Economists Against Fuel Subsidies, Aging EU, and Merz's Ukraine Proposal

The government's decision to extend the CPN fuel subsidy program until the end of May, tying its duration to oil prices falling to $75-$80 per barrel, has drawn sharp criticism from most economists surveyed by Rzeczpospolita. While Minister of Energy Miłosz Motyka defends the program as a necessary measure to shield lower-income households and the middle class from rising fuel costs, experts argue the program is a costly drain on the state budget and actively discourages energy conservation. They contend that the current structure perpetuates high consumption of gasoline and diesel instead of promoting energy savings.

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The government's CPN package, intended to mitigate fuel price increases, has been extended until the end of May. The Minister of Energy announced that the program will remain in effect until the price of a barrel of oil drops to the $75-$80 level.

Adding to economic concerns, Eurostat data paints a stark picture of Europe's aging population. The median age in the European Union has climbed to nearly 45, a significant increase over two decades. With individuals over 65 now comprising 22% of the EU population, compared to just 14.5% for children under 14, experts warn of an impending demographic crisis that could destabilize the economic and social models of member states. This demographic shift poses serious challenges to pension systems and public finances, demanding urgent action.

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The median age in the European Union was almost 45 in 2025. This is an increase of more than five years over two decades.

Furthermore, the European Commission has revised its economic outlook for the Eurozone downwards, projecting a mere 0.9% GDP growth for 2026. This slowdown is attributed to the ongoing conflict in the Middle East, elevated energy prices, and persistent geopolitical instability. The weakening economic performance is also reflected in the Purchasing Managers' Index for the services sector, which has fallen to a five-year low. The Commission also forecasts a rise in public finance deficits across Eurozone countries to 3.3% of GDP.

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The European Commission has lowered its forecasts for the Eurozone economy. According to the latest estimates, GDP growth in the Eurozone in 2026 will be only 0.9%, compared to 1.3% a year earlier.

In a notable diplomatic development, German Chancellor Friedrich Merz has proposed granting Ukraine "associate member" status within the EU. This proposal, aimed at encouraging Kyiv towards greater flexibility in peace talks with Russia, would allow Ukrainian officials to participate in EU summits and ministerial meetings without voting rights. This initiative underscores the growing European efforts to find a political compromise amidst the protracted conflict, a perspective that resonates deeply here in Poland, given our proximity and historical ties to the region. While Western media might focus on the diplomatic maneuvering, for us, this is about the immediate security and stability of our neighborhood.

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German Chancellor Friedrich Merz has proposed granting Ukraine the status of an 'associate member' of the European Union.