Public Sector Economics, Vol. 41 No. 1, 2017.
Conference paper
https://doi.org/10.3326/pse.41.1.2
EU challenges, investment in the EU and the role of the European Investment Group
Debora Revoltella
; European Investment Bank, Luxembourg, Luxembourg
Abstract
Since the financial crisis, Europe has made tremendous progress. Countries have adjusted macroeconomic policies and implemented structural reforms, while economic policy co-ordination has been strengthened. A modest economic recovery is underway, but uncertainty is high and productivity growth and competitiveness are still weak, affecting the medium-term growth outlook.
Following the recession triggered by the sovereign debt crisis, the recovery began in most EU member states in early 2013. It started as an export-driven upswing but has been increasingly supported by domestic demand, particularly consumption. Growth of domestic demand has been sustained by falling oil prices and overall inflation, as well as by a very accommodating monetary policy and the phasing-out of fiscal retrenchment.
Against this backdrop, and when compared with past recoveries, this rally is disappointing. It also appears vulnerable given the downside risks and limited policy space. While monetary policy is close to the limits of what it can achieve, consensus on a more active fiscal policy is still lacking.
Indeed, on the political front, Europe stands at something of a crossroads, facing growing social, economic and political challenges. Efforts are now focused on pragmatically advancing on key common priorities. The urgency and ambition with which this cooperation proceeds will be critical to success.
Keywords
EU challenges; investment in the EU
Hrčak ID:
178752
URI
Publication date:
15.3.2017.
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