Andrzej Domański in the EU: High energy costs are destroying European industry

During talks in Brussels, Polish Finance Minister Andrzej Domański presented a pessimistic diagnosis of the state of European processing. According to the head of the ministry, the key development barrier is drastically high energy costs, which put EU companies at a disadvantage against global competition. The minister emphasized that the lack of decisive action in this area threatens further deindustrialization of the continent, pointing to numerous job reductions and closures of key plants in the chemical sector in recent years. Poland is actively seeking support from member states to locate the headquarters of EUCA in Warsaw, which would strengthen the country's position within the community structures. „To restore the competitiveness of European industry, we must lower energy prices. This is our key challenge.” — Andrzej Domański Since the energy crisis triggered by Russia's invasion of Ukraine in 2022, European Union countries have been grappling with persistently higher gas and electricity prices compared to the US or China, forcing a revision of the previous economic model based on cheap raw materials from the East. Despite the difficult situation in industry, EBRD revised its growth forecast for Poland upwards, estimating GDP growth at 3.7% in 2026. However, bank analysts point to the risk of weaker foreign demand, which is confirmed by data from the Bureau of Investments and Economic Cycles showing no improvement in the inflow of new orders. Simultaneously, in the banking sector, a discussion is growing over the impact of the planned increase in the CIT rate to 30% in 2026. Although voices have appeared in the media about a possible drastic drop in bank profits, experts assess that stable lending activity and high capital resilience in the sector should cushion the negative effects of tax changes and forecasted interest rate cuts. 100 tys. — jobs lost in the EU chemical sector The market situation is complemented by reports of difficult conditions in agriculture, where mounting debt and financial liquidity problems are becoming an increasing challenge for many farms. Meanwhile, the European Commission announced the establishment of the EastInvest instrument, which is to mobilize at least 28 billion euros to support border regions, which is of key importance for Poland's eastern voivodeships. The Warsaw Stock Exchange recorded a correction, mainly driven by declines in valuations of KGHM and PZU, while maintaining positive long-term prospects for the entire market.