Czech real estate prices increased by 10.7% in 2024 as market activity rebounds

Real estate prices in the Czech Republic rose by an average of 10.7% in 2024, reflecting a continued recovery in market activity following the post-pandemic slowdown. Property sales increased by 34%, while the sale of new buildings surged by 51%, according to data from the Czech Banking Association and Flat Zone. The housing market is now approaching pre-crisis levels after experiencing a significant upturn in 2023.

The price of older apartments rose by 10% nationwide, with Prague recording an 18% increase year-on-year. Brick houses maintained a significantly higher price per square meter than prefabricated buildings, while new construction prices grew at a slower pace, averaging 8% nationwide and 9% in Prague. The value of family homes remained relatively stable across the regions, but Prague saw a 15% increase in this category.

Sales and Market Trends

The return to pre-crisis transaction levels continued throughout 2024, with new developments experiencing the strongest growth in sales. By the end of the year, over 16,000 vacant apartments in new buildings under construction were available across the country.

The sale of older apartments increased by 24%, while family house sales rose by 37%. Prague and the Central Bohemian Region accounted for the largest share of transactions, with 39% of older apartment sales and 60% of new apartment sales occurring in these areas.

Flat Zone Managing Director Milan Roček noted that the demand for housing in Prague, Brno, and the Central Bohemian Region continues to exceed supply. He emphasized that new construction remains insufficient in areas with the highest demand, pushing prices up, particularly for older prefabricated apartments, which have risen at an unjustifiably high rate compared to new developments. In Prague, the price of older apartments remains four times higher than in regions such as Ústí nad Labem and Karlovy Vary.

Challenges in Housing Availability

Despite an increase in housing construction, the availability of apartments remains a major issue due to high property prices, slow completion rates, and rising mortgage costs, according to Czech Banking Association Chief Economist Jaromír Šindel. He also pointed to limited capital market development and slow economic growth, which has led to stagnant disposable income levels, the slowest in the region over the past year.

While 2024 saw above-average new construction openings, particularly in Prague and the Central Bohemian Region, the number of completed apartments remains below the long-term average. The cumulative housing deficit now exceeds 20,000 apartments, with half of the shortfall concentrated in Prague and the surrounding regions.

With ongoing supply constraints and strong demand in key urban areas, real estate prices are expected to continue rising, further shaping the country’s housing market dynamics in 2025.

Source: CBA and Flat Zone

Former Motol Hospital Director and ČUS Head jailed in corruption case

Former Motol University Hospital director Miloslav Ludvík and Czech Union of Sport (ČUS) chairman Miroslav Jansta have been placed in custody as part of an ongoing corruption investigation related to public procurement at the hospital. The court ruled that both men posed a risk of continuing criminal activities or influencing witnesses. A third defendant, believed to be Mykhailo Popovych from the company Midian-Coral, was also placed in custody.

The European Commissioner proposed custody for five out of 17 individuals facing prosecution in the case, with the court still set to rule on one additional suspect. Meanwhile, the Czech Minister of Health, Vlastimil Válek (TOP 09), is expected to announce the hospital’s new leadership within the coming days.

Corruption Allegations and Financial Implications

According to investigators, Jansta assisted Ludvík and his operational and technical deputy, Pavel Budinský, in legalizing bribes received from hospital suppliers. The police have charged the suspects with bribery, subsidy fraud, money laundering, and harming the EU’s financial interests. If convicted, they could face up to 12 years in prison.

Ludvík and Jansta’s lawyer, Josef Monsport, has appealed the custody decision. He argued that Jansta has chosen not to comment on the allegations and disputed the contents of wiretap recordings cited as evidence in the case. Monsport specifically challenged claims that bribes amounting to tens of millions of crowns were accepted in exchange for inflating the cost of reconstructing the hospital’s Blue Pavilion.

The corruption investigation could also jeopardize EU funding for Motol University Hospital projects. If the allegations of misusing EU financial resources are confirmed, the Czech Republic may be denied further EU funding for hospital projects. So far, the government has spent nearly CZK 841 million on the Motol Cancer Institute, which is expected to cost CZK 4.5 billion, with CZK 3.7 billion originally set to come from the EU through the National Recovery Plan (NPO). The hospital is currently working on seven additional projects under the NPO, worth nearly CZK 1 billion.

