Opinion of the European Economic and Social Committee – Additional considerations on the Euro area economic policy 2025 (own-initiative opinion)
Date: 2025-09-18
Institutions: European Economic and Social Committee
Subjects: competitiveness, economic growth, economic reform, euro area, financial stability, fiscal policy, investment promotion, macroeconomics, stability pact, sustainable development








C_202600009EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2026/9


16.1.2026






Opinion of the European Economic and Social Committee
Additional considerations on the Euro area economic policy 2025
(own-initiative opinion)
(C/2026/9)


Rapporteur: 
Juraj SIPKO






Advisor


Petr ZAHRADNÍK (to the rapporteur)




Plenary Assembly decision


27.3.2025




Legal basis


Rule 52(2) of the Rules of Procedure




Section responsible


Economic and Monetary Union and Economic and Social Cohesion




Adopted in section


5.9.2025




Adopted at plenary session


18.9.2025




Plenary session No


599




Outcome of vote
(for/against/abstentions)


157/0/0




1.   Conclusions and recommendations









1.1.


The EESC notes that the economic performance of the EU and euro area countries, particularly over the last five years, has not enabled the EU to maintain its strong position in the global economy, primarily in comparison with the US and Chinese economies. This trend is chiefly clear from the much slower growth rate and other quality-related aspects which have confirmed that the EU’s position in the global economy is gradually getting weaker, primarily in comparison with its biggest competitors (1).












1.2.


The EESC points out that in addition to the low growth rate, the economies of the EU and the euro area struggled with high inflation, which went hand in hand with relatively inadequate structural resilience to current security risks. It is fair to say that this period, which was shaped by external systemic shocks with a damaging impact on society, including a drop in living standards for people in the EU and the euro area, has come to an end and inflation is now back to a standard trajectory.












1.3.


The EESC acknowledges that unemployment has been exceptionally low recently, with real wage growth expected to gradually return to satisfactory levels. Paradoxically, the employment rate has been highest at a time when economic growth has been historically very low, a result of relatively low productivity among other things.












1.4.


The EESC is pleased that the EU and euro area economies have achieved a positive trade balance overall. This demonstrates that, as a whole, the EU economy is competitive, primarily in the goods sector, and that the EU has retained a relatively strong competitive advantage. In this context, the EESC strongly recommends that all necessary measures be taken in economic and trade policy with a view to keeping up this positive trade balance and current account surplus.












1.5.


The EESC is very much aware that it is neither possible nor easy to keep up a strong position in international trade during a global trade war triggered by the US administration. In the current global economic, trade and investment situation, the international rules gradually rolled out over the last 80 years no longer apply. The EESC therefore urges the competent EU institutions to take urgent steps to prevent any further weakening of the EU’s position in the global economy.












1.6.


The EESC points out that kickstarting the EU and euro area economies will require targeted measures geared to boosting investment with appropriate benefits, yield and return. Recently, the European Commission adopted a raft of documents identifying strategically important industries (2), which define the position of individual regions on the global economic map. The EESC therefore recommends focusing on these industries and creating the administrative and financial conditions for strong investment (3).












1.7.


The EESC supports the European Commission’s work on the Single Market Strategy, which focuses on creating the right conditions for innovation. This means that it is important to streamline and simplify common rules applying to the Single Market. The EESC considers that there is room here for more effective financing thanks to the savings and investments union (4) and a bigger, integrated capital market (5).












1.8.


With a view to keeping up and strengthening the position of the EU and the euro area in the global economy, a targeted policy must be adopted and rolled out which will support the entry of successful and ambitious companies into the global market. With this in mind, the EESC points out that sufficient scope must be ensured for highly skilled people in technological and innovative workplaces in Europe as well as in the ongoing Choose Europe initiative.












1.9.


The EESC is a strong supporter of clearly worded rules in legislation. It also points out that there is still a whole raft of obsolete rules which make life very difficult for people and entrepreneurs. The EESC therefore welcomes the ongoing efforts to simplify procedures. At the same time, the EESC underlines that social and environmental protection standards must not be undermined.












1.10.


The EESC believes that in order to ensure a favourable and lasting position for the EU and euro area in the global economy, it is crucial to support strengths and remove weaknesses when it comes to competitive advantages. What is more, a future strategy needs to tackle the less developed services sector which must be supported in accordance with the single market so that it is globally competitive. Likewise, the EESC underlines that a more integrated services sector can only be built if social dumping is effectively diminished and fair mobility is guaranteed.












1.11.


