Policymakers have held talks at the annual Brussels Economic Forum to discuss the bloc's biggest economic questions. But what is the EU doing in practice? Euronews takes a look.
Debt, inflation, wages, and jobs... We know that it's tricky to understand how the economy works. That's why every episode of Real Economy brings you a one-minute Crash Course to bring you quickly up to speed on the big picture. We explain the headline concepts and lay out how public policy is reacting to changing current affairs and economic trends.
During this year's Brussels Economic Forum (BEF), Europe's industry leaders and high-level decision-makers flocked to the Belgian capital to assess and discuss the EU's most pressing economic challenges.
Attendees at the European Commission's flagship economic event gave their thoughts on the bloc's current economic landscape, Europe's progress towards a green & digital transition, social inequalities and the race to secure critical raw materials.
But what is Europe actually doing about all this? In this latest Crash Course, we take a look at the steps the EU is taking to answer our biggest questions.
What is Europe's economic forecast?
In its latest economic forecast published in February this year, the European Commission lifted the outlook for growth and marginally lowered inflation projections, concluding that the EU economy is set to narrowly escape the recession expected last autumn.
GDP is projected to expand by 0.8% in 2023 and 1.6% in 2024. In the euro area, growth is forecast to increase by 0.9% this year and 1.5% next year.
Furthermore, headline inflation is predicted to fall from 9.2% in 2022 to 6.4% in 2023 and 2.8% in 2024 in the EU. In the euro area, it is projected to decelerate from 8.4% in 2022 to 5.6% in 2023 and to 2.5% in 2024.
A drop in gas consumption coupled with a greater diversification of supply sources has seen the European gas benchmark price drop below its pre-war level.
And despite shockwaves caused by the energy crisis and the subsequent record-high inflation, the slowdown in the third quarter of 2022 was milder than expected.
In the fourth quarter, the EU economy achieved a broad stagnation, instead of the 0.5% contraction expected last autumn.
Labour markets have also performed strongly, with the unemployment rate in the EU reaching an all-time low of 6.0% in February 2023.
Is Europe investing in skills for the future?
As the EU seeks to ensure the smooth running of the twin green and digital transition, and in the context of the European Year of Skills, the European Commission in April adopted two proposals to help Member states on their path towards a systemic digital transition.
The first proposal for a “Council Recommendation on the key enabling factors for successful digital education and training” aims to bridge the digital divide, which has widened in light of the COVID-19 crisis, by pushing for high-quality, inclusive and accessible digital education and training.
The second proposal for a “Council Recommendation on improving the provision of digital skills in education and training” looks to improve digital skills and teaching in the EU.
It hopes to address the varying levels of digital skills within different segments of the EU population by inviting Member states to set out incremental objectives and focus specifically on helping ‘priority or hard-to-reach groups.'
Member states can do this by ensuring the provision of high-quality informatics in schools, developing digital skills for adults and addressing shortages in information technology professions.
How is Europe looking to address its social inequalities?
In February, the EU's statistical office, Eurostat, reported that the unemployment rate at only 6% in the European Union.
Eurostat also found that, in 2021, an estimated 95.4 million people - or over one in five - in the EU were at risk of poverty or social exclusion.
As Europeans bear the burden of the cost-of-living and energy crises, the Commission in April presented legislative proposals to implement what it describes as the "most comprehensive reform of the EU's economic governance rules since the aftermath of the economic and financial crisis."
The proposals aim to "strengthen public debt sustainability, and "promote sustainable and inclusive growth in all Member States through reforms and investment."
The Commission hopes the new rules will help control public debt levels, and better prepare the EU for future challenges by supporting Member States with their transition towards a green, digital, inclusive and resilient economy.
The reform will make economic governance simpler by :
- improving national ownership by providing Member States with more freedom to set their own fiscal adjustment paths
- placing a greater emphasis on the single medium-term plan to create a coherent and streamlined process
- strengthening enforcement to ensure Member States deliver on the commitments they undertake in their fiscal plans.
What is Europe doing to reduce its reliance on imported raw materials?
The European Commission wants to address the EU's dependency on imported critical raw materials by diversifying and securing a domestic and sustainable supply of critical raw materials which are key to Europe's net zero and digital industries, as well as its aerospace and defence sectors.
While demand for critical raw materials is expected to increase drastically, Europe heavily relies on imports, often from third-country suppliers which have a monopoly on the market.
This was highlighted by shortages in the aftermath of the Covid-19 pandemic and the energy crisis following Russia's invasion of Ukraine.
In March, the Commission proposed a comprehensive set of actions in the Critical Raw Materials Act, which aims to equip the EU with the tools to ensure the EU has access to a secure and sustainable supply of critical raw materials, mainly through:
- setting clear priorities for action: Identifying technologies that are key to Europe's green and digital ambitions and for defence and space applications
- creating secure and resilient EU critical raw materials supply chains
- ensuring that the EU can mitigate supply risks by monitoring supply chains and coordinating stocks among Member States
- investing in research, innovation and skills, such as the Raw Materials Academy to promote skills relevant to the workforce in critical raw materials supply chains
- protecting the environment by improving the sustainability of critical raw materials
- diversifying imports of critical raw materials
- stepping up trade actions, including setting up a Critical Raw Materials Club among like-minded countries willing to strengthen global supply chains
- further developing strategic partnerships
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