Opinion of the European Economic and Social Committee – Additional considerations on the Annual Sustainable Growth Survey 2024 (own-initiative opinion) – ECO/649
Date: 2024-10-23
Institutions: European Economic and Social Committee
Subjects: EU growth strategy, European Semester, competitiveness, digital single market, digital transformation, economic recovery, economic stabilisation, green economy, macroeconomics, sustainable development








C_202500104EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/104


10.1.2025






Opinion of the European Economic and Social Committee

Additional considerations on the Annual Sustainable Growth Survey 2024


(own-initiative opinion)


ECO/649

(C/2025/104)


Rapporteur: 
Elena-Alexandra CALISTRU






Plenary Assembly decision


21.3.2024




Section responsible


Economic and Monetary Union and Economic and Social Cohesion




Adopted in section


11.10.2024




Adopted at plenary session


23.10.2024




Plenary session No


591




Outcome of vote
(for/against/abstentions)


242/0/7




1.   Conclusions and recommendations









1.1.


The EU must prioritise a balanced approach to sustainable competitiveness. The EESC calls for the swift implementation of the proposed Clean Industrial Deal and European Competitiveness Fund, ensuring that these initiatives support both economic growth and environmental objectives.












1.2.


Member States and EU institutions should accelerate the implementation of the Recovery and Resilience Facility (RRF). The EESC recommends considering an extension of the RRF deadline and enhancing technical support to ensure full absorption of funds and maximise their impact on sustainable growth.












1.3.


The EU should pursue a nuanced fiscal policy that promotes debt sustainability while supporting essential investments. The EESC calls for a careful balance between deficit reduction and maintaining investment capacity, particularly in areas critical for long-term growth such as the green and digital transitions.












1.4.


The EESC urges the development of a comprehensive strategy to address labour market challenges, including skills mismatches and demographic shifts. This should include targeted policies to engage inactive populations and enhance education systems to better prepare individuals for future job markets.












1.5.


EU institutions should prioritise the completion of the Capital Markets Union, including the proposed European Savings and Investments Union. The EESC recommends a stakeholder-inclusive approach to ensure that these initiatives benefit businesses of all sizes and contribute to overall economic resilience.












1.6.


The EU must strengthen its strategic autonomy in key sectors while maintaining open and fair trade relations. The EESC calls for continued investment in clean technologies and critical raw materials, balanced with policies that support global cooperation and avoid harmful protectionism.












1.7.


EU policymakers should ensure that the pursuit of competitiveness does not come at the expense of social inclusion and environmental protection. The EESC recommends integrating strong social protection and environmental safeguards into all major economic initiatives.












1.8.


The renewal of the European Parliament and the new European Commission must come with a renewed and concrete effort to involve organised civil society and social partners in shaping and implementing sustainable growth strategies. The EESC recommends boosting the energy put into the European Semester as a platform that can strengthen the legitimacy and effectiveness of EU growth strategies, while ensuring they remain inclusive and responsive to citizens’ needs even at times when there isn’t an election.




2.   Background to the opinion









2.1.


The 2024 Annual Sustainable Growth Survey (ASGS), which is a key component of the European Semester, outlines the economic and employment policy priorities for the EU for the next 12 months. The Commission’s Communication on the ASGS 2024 focuses on three key areas: short-term energy shock mitigation, medium-term sustainable growth and resilience in the EU, and alignment with long-term EU objectives. The structured approach presented in the ASGS 2024 revolves around the four dimensions of competitive sustainability and is aligned with the United Nations Sustainable Development Goals (SDGs).












2.2.


The ASGS 2024 continues to guide the Member States in implementing their national Recovery and Resilience Plans (RRPs), with the European Semester playing a central role, particularly in the ongoing implementation of the revised European economic governance framework.












2.3.


The EU economy staged a comeback at the start of the year, with a growth rate of 0,3 % in the first quarter of 2024, exceeding expectations but still below the estimated potential. GDP growth in 2024 is projected to reach 1,0 % in the EU and 0,8 % in the euro area, and to rise to 1,6 % in the EU and 1,4 % in the euro area in 2025. At the same time, one of the most important investment and reform sources, the Recovery and Resilience Facility, has a rather slow absorption rate (40,95 % as of 20 September 2024).












2.4.