Government and Institutional Reactions

Health Minister Válek assured that ongoing hospital construction projects would continue as planned. “None of the projects under contract have been halted. These buildings must be completed,” he stated. Válek dismissed Ludvík from his role on Monday, appointing Lucie Valentová-Bartáková, deputy for medical and preventive care, as the hospital’s interim leader.

The scandal has also impacted the Czech Union of Sport (ČUS). The organization’s board is set to meet later this week to discuss interim leadership arrangements. ČUS spokesperson Jiří Uhlíř confirmed that the union remains fully operational and that it has not been officially contacted by investigators regarding the Motol case. Jansta’s detention also does not affect his role as chairman of the Czech Basketball Federation.

Further Investigations and Additional Suspects

Budinský, who also serves as chairman of the Czechoslovak Legionary Community (ČsOL), is facing internal scrutiny, with an extraordinary meeting of the ČsOL Presidency scheduled for 4 March. According to ČsOL’s regulations, membership is revoked upon a final conviction, meaning the assembly may have to decide on his future role.

Among the other high-profile figures implicated in the case is Luděk Kostka, co-owner of Geosan Group, the company responsible for the Blue Pavilion reconstruction. Reports indicate that Geosan’s sales director, Ivan Havel, is also under investigation. Authorities are additionally probing a CZK 3 billion oncology center contract awarded to Olomouc-based construction firm Gemo, whose director, Miloslav Bouda, is believed to be among the accused.

The police are reportedly investigating other hospital contractors involved in cleaning, painting, heating, and maintenance services, raising the possibility of further charges. The case marks one of the most significant corruption investigations in the Czech healthcare sector in recent years, with authorities continuing to examine the full extent of financial misconduct.

Source: CTK
Photo: Fakultní nemocnice v Motole

Czech government approves CZK 900 million for affordable rental housing

The Czech government has approved CZK 900 million in funding for the construction of affordable rental housing, with financing available as loans through the State Investment Support Fund (SFPI). The funding will initially support 64 projects, with further projects expected to receive assistance in the future, Prime Minister Petr Fiala (ODS) announced after a cabinet meeting.

At the beginning of February, 92 projects applied for financial support, with total aid expected to reach CZK 5.1 billion. Of this amount, CZK 3.2 billion is allocated for preferential loans, while CZK 1.9 billion is designated for one-time subsidies. The CZK 900 million approved today is the first tranche of the total loan allocation.

Finance Minister Zbyněk Stanjura (ODS) confirmed that the initial funding will come from the state budget reserve. Additional funding for loans will be considered in the 2026 budget and included in medium-term financial plans for 2027 and 2028. The subsidy portion of the program is already accounted for in the SFPI’s 2025 budget.

According to Regional Development Minister Petr Kulhánek (STAN), the government aims to prioritize projects that already have building permits, ensuring that construction can begin as early as spring when the construction season starts.

Loan and Subsidy Terms for Affordable Housing

Support from SFPI will be directed toward rental apartment construction, including new buildings, renovations, and expansions. The funding structure allows for immediate use of up to 40% of project costs while meeting specific criteria. The remaining amount can be covered by a subsidized loan at a rate tied to the EU base rate for the Czech Republic, reduced by up to three percentage points.

Loans can cover up to 65% of total project costs, and when combined with subsidies, they may finance up to 90% of an investment. The repayment term extends up to 30 years, with no penalties for early repayment. Both legal entities and local governments are eligible to apply for support.

This initiative marks a significant step in addressing housing affordability in the Czech Republic, with the government aiming to stimulate rental housing development through financial incentives and long-term investment.

Source: CTK

European Commission unveils €100 billion clean industrial deal to drive decarbonisation

fletcher@cijeurope.com
26 February 2025
Other

The European Commission (EC) has introduced the Clean Industrial Deal, an initiative aimed at accelerating decarbonisation while ensuring the future of industrial production in Europe. The agreement is set to mobilise over €100 billion in the short term to support clean manufacturing within the EU.