One of the key tasks for EU and euro area countries in the medium term is achieving sustainability of public finances – very difficult given low economic growth on the one hand and rising expenditure on defence and security, the transition, debt service and costs related to the ageing population, on the other. The EESC therefore welcomes efforts to create fiscal space by means of a targeted revision of the EU fiscal rules and by implementing an EU investment capacity to finance growth-enhancing investments that are of strategic interest for the Single Market. At the same time, the fiscal framework must ensure that fiscal buffers are built up in times of economic recovery.












1.12.


The EU and euro area economies are facing new challenges connected to unanticipated developments and the consequences of the global trade crisis. The EESC therefore recommends that the European Commission lose no time in signing bilateral trade agreements with all countries with the biggest external trade turnover. The Commission must also continue working to renew multilateralism and initiating urgent reforms in the World Trade Organization (WTO). Given the unpredictability of the current unprecedented developments in international trade, the EESC recommends that the European Commission be more proactive in tackling protectionist measures in cooperation with all relevant countries.












1.13.


The EESC recommends that all institutional and legislative measures needed to improve the operation of the single market be taken as a matter of urgency by the EU and national governments. Efforts must accordingly be made to establish a multifunctional framework for closing the gaps in research and development, investment, productivity and competitiveness compared to the EU’s main competitors. The EESC urges all competent institutions in the EU and Member States to roll out a coordinated approach intended to rebuild the position of the EU and the euro area in the global economy.




2.   General comments









2.1.


Until the end of 2024, the economies of the EU were relatively stable. Despite considerable uncertainty in the global economy, inflation has fallen and economies have continued to grow, albeit slowly.












2.2.


Following a relatively stable year in 2024, the introduction of protectionist measures by the US administration in January, April and August 2025 brought major risks to the economic development of EU and euro area countries. The hike in tariffs has led to considerable business and investment uncertainty and a high degree of instability in financial, capital and commodity markets.












2.3.


Despite some fairly major differences in the economic growth rate among Member States, the overall economic performance has not been particularly encouraging. This stems from a widening productivity gap with the EU’s main competitors in the global economy.












2.4.


Economic growth in the EU and euro area countries was relatively low in 2024. Year-on-year GDP growth was 0,7 % in the euro area, and 0,9 % in the EU as a whole. This somewhat low economic growth carried on until the end of 2024, with continued downward trends recorded.








GDP growth (6)



2024
(%)


Q4 2024 year-on-year
(%)


Q4 2024
quarter-on-quarter
(%)




EU


0.9


1.1


0.2




Euro area


0.7


0.9


0.1
















2.5.


Currently, household consumption is a potential driver of economic growth. However, this assumes that it will not be adversely affected by the repercussions of the ongoing global trade war, which is set to have an unpredictable impact on both the price of consumer goods and consumer confidence. Internal demand needs to be strengthened in the Single Market to support consumption as a central pillar of economic growth, by effectively implementing the Minimum Wage Directive, strengthening collective bargaining and boosting investment.












2.6.


Investment is currently quite low due to ongoing uncertainty about the future transition to the green economy, worsening geopolitical tensions and further fragmentation of the global economy. It is also influenced by the erosion of the fundamental principles of multilateralism, which has historically had a very positive impact on the global economy since the Second World War. Taken together, these negative trends strongly influence the development of the global economy, as well as that of the EU and the euro area.












2.7.


The continued roll-out of protectionist measures and uncertainty in international financial, capital and commodity markets are heightening the risks associated with the EU and euro area countries’ external trade stance. Although there has been a fair amount of uncertainty in the global economy over the last five years, the EU and euro area countries have recorded a positive trade balance and a current account surplus, unlike the US and the UK which are experiencing long-term deficits. This positive trade balance with the US might be one of the reasons driving its current foreign trade policy approach to EU countries. The EU and euro area countries will therefore need to be prepared for any unpredictable developments in the global economy.












2.8.


Positive trends in the EU and euro area economy over the last five years include relative resilience to high inflation, the introduction of measures to improve fiscal discipline and the ability to cope with the energy crisis.












2.9.


Inflation went down in the euro area countries in 2024. Unless there are any unpredictable external shocks to the global economy, the European Central Bank is expected gradually to roll out an expansionary monetary policy once it has reached its inflation target in mid-2025.












2.10.


The EESC underlines that more public investments are needed to meet the EU climate targets, close the innovation gap, and increase the productivity, competitiveness and resilience of the EU. In line with this, the EESC suggests a targeted revision of Regulation (EU) 2024/1263 (7) in order to prioritise growth-enhancing public investments that help to increase the productivity, competitiveness and resilience of the EU’s economies (8).












