Economy

In 2024, Ukraine demonstrated a strong commitment to its economic obligations, meeting key conditions under the IMF and EU support programs. The country remained on track with its structural benchmarks, ensuring the flow of critical financing for non-defense expenditures. Entering 2025, risks persist, but Ukraine\'s focus on reforms and its urgent financing needs make staying the course essential.

At the outset of 2024, many economic projections assumed the war in Ukraine would conclude within the year. However, reality defied expectations. The war persisted, bringing new challenges, including territorial losses, large-scale infrastructure destruction, and sustained Russian attacks on Ukraine’s energy grid. The Government faced the pressing need to secure funding for the war effort and mobilize additional defense forces.

Price inflation is not inevitable. One of the most common explanations for price growth is identifying it with capitalism. The argument is that inflation is unavoidable as the economy grows. It is thought that for businesses to have an incentive to invest and wages to grow, the prices of goods and services should rise in the first place.

In its third consecutive meeting, the Governing Council of the European Central Bank (ECB) cut all three key interest rates as expected by a quarter of a percentage point. They are now in a range of 3.00%-3.40%. Although before the announcement of the decision, there were some speculations that monetary policymakers might resort to a more rapid easing, the gradual tapering path ultimately prevailed.

The new coalition in Lithuania has made it clear that the aim is to ensure adequate funding for defense and national security. It has promised to reform the second pillar of pension funds as a priority. In addition, it has proposed a tax reform, with a specific component: progressive taxation for higher earners, irrespective of their income.

The concept of a digital euro is rapidly moving from theory to reality, yet its fundamental purpose remains ambiguous. Proponents argue that it could enhance financial security, expand access to banking services, and bolster geopolitical independence. However, the sheer variety of justifications raises a critical question: is any single argument compelling enough to warrant its creation?

While the EU-MERCOSUR agreement is nearing its final stages, some remain opposed, risking a deadlock in the EU’s approval process. The EU must ensure smooth ratification to strengthen its strategic autonomy in these uncertain times. After 25 years of complex negotiations, the European Union and MERCOSUR have finally reached a landmark trade agreement.

Governor of the Czech National Bank (CNB) Aleš Michl recently commented that the Czech National Bank might consider including Bitcoin in its reserves. Is this really a good idea? Should the CNB invest in this digital asset? The CNB\'s main and most important function is to ensure price and financial stability, as required by its constitutional mandate. Unfortunately, however, it has failed to fulfill this mandate in recent years.

On August 9, Andrzej Duda signed the bill introducing the widow\'s pension. The widow\'s pension is intended to be a new way of combining a retirement pension and a survivor\'s pension. Previously, a widowed retiree could receive their own pension or 85% of their deceased spouse’s pension (the survivor\'s pension). The widow\'s pension allows beneficiaries to receive their own pension or survivor\'s pension along with an additional 15% of the other benefit.

Poland will mark twenty years as a member of the European Union in 2024. In recent years, eurosceptic sentiments undermining the benefits of European integration have gained ground in Poland and Europe. However, the facts contradict these claims: membership in the European Union benefits member states. This is also true for Poland, which will continue to benefit from remaining in the Community, even if it eventually becomes a net contributor.