Commission President Ursula von der Leyen emphasised the urgency of the initiative, stating that while Europe remains a global leader in industrial innovation and production, the demand for clean products has slowed, and investments are shifting to other regions. High energy costs, regulatory burdens, and global competition have hindered European companies, and the Clean Industrial Deal aims to remove these obstacles and provide a clear economic rationale for maintaining production in Europe.

The initiative focuses on two key sectors:
1. Energy-intensive industries, which require urgent support for decarbonisation and electrification while facing high energy costs and competitive disadvantages.
2. Clean technologies, which are essential for Europe’s future competitiveness and industrial transformation.

The agreement also promotes a circular economy, aiming to reduce dependence on third-country suppliers of raw materials by maximising the EU’s limited resources. The Commission plans to introduce sector-specific action plans, including a strategy for the automotive industry in March and a plan for steel and metals later in the spring. Additional measures are expected for the chemical industry and clean technology sector.

Financial and Regulatory Support for Clean Industry

The Clean Industrial Deal includes a comprehensive financial framework to support clean production in the EU, with €100 billion in funding. This includes an additional €1 billion in guarantees under the current multiannual financial framework.

To support this initiative, the Commission will introduce a new State aid framework, expand the Innovation Fund, and propose the creation of a Bank for Decarbonising Industry, which will channel funding from sources such as the ETS (Emissions Trading System) and InvestEU.

The European Investment Bank (EIB) Group will also play a key role by launching new financial instruments, including:
• A network production package to support manufacturers of clean energy infrastructure.
• A counter-guarantee scheme for power purchase agreements (PPAs) benefiting SMEs and energy-intensive industries.
• A CleanTech guarantee instrument under the Tech EU programme, backed by InvestEU.

A Political Priority for the EU’s Future

In her 2024-2029 policy agenda, President von der Leyen committed to finalising the Clean Industrial Deal within the first 100 days of the Commission’s new mandate. The initiative is positioned as a key priority for ensuring Europe’s industrial competitiveness and economic prosperity in the transition to a cleaner economy.

Source: EC and ISBnews
Photo: European Commission President Ursula von der Leyen

Google sees AI and Cloud growth in Poland’s Cybersecurity, Health, and Energy sectors

Google sees cybersecurity, healthcare, and energy as the sectors with the greatest potential for cloud computing and artificial intelligence (AI) adoption in Poland, according to Magdalena Dziewguć, country director at Google Cloud Poland.

In an interview with Business Insider Polska, Dziewguć highlighted cybersecurity as the most pressing area for AI deployment, citing Poland’s exposure to frequent cyberattacks due to its geopolitical location. She emphasized the role of AI in enhancing security solutions and supporting local cybersecurity specialists by improving technological infrastructure.

The healthcare sector was identified as another critical area where AI could address systemic inefficiencies. Dziewguć pointed to a shortage of medical professionals and outdated infrastructure, suggesting that AI-driven solutions could improve resource management, optimize service access, and reduce costs. However, she noted that success would depend on cooperation from Polish companies and institutions.

The energy sector was also highlighted as a priority, as Poland pushes forward with an ambitious energy transition aimed at increasing renewable energy adoption, cutting costs, and improving resource management. AI, she explained, could facilitate more effective planning and implementation of these changes. However, she stressed that the impact would depend on industry and institutional engagement.

Google is actively investing in Poland’s AI and cloud infrastructure, including a collaboration with the Polish Development Fund (PFR) to expand AI capabilities. Dziewguć reiterated Google’s commitment to sustainable energy, stating that the company will continue investing in green energy sources to support its operations in Poland.

She also addressed concerns that AI primarily serves as a cost-cutting tool, dismissing fears about widespread job losses. Instead, she described the shift as a market reorganization, with outdated IT segments, such as legacy databases and older programming languages, gradually being phased out. While some jobs may disappear for those without updated skills, demand for new AI-related expertise is growing.

