Published: 06/06/2025

The European Union is facing historic economic and demographic challenges, according to the latest report by the Polish Economic Institute. Although the EU remains the world’s second-largest economy and one of the most attractive places to live, its significance in the global economy has been systematically declining. The authors of the report “Setting the EU Budgetary Scene – Economic State of Affairs” indicate that the Union is losing competitiveness and innovation capacity compared to the United States and China, while an aging and shrinking population will place additional pressure on public finances in the coming decades. Reforms supporting productivity, internal market integration, and a new, pragmatic trade policy are necessary for the EU to maintain high living standards and a strong international position.