2.11.


Public finance trends are less encouraging at this point. This is linked to the ongoing high accumulation of public debt, increased expenditure on ageing populations and the transition, as well as defence and security expenditure. This may lead to a higher deficit and public debt.












2.12.


Positive trends in the EU and euro area countries include fairly low unemployment, although this varies from country to country. It should be pointed out here that unemployment is low even at a time of very weak economic growth. This is due to an unfavourable economic structure and particularly to continuing low productivity.












2.13.


Given current geopolitical tensions and the resulting further fragmentation of the global economy, new approaches to economic policy governance and implementation will be needed. It is therefore vital to push ahead with coordinated structural reforms geared towards resilience (financial, technological, operational and business model resilience) and moves to strengthen strategic autonomy, while respecting all of the EU’s fundamental values, particularly in the economic, trade and investment fields.












2.14.


Against the backdrop of current geo-economic trends, the EU and euro area countries will need to focus on current developments and to adopt and implement all necessary measures to carry out structural changes to increase investment, and boost productivity, competitiveness and overall resilience.












2.15.


Over the last two decades, the EU has gradually lost its prominent position in the global economy, especially compared to its main global competitors. There is therefore an urgent need to adopt and carry out all necessary measures to raise investment as a key factor in increasing productivity and improving the quality of the workforce, and to so do by allocating capital and savings more effectively. One potential solution is to remove long-standing barriers and structural weaknesses without delay.




3.   Specific recommendations









3.1.


The EESC is well aware that the current economic situation in the EU and euro area countries is being largely influenced by a major paradigm shift in the global economy’s economic environment. The main cause is the unpredictable tariffs and trade policy, which has both direct and indirect consequences.












3.2.


The EESC recommends that the European Commission refrain from escalating the trade war. The EU needs to make it quite clear that it can stand up to a forceful US trade policy as effectively as possible. The Commissioners might therefore look into the conditions under which some ITC and high-tech multinational corporations do business in the EU, including how they comply with their tax obligations.












3.3.


The EESC believes that EU diplomacy should now assume a major role on the international stage in light of ongoing efforts to undermine multilateralism. In this context, it should strongly advocate the maintenance of the post-war institutional set-up of cooperation based on international monetary stability (International Monetary Fund), financial assistance (World Bank – International Bank for Reconstruction and Development) and the process of liberalising and removing barriers to international trade (General Agreement on Tariffs and Trade and subsequently the World Trade Organization). The rise and success of these multilateral monetary, financial and trading institutions over almost 80 years is more in line with EU values than continued protectionism, economic uncertainty and an irrational approach to the current system of multilateralism.












3.4.


The EESC believes that, in the current uncertain and unpredictable environment, the EU should seek to build on its strengths as far as possible, while also addressing its economic weaknesses. In this context, the EESC notes that if the EU economy were structurally more competitive and more stable, it would be better prepared to face the unexpected shocks to come. One of the EU’s main priorities at present should be to pursue a consistent trade policy, which would therefore be less vulnerable to systemic external shocks.












3.5.


The EESC notes the need to harness the great comparative advantage of the EU single market. However, since it was set up in 1993, its potential has not been fully realised. It should be pointed out here that a number of emerging progressive sectors, particularly in services, face major barriers, making it difficult to exploit their comparative advantages for the EU’s benefit.












3.6.


The EESC recommends adopting and implementing the specific measures needed to deepen the Single Market in every sector and area, including services. However, these measures must not undermine social and environmental protection standards. Moreover, it is now more vital than ever to put in place an institutional and legislative framework to increase capital and allocate it effectively.












3.7.


The EESC recommends reforming EU funding, with due regard for changing circumstances. It therefore agrees that a mid-term review is needed of the EU’s 2021-2027 multiannual financial framework, including cohesion policy, to ensure that this policy, although mainly directed towards enhancing the EU’s competitiveness, does not lose sight of the values and objectives of the European social model. The EESC supports the build-up of investment capacity in strategic sectors of the EU economy and the development of critical technologies with a view to achieving greater economic resilience.












3.8.


The EESC also supports drawing up key sector-based strategies for critical industries and areas which could give the EU and euro area economies a competitive advantage in the future.












3.9.


In addition, the EESC endorses and supports the objectives set out in the Competitiveness Compass for the EU, specifically restoring competitiveness and ensuring sustainable and inclusive prosperity. This constitutes a strategic framework for coordinating action to support the competitiveness of the EU and the euro area by adopting a raft of urgent and necessary measures.












3.10.