To illustrate the sector’s growth, she pointed to Polish AI-driven companies such as Nomagic, specializing in automation and robotics, and Synerise, which uses AI to optimize marketing and financial services. These companies, she said, are expanding rapidly as AI solutions improve efficiency, cost savings, and security.

The Polish government has also signaled strong support for AI development. In mid-February, the Polish Development Fund (PFR), National Cloud Operator (OPK), and Google Cloud signed a letter of intent to develop a strategic plan for AI implementation across key industries. During a meeting with Prime Minister Donald Tusk, Google CEO Sundar Pichai estimated that AI-driven solutions in energy, cybersecurity, and other sectors could boost Poland’s GDP by 8%.

Google has also pledged billions of zlotys in Polish investments, with a focus on government collaboration and AI deployment acceleration. Additionally, Google.org, the company’s philanthropic arm, announced a $5 million grant to support technology training programs in Poland. As part of its broader initiative, Google aims to train 1 million people in AI skills.

The company’s expanding footprint in Poland reflects the growing role of AI and cloud computing in shaping the country’s digital and economic future.

Source: Google and ISBnews

Loan companies in Poland see strong growth in special-purpose and cash loans in January

Loan companies in Poland issued significantly more special-purpose and cash loans in January 2025, according to data from the Credit Information Bureau (BIK). The number of special-purpose loans increased by 24.9% year-on-year (y/y), while the total value of these loans rose by 13.8%. Similarly, the volume of short-term cash loans, commonly referred to as “wemmies,” grew by 21.8% y/y, with a 35.8% increase in their overall value.

Loans granted for periods exceeding 60 days also saw substantial growth, with a 19.1% rise in the number of loans issued and a 39.6% increase in total value compared to January 2024.

The average amount of a newly issued special-purpose loan in January 2025 was PLN 644, which is 8.9% lower than the average loan amount from a year earlier. This suggests that borrowers were increasingly opting for smaller loans, leading to a decline in the average loan size despite the higher number of loans issued. BIK also noted that by January 2024, all granted special-purpose loans had been fully reported, meaning that the 2025 figures provide an accurate reflection of the current market conditions, without the impact of previous data underreporting.

The average payday loan issued in January 2025 amounted to PLN 2,487, reflecting an 11.7% increase from the previous year. The total value of payday loan sales reached PLN 1.053 billion, a 35.8% increase y/y, with wemmies accounting for 72.3% of the total value of cash loans issued that month.

For longer-term cash loans exceeding 60 days, a total of 74,000 loans were granted in January 2025, with a total value of PLN 404 million. This represented a 19.1% rise in the number of loans issued and a 39.6% increase in overall loan value compared to January 2024. The average loan amount for this category rose to PLN 5,497, an increase of 15.5% y/y.

Deferred Payments (BNPL) Gaining Popularity

Buy Now, Pay Later (BNPL) services continue to expand as an important segment of the Polish financial market. In January 2025, a total of 5.37 million BNPL transactions were recorded, reflecting a 21% increase y/y, with a total transaction value of PLN 931 million, up 25% y/y.

Loan Repayment and Default Trends

BIK data indicates that special-purpose loans have the highest repayment reliability, with a default rate of just 1%, similar to installment loans offered by banks. Short-term cash loans with repayment periods of up to two months showed a 4% default rate, whereas longer-term cash loans exceeding 60 days had a significantly higher default rate of 10%, surpassing the levels observed in the bank lending sector.

The Non-Performing Loan (NPL) index, which tracks overdue liabilities, showed improvement in January 2025. The overall quality of cash loans improved, with the share of outstanding loans exceeding 90 days falling to 18.2%, a 6-percentage-point improvement y/y. Meanwhile, the default rate for special-purpose loans remained relatively low at 4.3%, increasing slightly by 0.2 percentage points y/y.

The data suggests that while the demand for loans continues to grow, borrowers are managing repayments more effectively, particularly in short-term lending. At the same time, the rising popularity of BNPL services highlights shifting consumer preferences in Poland’s financial market.

