• Global trade shifts triggered by the pandemic, the Russian invasion of Ukraine and the trade rivalry with China have prompted the EU to take its own measures to support domestic industry. Annual spending on state aid to companies increased by 188 % between 2020 and 2021. Aid from Germany and France alone accounted for as much as 77 % of all notified state aid to companies in the EU between March 2022 and January 2023. However, new measures are limited at EU level, with more transfers between existing funds and plans to mobilise private funds. Efforts to maintain the EU's global competitiveness threaten cohesion and competitiveness within the EU. For example, Central and Eastern Europe did not receive any funding under the third round of allocating funds for low-carbon industry from the Innovation Fund. Support for green industry and the cohesion of the single market is analysed by the Polish Economic Institute in its report 'The Single Market in a Time of Storm: The struggle to maintain competitiveness and cohesion in an era of growing protectionism.'

  • On 14-15 December, EU leaders will decide whether to start accession negotiations with Ukraine. In this context, Kyiv faces a number of challenges, as set out by experts from the Polish Economic Institute and the Ukrainian Centre for Economic Strategy in a joint report entitled Stronger Together: Present and Future Challenges on Ukraine's Road to EU Integration. In the short term, the greatest challenge is to ensure stable sources of financing, especially for significant needs linked to conducting military operations. In the medium term, Ukraine will need to overcome infrastructure problems and attract investments. In the long term, the primary change will be successful reforms that will build strong institutions that will ensure the country’s socio-economic development and allow Ukraine to join the European Union.

  • We conducted a survey among prominent European economists on trade dislocation, economic globalisation trends and the future of Western currencies. According to our respondents, some reshoring is excepted to occur, potentially reducing the EU's reliance on Chinese imports, though this might come at a cost. While the economists foresee a slight decrease in the share of the EUR and USD in global reserves, complete de-dollarisation is not expected. The EUR's position seems more vulnerable than that of the US dollar.

  • The French project of the European Political Community (EPC), including EU member states and 17 other countries in Europe and Eurasia, excluding Russia, has significant political and economic potential. The participation of EPC economies in the global GDP would be 23.5 percent. Currently, this area is home to 689.5 million people, which constitutes 8.7 percent of the world's population. The GDP per capita of countries outside the EU that would be part of the EPC is 88.8 percent of the EU average. The Polish Economic Institute, in its report titled "European Political Community: Geopolitics, Civilization, and the French Vision for the Future of the European Union," analyzes the French idea of the geopolitical and civilizational opening of the EU to other countries.

  • 1 January 2023 marked 30 years since the establishment of the European single market, which Poland has been benefiting from for over 18 years. Poland derives significant economic advantages from European Union membership. If it were not part of the single market, Poland's GDP per capita would be 31% lower and amount to 60% of the EU average. In 2018, almost a quarter of the country’s GDP was indirectly or directly dependent on the EU, and the demand from end consumers in Germany alone generated 1.15 million jobs. These are the conclusions of the Polish Economic Institute’s report entitled How Poland benefits from the single market.

  • Russia’s invasion of Ukraine in 2022 has forced countries in the European Union to end their dependence on Russian gas. Although EU imports of gas (including LNG) increased by 37% in 2014-2021, after the invasion daily flows of Russian gas through pipelines to the EU fell sixfold within a year. Of the main gas markets in the EU, Poland — which was historically the most dependent on Russian supplies — managed to reduce its dependence on Russian imports to the greatest extent. Between 2014 and 2021, it reduced gas imports from Russia by 14% and, in Q1 2023, ended them completely. In its report Secure gas supplies for the winters to come. The European path from crisis to independence, the Polish Economic Institute analyses EU countries’ efforts to end their dependence on Russia and increase their energy security.

  • The Digital Economy and Society Index (DESI) is the main tool used by the European Commission to measure the level of digitalization in EU countries. Although Poland achieved a score of 40.5 out of 100 in the index, placing it 24th among EU countries, the development level of several indicators is approaching that of the classification leaders, including Finland, Denmark, and Estonia. Despite the DESI methodology making it very difficult for member states to make any progress in the ranking, Poland is among the countries that are catching up fastest with the leaders. Currently, the index is undergoing a major transformation as part of the implementation of the Digital Decade, a new EU digitalization strategy. Therefore, changes are necessary in DESI to ensure a more objective assessment of the level of digitalization in individual EU countries, as outlined in the report by the Polish Economic Institute, "How to Measure the Digital Decade - Recommendations for an Evolution of the DESI Index."

  • Over 1 million Ukrainians who sought refugee after Russia invaded Ukraine in February 2022 are currently in Poland. 80% of them believe that Polish society has a positive attitude towards them. However, Poles’ views on refugees’ situation is clearly changing. The percentage who believe that Ukrainian refugees are in need of assistance has fallen from 84% to 50% since the Russian. In its report Poles and Ukrainians — the challenges of integrating refugees, the Polish Economic Institute analyses Poles’ attitudes towards refugees from Ukraine.

  • The economic recovery in 2021 contributed to the consolidation of dependence on supplies from China and Russia by increasing imports from there. In 2018-2021, China's share in material consumption in the EU-27 grew by nearly 1%. At the same time, the process of moving production to other (cheaper or safer) countries, as well as bringing it home, has been visible in recent years. In 2021, FDI flows to developed countries increased significantly, compared to flows to developing countries. The total value of greenfield transactions grew by 15%, but fell by 50% in the case of China. FDI to developed countries rose by 134% in 2021 (y/y), according to the Polish Economic Institute’s report The new face of global trade. Are we dealing with reshoring?, which analyses the impact of the pandemic and the war in Ukraine on global production chains.

  • The Polish economy is at the bottom of the slowdown and inflation has peaked already. We expect inflation to slow down in the coming months and amount to 12.6% in 2023 as a whole. The Polish Economic Institute forecasts that GDP will grow by around 0.8% in 2023 and by 2.2% in 2024. Despite the clear slowdown, the situation on the labour market remains stable. These are the conclusions of the Polish Economic Institute’s “PEI Economic Review: Spring 2023”.

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