The EESC considers that the extraordinary administrative and procedural complexity of the business environment is one of the main obstacles that have long held back the economic growth of the EU and the euro area. It therefore strongly recommends that administrative barriers to business be removed, starting with the top ten barriers highlighted in the Communication entitled The Single Market: our European home market in an uncertain world.












3.11.


The EESC praises the Commission’s efforts to remove one of the largest competitive barriers of recent times, namely high energy prices. Accordingly, it welcomes the publication of the Action Plan for Affordable Energy, and agrees with the content and proposals set out therein to limit price instability (volatility) at times of economic uncertainty. In this context, it proposes that steps be taken to ensure long-term predictability of energy prices.












3.12.


The EESC recommends that the EU emissions allowances and the ETS be overhauled in order to make them more stable and incentivise the implementation of an affordable green transition geared towards supporting competitiveness (9).












3.13.


In the EESC’s view, a strong focus on developing the circular economy is key for promoting competitiveness in the EU and the euro area and meeting the goals of the green transition. The EESC points to the relatively high dependence on rare earths and critical minerals that the EU has to import from abroad, especially from developing and newly emerging market economies. The circular economy creates the conditions for the EU and the euro area to enjoy greater strategic autonomy, while helping to ensure that a high proportion of modern manufacturing industries remain within the EU economy.




4.   Specific comments









4.1.


The EESC believes that the post-2027 EU funding model should be based to a greater extent on modern forms of financing, drawing mainly on financial instruments and their ability to raise private capital. At the same time, a solid level of public investment – at both European and national level – to finance public goods and infrastructure will continue to be crucial for inclusive and sustainable economic growth.












4.2.


The EESC very much appreciates that, influenced by the epoch-making reports by Mario Draghi and Enrico Letta, the Commission has committed to addressing the solvable and long-standing problem of red tape and procedural complexity (10).












4.3.


The traditional bank financing model is well-suited to established companies that have a proven track record and can provide collateral. However, it is less suitable for innovative and fast-growing companies that have little in the way of collateral. In many cases, these companies rely on alternative financing options for their expansion, particularly those focused on equity instruments. For start-ups, the venture capital market is an important component of financing.












4.4.


The EESC concurs with many civil society organisations and the ECB (11) that strong and robust sustainability legislation, including sustainability-reporting criteria, is necessary to facilitate the allocation of capital to the just transition. The sustainability reporting framework offers valuable metrics to inform investments in low-carbon industries, renewable energy projects, transition finance and other clean and green initiatives, thereby supporting both competitiveness and the achievement of the EU’s climate targets. Well designed sustainability legislation can promote and support innovation and strengthen competitiveness.












4.5.


The EESC agrees with the selection of strategically important sectors named in the Competitiveness Compass and calls on the Commission to draw up and roll out action plans more quickly. The EESC considers it vital to change the innovation environment, especially in fast-growing sectors and fields, while ensuring accessible and flexible funding for them to develop.












4.6.


In line with the Clean Industrial Deal, the EESC agrees that the ongoing decarbonisation process on the ground is the basis for the EU economy’s future competitiveness and prosperity. At the same time, the EESC points out that this document fails to set out a scenario for how current traditional industries can transition towards decarbonisation and the steps needed to do so. It therefore recommends that this be spelt out more clearly in light of future developments in these sectors and the business within them.












4.7.


The EESC underlines the need to put in place an institutional and legislative framework for the uniform and efficient functioning of the EU’s capital market, with a view to channelling savings into lucrative return investments. With this in mind, the new savings and investments union should introduce new investment products, put in place conditions for venture capital and ensure a smooth flow of investment across the EU, in conjunction with the recently reformed EU budget.












4.8.


The EESC rightly believes that raising productivity and competitiveness across the EU cannot be achieved without supporting upskilling and reskilling of the workforce. With a view to ensuring that the current level of qualifications matches growing demands in the labour market, the EESC welcomes the creation of a union of skills geared towards investment, adult education and lifelong learning.












4.9.


The EESC strongly supports efforts to remove barriers in the single market, in particular those preventing the completion of the Capital Markets Union and the Banking Union. A cross-cutting strategy should be adopted to improve the overall functioning of the single market across all sectors and fields. The single market’s governance framework should therefore be modernised, while removing remaining barriers within the EU and preventing new ones from emerging.












4.10.


The EESC emphasises that there is a need to create the right conditions for labour mobility, especially among highly-skilled talented individuals from the STEM sector (science, technology, engineering and mathematics). It would also be useful to put in place a practical system for recognising people’s education so that they can work anywhere in the EU.