Source: ISBnews and Credit Information Bureau (BIK)

Number of indebted companies in Poland rises to 331,200 in 2024

The number of companies struggling with overdue payments in Poland increased by 12,300 over the past year, bringing the total to 331,200, according to data from BIG InfoMonitor and BIK. The rise in financially distressed businesses is particularly noticeable in the transport, shipping, and logistics (TSL) sector and waste management industry, both of which are facing increasing credit risk.

At the end of 2024, the total credit and non-credit arrears of companies that had been overdue for more than 30 days and amounted to at least PLN 500 exceeded PLN 43.8 billion. While the overall increase in arrears was slightly slower than the previous year, the number of financially troubled companies grew at a faster rate. From January to December 2024, company debts increased by PLN 1.95 billion (4.7%), compared to PLN 2.4 billion (6%) in 2023. However, the number of companies with financial difficulties rose by 4% in 2024, doubling the 2% increase recorded in the previous year.

Sectors with the Highest Debt Levels

The wholesale and retail trade sector continues to have the highest level of arrears, nearing PLN 9 billion. It is followed by manufacturing (PLN 6.9 billion), construction (PLN 5.6 billion), and transport and logistics (PLN 3.3 billion). Other industries with significant outstanding debts include professional, scientific, and technical activities (PLN 2.8 billion), real estate services, and the HoReCa sector, both of which have arrears exceeding PLN 2 billion.

Despite the overall rise in indebtedness, some sectors recorded improvements. Construction companies reduced their overdue payments by PLN 421 million (7%), while the manufacturing sector saw a PLN 391 million (5.4%) decrease. In mining, overdue debt fell by PLN 60.5 million (8%), while the agriculture sector recorded a slight improvement with a PLN 4.6 million (1%) reduction in arrears.

Increase in Financial Distress Across Sectors

Some industries saw a significant rise in outstanding debt. Educational institutions recorded a 32% increase, reaching nearly PLN 280 million, due to declining student enrollment and rising infrastructure costs. Energy, gas, and hot water supply companies also experienced a 31% increase, with total arrears reaching PLN 173.4 million.

Other key sectors with rising debt include scientific and technical activities (+PLN 304.4 million, 12.4%), TSL (+PLN 237 million, 8%), finance and insurance (+PLN 206 million, 23%), and HoReCa (+PLN 189 million, 10%).

Industries with the Highest Financial Risk

The TSL industry continues to have the highest percentage of financially distressed companies, with 9% of all registered transport companies facing serious financial difficulties. The mining sector, waste management, and water supply services also show high levels of financial instability, with 7.6% of companies in these industries experiencing payment issues. The catering and accommodation sector follows closely with 6% of businesses struggling with overdue debts.

Despite a slower increase in total arrears, the average overdue debt per company continues to rise, now standing at over PLN 132,000 per entrepreneur. The growing number of distressed businesses underscores the challenges in multiple industries, raising concerns about financial stability and the risk of insolvencies in Poland’s corporate sector.

Source: ISBnews, BIG InfoMonitor and BIK

Entrepreneur bankruptcies in Czech Republic rise by 21% in January

The number of bankruptcies among sole proprietors in the Czech Republic increased sharply in January, with 520 cases recorded, marking a 21% rise compared to December. Meanwhile, 480 new bankruptcy filings were submitted, a 3% decrease from the previous month. According to an analysis by CRIF – Czech Credit Bureau, the Moravian-Silesian Region continues to have the highest rate of bankruptcies relative to the number of active entrepreneurs.

January’s bankruptcy figures were 75 cases higher than the monthly average for 2024, signaling a significant increase in financial difficulties among business owners. Over the past 12 months, 5,398 bankruptcies were declared, reflecting a 7% increase compared to the previous year. In contrast, the number of new bankruptcy filings during the same period rose by 8%, reaching 5,870 cases.

The rise in bankruptcies follows a period of decline in previous years, but since mid-2024, the number of entrepreneurs has started to grow again. While credit activity has resumed, entrepreneurs’ savings remain three times higher than their debt, indicating cautious financial behavior.