Inflation is expected to continue declining, falling from 6,4 % in 2023 to 2,7 % in 2024 and 2,2 % in 2025 in the EU, and from 5,4 % in 2023 to 2,5 % in 2024 and 2,1 % in 2025 in the euro area. Economic activity stagnated in 2023, with private consumption growing by only 0,4 % and investment growing by 1,5 %, largely driven by carry-over from 2022. The unemployment rate reached a record low of 6,0 % in March 2024, and the EU economy is expected to generate another 2,5 million jobs over the forecast horizon. Global growth (excluding the EU) is set to remain at close to 3,5 % over the forecast horizon, with a strong rebound in China’s economic activity lifting its near-term outlook. The EU government deficit increased marginally from 3,4 % to 3,5 % of GDP in 2023 but is projected to decline to 3,0 % in 2024 and 2,9 % in 2025.












2.5.


Risks to the outlook include geopolitical tensions, the vulnerability of global trade and energy markets, the persistence of inflation in the US, and potential delays in further interest rate cuts by EU Central Banks. The end of the Stability and Growth Pact’s general escape clause at the close of 2023 marks a significant post-pandemic economic shift, the main aspect of which is the change of sign of the fiscal policy that will pass from expansive to restrictive in 2024. In this new context, the European Commission has launched excessive deficit procedures against seven Member States.




3.   General comments









3.1.


The EESC notes that while recent economic indicators show some improvement, the overall macroeconomic outlook presents significant risks that warrant careful monitoring. Despite the ECB’s recent interest rate cut, the EESC emphasises that monetary policy must remain vigilant to ensure inflation aims at the 2 % target without becoming ‘stuck’ at a higher level. The Committee is particularly concerned about the potential impact of tighter financing conditions and erosion of purchasing power on demand and growth prospects. Furthermore, the EESC highlights the need to address persistent economic challenges, such as stagnant economic activity and the marginal increase in government deficits. Given these complex economic dynamics, the EESC strongly advocates for a flexible and responsive policy approach. This approach should be capable of adapting quickly to changing economic conditions while balancing the goals of fiscal sustainability, social cohesion and long-term sustainable economic growth.












3.2.


The EESC highlights the ‘competitiveness crisis’ facing Europe, as outlined in the ASGS 2024, with a widening productivity gap compared to the United States. To address this, the EESC recommends increasing public and private investment, particularly in green and digital technologies, and to carry out reforms to strengthen the labour market. The Letta report emphasises that establishing a robust connection between the fair green and digital transition and financial integration within the single market is crucial for sustainable growth. Furthermore, the Draghi report calls for a fundamental re-thinking of EU growth and competitiveness to face existential challenges for the future of Europe, based on a long and solid list of concrete and urgent proposals, which require massive private and public investment of up to 4,7 % of EU GDP.












3.3.


The EESC notes the recent proposals by Commission President Ursula von der Leyen for a major boost in competitiveness, including a Clean Industrial Deal and a European Competitiveness Fund. These initiatives aim to deepen the single market, reduce bureaucracy, support SMEs and channel investment into strategic sectors such as clean technologies and energy-intensive industries. The EESC supports these efforts to enhance Europe’s competitive position while maintaining a focus on sustainability and social inclusion.












3.4.


The EESC stresses the importance of deepening the integration of the single market, as emphasised in the ASGS 2024 and the Letta report (1). This includes particularly reflecting on the need to focus more on services, data, defence, and energy infrastructure. The EESC emphasises the importance of investing in European public goods, such as research and development, digital infrastructure, and green technologies, to enhance the EU’s global competitiveness and address common challenges. However, the EESC also stresses the need for a balanced approach to EU-level governance, ensuring that measures such as joint procurement, harmonised subsidy systems, and common debt for public goods are implemented in a way that considers the varying needs and concerns of different stakeholders. The EESC calls for inclusive dialogue and consultation processes to ensure that the deepening of the single market benefits all members of society and contributes to sustainable and equitable growth.












3.5.


