energy production based on renewable energy sources. On top of that, the recovery of European industry after the Covid-19 crisis resulted in increased demand for electricity which in turn made it harder to replenish the stocks of gas ahead of heating season. Adding insult to injury, the biggest supplier of gas, Russia, is using this situation to increase political pressure on Europe to advance progress related to Nord Stream 2 pipeline. This instrumental use of supply of natural gas has probably been the most significant factor in recent growth of prices but other factors such as planned expansion of ETS allowances scheme are looming.