Regional Disparities in Bankruptcy Rates

The highest number of bankruptcies in January was recorded in Prague and the Moravian-Silesian Region, both reporting 71 cases. In contrast, no bankruptcies were recorded in the Karlovy Vary Region. Year-on-year, bankruptcies increased most rapidly in the Olomouc and Central Bohemia regions, while the Karlovy Vary and Ústí regions—historically among the most vulnerable areas for entrepreneurs—saw a decline.

Over the past 12 months, the Moravian-Silesian Region had the highest number of bankruptcies per 10,000 active entrepreneurs at 85, followed by the Ústí Region (80) and Karlovy Vary Region (79). The lowest rates were recorded in Prague (35), Zlín Region, and Central Bohemia (42 each).

Sectors Most Affected by Bankruptcies

The construction sector was hit hardest in January, with 121 bankruptcies, followed by trade (105 cases) and manufacturing (55 cases). Over the past 12 months, the transport and storage sector recorded the highest bankruptcy rate at 73 bankruptcies per 10,000 businesses, followed by construction (50 cases) and accommodation and catering (36 cases). The lowest rates were observed in health and social care (2 cases), energy production and distribution (3 cases), and education (7 cases).

Year-on-year, the cultural and entertainment sector, along with transport, storage, and professional scientific activities, saw the fastest increases in bankruptcies.

Seasonal Trends in Bankruptcies

Historically, January has recorded the second-lowest share of bankruptcies, accounting for 8.3% of annual cases between 2013 and 2024. In contrast, May typically sees the highest number of bankruptcies, averaging 8.8% of annual cases.

The latest data reflects ongoing financial struggles for small business owners in the Czech Republic, with regional and sectoral variations indicating broader economic pressures in certain industries.

Source: CRIF

ZPPHiU highlights lack of transparency in shopping centre cost allocations

The Association of Polish Employers of Trade and Services (ZPPHiU) has raised concerns about the lack of transparency in how shared costs are allocated in shopping centres across Poland. According to the organization, landlords are significantly increasing service charges—often beyond inflation rates—without clearly detailing the breakdown of costs or justifying the increases.

ZPPHiU argues that this issue is systemic, with shopping centre owners passing financial risks onto tenants instead of assuming responsibility for proper budgeting. This results in uncontrolled cost increases, forcing tenants to scrutinize expenses that should be transparently managed by landlords. Despite commitments to transparency outlined in the PRCH Code of Good Practice, many shopping centres allegedly prevent tenants from conducting independent audits of shared costs.

Disputes Over Audit Rights and Rising Fees

A case highlighted by ZPPHiU involved Galeria Sfera in Bielsko-Biała, where tenants were reportedly denied access to audit shared costs, despite the PRCH Code explicitly granting them this right. In response, ZPPHiU and the Union of Polish Building Entrepreneurs and Landlords formally appealed to the Polish Council of Shopping Centres (PRCH) on 19 November 2024, requesting adherence to established standards. However, no response was received.

“The Code of Good Practice explicitly states that tenants have the right to audit costs incurred by landlords for property maintenance. A refusal to grant this right not only breaches lease agreements but also contradicts the principles outlined by PRCH itself,” said Zofia Morbiato, CEO of ZPPHiU.

According to Morbiato, the issue extends beyond Galeria Sfera. Several other shopping centres have allegedly obstructed or outright denied audits, raising concerns about accounting accuracy and cost justification. The rising service charge advance payments have led to financial strain for tenants, who argue that cost increases should be clearly explained and justified.

Challenges with Green Lease Agreements and Modernization Costs

Another point of contention is the “green annexes” included in lease agreements, which allow landlords to impose additional environmental compliance costs on tenants. ZPPHiU claims that these clauses often lead to unnecessary expenses, such as the mandated replacement of flooring, storefronts, and installations—despite no tangible benefit to customers or sustainability goals.

Modernization of common areas is another area where tenants feel excluded. Landlords frequently make upgrades without consulting tenants and then incorporate the costs into service charges. Similarly, the management of parking fees has become an issue, with tenants expected to fund parking operations through service fees while shopping centres reduce free parking time and generate additional revenue that is not factored into shared costs.

