European Union

The awards ceremony for the 2024 Sakharov Prize for Freedom of Thought laureates, María Corina Machado and Edmundo González Urrutia, will be held on Tuesday 17 December.
Committee on Foreign Affairs
Committee on Development
Subcommittee on Human Rights

Source : © European Union, 2024 - EP

The awards ceremony for the 2024 Sakharov Prize for Freedom of Thought laureates, María Corina Machado and Edmundo González Urrutia, will be held on Tuesday 17 December.
Committee on Foreign Affairs
Committee on Development
Subcommittee on Human Rights

Source : © European Union, 2024 - EP

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Written by Alessandro D’Alfonso, Martin Höflmayr and Giulio Sabbati.

The current economic context is a story of contrasts: the labour market continues to exceed expectations, with record employment, while inflation is nearing the 2 % target; meanwhile, subdued growth momentum is fuelling concern over the sustainability of high public debt. Despite extremely challenging circumstances, the EU economy achieved an anticipated soft landing, not least thanks to fiscal support measures at national and EU level. However, factors weighing on economic growth, estimated at 1.5 % in 2025, include tight financing conditions, low consumer confidence and the impact of uncertainty and high energy costs on business. Cumulative growth since the pre-pandemic period has varied widely across EU countries, with countries reliant on (financial) services leading, followed by the eastern European economies, whereas Germany, Finland, and Estonia have stagnated with no notable growth. The new fiscal rules are expected to trigger a shift in fiscal policy, with a decline in the EU’s aggregate deficit below 3 % of gross domestic product (GDP) by 2026. Nevertheless, fiscal tightening is projected to be pro-cyclical in a number of countries. With the EU’s employment rate at a record high (75.8 % of people aged 20 to 64), labour markets remain strong and the employment gender gap has narrowed. A gradual easing of monetary policy is anticipated. In their final 2 years, Next Generation EU (NGEU) and its Recovery and Resilience Facility are expected to mitigate the impact of fiscal consolidation, providing support for public investment, if their implementation is not delayed.

Read this infographic on ‘Economic Outlook Quarterly: A story of contrasts‘ in the Think Tank pages of the European Parliament.

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