4.11.


The EESC points to the need for mutual coordination of economic policies at both national and EU level. It therefore supports the proposal to introduce a Competitiveness Coordination Tool. Under this proposal, all Member States would work together to ensure that shared EU objectives are met, both at EU and national level. Identifying cross-border projects of European interest and carrying out the corresponding reforms and investments would also be a good idea.












4.12.


The EESC believes that, under the next multiannual financial framework, EU financial instruments with similar objectives should indeed be replaced by a European Competitiveness Fund, which would provide financial support to carry out measures under the Competitiveness Coordination Tool.












4.13.


The EESC emphasises that the Competitiveness Fund must not be implemented at the expense of the cohesion funds. The existing share of the EU budget earmarked for cohesion policy should not be reduced in the next MMF, but should instead be increased, as the EU’s cohesion policy, and particularly the European Social Fund, have proven vital for investing in people, creating jobs and reinforcing the European social market economy model.












4.14.


The EESC supports steps to modernise the financing of the clean transition that promote competitiveness, such as the new public support framework under the Clean Industrial Deal. This may make it possible to streamline and speed up the approval of public support measures for using renewable energy, decarbonising industry and providing enough production capacity for clean technologies, strengthening the Innovation Fund and setting up an Industrial Decarbonisation Bank.












4.15.


The EESC backs the efforts of the European Investment Bank (EIB) to create new financial tools under the Clean Industrial Deal. In this context, it also supports a series of measures to create electrification grids, as well as a joint Commission-EIB pilot programme on power purchase agreements to be made available to SMEs and energy-intensive industries.












4.16.


The EESC also points to the importance of the model created with InvestEU and welcomes the CleanTech Guarantee Facility under the Tech EU programme; it also recommends that the programme dedicated to enhancing the social dimension (the ‘social investment and skills window’) powered by InvestEU be maintained.






Brussels, 18 September 2025.


The President


of the European Economic and Social Committee

Oliver RÖPKE
               





(1)  A detailed description of the structural problems of the EU and euro area economies is set out in the EESC opinion Euro area economic policy 2025, which was adopted at the plenary session on 22 January 2025. OJ C, C/2025/1190, 21.3.2025, ELI: http://data.europa.eu/eli/C/2025/1190/oj.

(2)  Such as the STEP Platform, the Clean Industrial Deal, the Part B to the Draghi report and action plans for individual strategic industries.

(3)  Set out in the EU Startup and Scaleup Strategy and focusing on energy, based on renewables and including nuclear energy, artificial intelligence, quantum technologies, advanced semiconductors, medical and pharmaceutical technology, robotics and advanced materials, etc.

(4)  Opinion of the European Economic and Social Committee – Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions on a Savings and Investments Union: A Strategy to Foster Citizens’ Wealth and Economic Competitiveness in the EU (COM(2025) 124 final) (OJ C, C/2025/5155, 28.10.2025, ELI: http://data.europa.eu/eli/C/2025/5155/oj).

(5)  Opinion of the European Economic and Social Committee on the ‘Recommendation for a Council Recommendation on the economic policy of the euro area’ (COM(2023) 903 final) (
OJ C, C/2024/2104, 26.3.2024, ELI: http://data.europa.eu/eli/C/2024/2104/oj).

(6)  The data set out in the table is from Eurostat.

(7)  Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (OJ L, 2024/1263, 30.4.2024, ELI: http://data.europa.eu/eli/2024/1263/oj).

(8)  Opinion of the European Economic and Social Committee – Investments and reforms to boost European competitiveness and creating a Capital Markets Union (exploratory opinion requested by the European Parliament) (OJ C, C/2025/3193, 2.7.2025, ELI: http://data.europa.eu/eli/C/2025/3193/oj).

(9)  Opinion of the European Economic and Social Committee – Economic impact of the implementation of the EU Emissions Trading System (ETS) (own-initiative opinion) (OJ C, C/2025/5140, 28.10.2025, ELI: http://data.europa.eu/eli/C/2025/5140/oj).

(10)  See the 
Draghi report on EU Competitiveness

: and the 
Enrico Letta’s Report on the Future of the Single Market.

(11)  Opinion of the European Central Bank of 8 May 2025 on proposals for amendments to corporate sustainability reporting and due diligence requirements (CON/2025/10) (OJ C, C/2025/3667, 8.7.2025, ELI: http://data.europa.eu/eli/C/2025/3667/oj ).


ELI: http://data.europa.eu/eli/C/2026/9/oj
ISSN 1977-091X (electronic edition)