In line with the ASGS 2024, the EESC emphasises the importance of the EU’s Green Deal and digital transition policies for long-term sustainable growth. To overcome the challenges these initiatives face, including inadequate investment, high energy prices and regulatory complexities, the EESC recommends streamlining administrative processes, reducing regulatory burdens, and providing clearer, long-term policy frameworks, as well as expanding ‘own resources’. Integrating sustainability principles and circular economy principles within the single market is essential for driving economic growth and environmental sustainability. The EESC underscores the need for Europe to acknowledge its gaps in technology adoption and innovation compared to global competitors, particularly in areas critical to the green and digital transitions. The Committee expresses its concern that the latest decisions of the European Council, such as the freezing of the Sovereignty Fund of the Green Deal Industrial Plan or the mid-term review of the MFF 2021-2027, do not take into account the serious investment gap to achieve the targets set for green and digital just transitions.












3.6.


The EESC highlights the need to address labour and skills shortages, particularly in healthcare, STEM, and green occupations, to ensure sustainable growth, as noted in the ASGS 2024. The EESC recommends significant investment in education and skills development, policies to increase labour market participation and continuous training, and coordinated European approaches to social investments and reforms. Equally important is guaranteeing strong support for collective bargaining and social dialogue such as tools to ensure fair wages, job security and improved working conditions, aiming towards the EU Minimum Wage Directive targets. The EESC emphasises that education should go beyond mere skills development, focusing on inclusive and integrative teaching methods that prepare people for the complex challenges of the future job market. The Letta report also underscores the importance of supporting vulnerable regions to retain and attract a working-age population, addressing the brain drain phenomenon.












3.7.


The EESC recognises that migration is essential for addressing demographic decline and labour shortages, in line with the ASGS 2024. The EESC recommends balancing the need for immigration with measures to ensure social integration and protect workers’ rights. The EESC has consistently emphasised the importance of developing comprehensive and humane migration policies that benefit both the host countries and migrants, while addressing concerns about social cohesion and economic impact (2).












3.8.


The EESC expresses deep concern regarding the slow pace of RRF implementation across the Member States, despite the Spring 2024 Economic Forecast suggesting a return to growth in 2024. The EESC emphasises that the success of the RRF is crucial to supporting the EU’s recovery and long-term resilience, particularly in the context of a challenging economic environment characterised by recession risks and tightening credit conditions. To address these challenges, the EESC calls for a multi-faceted approach to accelerating RRF implementation. This includes:






—


Enhancing technical assistance and capacity-building support for Member States, particularly those facing administrative or absorptive capacity constraints, to ensure the timely and effective implementation of RRF projects.










—


Promoting the exchange of best practices and fostering peer-to-peer learning among Member States to identify and replicate successful implementation strategies, while also addressing common challenges and bottlenecks.










—


Encouraging Member States to prioritise high-impact projects that can deliver tangible results and contribute to the RRF’s objectives of supporting the green and digital transitions, as well as promoting social and territorial cohesion.
















3.9.


Furthermore, the EESC stresses the importance of ensuring transparency, accountability, and inclusive stakeholder engagement throughout the RRF implementation process. This involves:






—


Strengthening monitoring and reporting mechanisms to track progress, identify implementation gaps, and enable timely corrective actions.










—


Promoting meaningful and continuous involvement of the social partners, civil society organisations, and local and regional authorities in the design, implementation, and evaluation of RRF projects to ensure that they respond to the needs and priorities of communities and stakeholders.
















3.10.


The EESC calls for consideration of extending the RRF deadline to ensure proper implementation and absorption of funds, given the current slow pace of progress. The EESC emphasises that the success of the RRF is vital for supporting the EU’s recovery, fostering long-term resilience, and promoting sustainable and inclusive growth. Concerted efforts by the European Commission, the Member States, and all relevant stakeholders are necessary to overcome implementation challenges, optimise the absorption of RRF funds, and deliver tangible results for European citizens and businesses.












3.11.


The EESC echoes the sentiment expressed by the Eurogroup president that the success of NextGenerationEU is crucial for preserving and increasing public investment and putting our economies on a stronger, more sustainable and inclusive growth path. Any discussions on future common borrowing must be predicated on the successful implementation of the RRF.












3.12.


The EU labour market continues to show a strong performance despite slower economic growth. According to the Spring 2024 Economic Forecast, the employment rate in the EU reached a record high of 75,5 % in the last quarter of 2023, while the unemployment rate stood at a record low of 6,0 % in March 2024. However, regional disparities persist, with some Member States still experiencing high unemployment rates. The EESC notes that significant labour and skills shortages, particularly in healthcare, STEM, and green occupations, are a major bottleneck for sustainable growth.












3.13.


