Economy

After 25 years, negotiations have concluded on a trade agreement between the European Union and Mercosur, a bloc of South American countries. It aims to significantly liberalize trade between the two regions by eliminating tariffs on 91% of goods, reducing the remaining ones, and removing non-tariff barriers.

The trade war presents Europe with an opportunity to leverage the situation for a strategic edge and a push to reduce its dependence on the United States — whether in the areas of technology, energy, defense, or raw materials. The United States\' game of imposing tariffs, along with the European Union\'s retaliatory duties, does not support free trade. It is clear that endlessly raising tariffs on both sides benefits neither party.

Donald Trump\'s trade policies are not just bad economics—they are an attack on individual freedom, global cooperation, and the principles that made America strong. Classical liberalism values free markets, open societies, and limited government interference in voluntary exchange. Trade is a cornerstone of this worldview. When two people—or two nations—exchange goods freely, both benefit. It is the essence of mutual gain.

Poland is taking significant steps towards deregulation, driven by the growing need to simplify its legal framework. Efforts are underway to improve the quality of law by removing outdated and unnecessary regulations, fostering a more business-friendly and efficient environment for citizens and enterprises alike. But will these efforts truly lead to a more dynamic and innovative Poland, or are we simply replacing one set of challenges with another?

The Polish economy depends on deregulation not becoming a passing trend or an episode of the election campaign. Deregulation has the potential to be a major driver of growth. If there were a contest for the economic buzzword of the year in Poland, “deregulation” would be a frontrunner. Thanks to Prime Minister Donald Tusk’s meeting with entrepreneurs in February 2025, the issue briefly rose to the forefront of Polish politics.

The new Trump administration’s recent political offensive targeted at the European Union, as well as its fairly ambiguous approach towards the question of the Russo-Ukrainian war, have led Brussels to initiate a desperate search for EU-based solutions within the sphere of security and defense. Decision-making processes stretching over the past few months have undergone a sudden acceleration.

The illusory truth effect is a psychological phenomenon describing the tendency to believe false information to be correct after repeated exposure. One example I can think of in Slovakia is the statement about \"cherry-picking\" in the hospital sector. Lower-tier hospitals cherry-pick the easy and profitable patients and send the rest to the larger state hospitals, which then make economic losses on them.

I often hear the phrases \'real price\' or \'justified price\', for example, in the question of ambulances or hospitals. They make my economic hair stand on end. It reminds me of how deeply embedded healthcare is in the price thinking of planned economics. Before 1989 in Slovakia, the whole economy was run on the principle of price. A manager in a company calculated the price of steel, plastic, and man-hours to produce one Škoda 120 car, for example.

The wonderful thing about economics is that it recognizes truths about the world that laypeople cannot intuitively grasp, based on simple statements about human action. Consider two concepts: opportunity costs and marginal decision-making based on marginal benefits and costs. If you really understand these two concepts, then it must seem normal to you that there is such a thing as optimal environmental pollution.

In 2024, Romania will break the 50% government debt limit, becoming the EU country with the largest increase in the debt-to-GDP ratio since the start of the pandemic. High budget deficits - levels of 6-9% of GDP - have pushed Romania\'s debt from 35% in 2019 to 52% in 2024, with a forecast of close to 60% in 2026. In just a few years, Romania will likely have a higher debt than Germany.