Preserving Europe's industrial base must be at the forefront of the next EU Cycle

After years of consecutive crises, European businesses find themselves at a structural disadvantage vis-à-vis global competitors as a consequence of high energy prices, a mounting regulatory burden, and limited financing opportunities. While the global economy grew by 3.2% in 2023, the EU economy stagnated in real terms in the same year, as 10 member states saw their economy contract. The strong performance of the EU’s services sector contrasts with industry, as industrial production across the EU declined by 1.8% in 2023 and the vast majority of member states saw their industrial output decline by up to 12.1% compared to the previous year. In 2024, our latest Spring Economic Outlook expects the EU economy to grow by 1.2% in 2024, compared with an expected 5% growth in China and 2.6% in the US. It’s crucial that the EU’s industrial base is maintained for our economic security and prosperity. Policymakers must now urgently address the structural challenges facing European industry vis-à-vis global competitors, using the recommendations of the Letta and the forthcoming Draghi report to develop a long-term European growth strategy. To read our latest Economic Outlook, click here.