Over 20 % of the working-age population is inactive, including 8 million young people not in employment, education or training (NEETs). The EESC calls for a comprehensive analysis of this inactive population, exploring systemic barriers to employment and developing targeted strategies to engage this untapped human capital. Despite the positive developments in the labour market, the EESC emphasises the need for policies to increase labour market participation, enhance skills, and ensure equal opportunities for all.












3.14.


As the EU transitions away from the general escape clause under the Stability and Growth Pact towards a post-pandemic economic landscape, the EESC stresses the importance of learning from the pandemic to avoid a pendulum swing between fiscal extremes. The Spring 2024 Economic Forecast projects the EU fiscal stance to be contractionary in 2024. In 2025, its sign will depend, for many Member States, on the contents of the national fiscal and structural plans to be submitted by their governments in September and approved by the Commission and the Council before the end of the year. The EESC calls for a flexible and responsive fiscal policy, coordinated with monetary policy, inflation control and fiscal sustainability, without compromising essential investments and long-term growth, which remains crucial to ensure a resilient and adaptable fiscal framework.












3.15.


The EESC recognises the complex budgetary environment facing the EU. With borrowing costs rising, government spending increasing and budget deficits averaging 3,6 % of GDP in the euro area, the EU faces a delicate balance between reducing deficits, rebuilding financial safety nets and meeting substantial investment demands for green and digital transitions, defence and addressing demographic challenges. The EESC emphasises the need for a nuanced fiscal approach that promotes debt sustainability while supporting essential investments for long-term growth and competitiveness.












3.16.


The EESC warns against the risks of fiscal tightening and potential austerity measures, emphasising the need for sustained investment in key areas to support long-term growth and competitiveness. The lessons learned from policies in the wake of the 2007-2008 financial crisis and the pandemic underscore the need for a nuanced approach to fiscal policy that considers the varied economic realities across Member States and integrates stakeholder input.












3.17.


The EESC notes that the outcomes of the recent EU elections have resulted in a more polarised European Parliament. This shift presents both challenges and opportunities for advancing sustainable growth. The EESC recommends that the European Commission and the Member States actively engage more intensely across all layers of society to ensure that key initiatives, such as the Green Deal and digital transition, receive maximum support. It is essential to foster dialogue and build consensus around shared goals to navigate the new political landscape effectively.












3.18.


The EESC emphasises that the new composition of the European Parliament must be able to boost the legislative agenda, particularly concerning migration and environmental policies. The EESC advises maintaining a balanced approach that addresses the legitimate concerns of all stakeholders while upholding the EU’s commitments to sustainability and social inclusion, but also respect for rule of law and democratic principles. Strengthening the role of civil society and ensuring transparent and inclusive policy-making processes will be crucial in maintaining public trust and promoting cohesive and effective governance, promoting SDG and achieving sustainable growth.












3.19.


The EESC emphasises the growing importance of the EU’s strategic autonomy in the context of the ASGS 2024 and the pursuit of sustainable growth. The EESC stresses that achieving strategic autonomy is closely linked to the EU’s ability to promote sustainable growth, as investing in green technologies and digital capabilities can enhance productivity, create jobs, and drive long-term economic growth. The EESC underscores the critical importance of ensuring strategic autonomy in net-zero industries for Europe’s future competitiveness and sustainability. However, the EESC also emphasises the need for a balanced approach that takes into account the interests of all stakeholders and carefully considers the implications of protectionist measures, recognising both the potential benefits and risks to global trade and cooperation.












3.20.


The EESC notes the Commission President’s proposal for a European Savings and Investments Union as part of efforts to complete the Capital Markets Union. While recognising the potential of such initiatives to mobilise private financing and support European start-ups, the EESC emphasises the need for careful consideration of the implementation challenges and potential impacts on different stakeholders.






Brussels, 23 October 2024.


The President


of the European Economic and Social Committee

Oliver RÖPKE
               





(1)  
            
Much more than a market – Speed, Security, Solidarity: Empowering the Single Market to deliver a sustainable future and prosperity for all EU Citizens

, Enrico Letta report, April 2024.

(2)  
            SOC/794 – Factual and legislative analysis for an effective integration of third country nationals (TCNs) in the EU labour market
 (ongoing).


ELI: http://data.europa.eu/eli/C/2025/104/oj
ISSN 1977-091X (electronic edition)