Ongoing Tenant Concerns and Proposed Solutions

ZPPHiU maintains that landlords must take full responsibility for investments required by aging infrastructure and evolving EU regulations. Under the law, property owners are obligated to ensure compliance and safety standards, yet many are shifting these financial burdens onto tenants.

These concerns were a key focus of the 3rd Congress of ZPPHiU and PSNPH, where industry leaders discussed strategies to reduce tenant risks and promote fair cost-sharing in lease agreements. A particular emphasis was placed on green lease agreements, contract negotiations, and comprehensive cost control measures.

The Congress also presented new research on shopping centre customer expectations and introduced a tool designed to assess customer experience at both the shopping centre and individual store levels.

Despite repeated calls for change, tenants continue to push for greater transparency, fairer cost distribution, and adherence to industry best practices, urging PRCH and landlords to uphold their commitments to ethical business standards.

Source: ZPPHiU

EU Leaders Affirm United Support for Ukraine and Strengthening Defence Capabilities

fletcher@cijeurope.com
26 February 2025
Other

The European Union remains firmly united in its support for Ukraine, as emphasized during a meeting between Polish Prime Minister Donald Tusk and European Council President António Costa. Their discussions, held in preparation for the extraordinary European Council meeting on 6 March, focused on continued assistance to Ukraine and the need to strengthen Europe’s defence capabilities.

The EU reaffirmed its commitment to Ukraine with the recent adoption of a new package of sanctions against Russia, signaling continued pressure on Moscow. Strengthening defence, including securing the EU’s eastern borders, is among the priorities of the upcoming Polish Presidency of the Council of the EU, and leaders underscored the importance of a coordinated approach among Member States.

Following the meeting, Prime Minister Tusk emphasized the significance of Ukraine in Europe’s security framework:

“The next European Council will focus on helping Ukraine and strengthening our security. After everything that is happening in the world, European unity around Ukrainian affairs is an absolute necessity.”

European Security and Defence Cooperation

As part of a broader effort to ensure stability, EU leaders are preparing for potential peace negotiations, aiming for a lasting and just resolution to the conflict. Security guarantees for Ukraine and holding Russia accountable are central to these discussions.

The Polish Presidency’s motto, “Security, Europe!”, reflects the growing focus on defence and stability. President Costa highlighted this during the talks, stating:

“Our priority is to ensure collective defence and security across Europe.”

Regardless of future diplomatic efforts, Europe must bolster its defence capabilities. The European Commission has introduced proposals to enhance military readiness, a key topic for the special European Council session on 6 March.

“The European Commission is presenting a package of proposals to strengthen defence capabilities in Europe. This is why we are convening a special European Council meeting next week,” Costa announced.

Poland’s Role in European Defence Strategy

Poland has been recognized as a model for responsible defence spending, with other EU nations increasingly considering the use of frozen Russian assets to finance security initiatives. Prime Minister Tusk pointed out the shift in discussions, noting:

“The fact that some European countries are now openly talking about using frozen Russian assets shows that security is becoming a real EU priority.”

Ensuring the protection of the EU’s eastern border is also central to Poland’s approach. Both Tusk and Costa agreed that securing this region is vital for European stability. Poland will continue advocating for projects such as the East Shield, a defence initiative aimed at strengthening the eastern flank of the EU.

“Russia is not just a threat to Ukraine but to European security as a whole, particularly for Poland, Romania, the Baltic States, and the entire eastern flank of the EU,” said Costa.

Upcoming Diplomatic and Defence Meetings

Before the extraordinary European Council meeting, a group of European leaders will convene in London to discuss common defence plans. Additionally, a videoconference is scheduled for tomorrow with EU heads of state, where French President Emmanuel Macron will provide an update on his visit to the United States and his meeting with President Donald Trump.

With discussions intensifying across European capitals, Ukraine remains at the center of EU security strategy, reinforcing the bloc’s commitment to stability, defence cooperation, and long-term support for Kyiv.

Photo: Prime Minister Donald Tusk and President of the European Council António Costa

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