Investment Report 2023/24: Chapter 1. Challenges in EU Investment: Navigating Shifting Macroeconomic Conditions

Not all EU countries' economies have been affected in the same way. Challenges such as high debt levels in Southern European countries and the loss of competitiveness in Central and Eastern Europe require urgent attention. This "asymmetric impact" highlights the need for governments to work together to plan and implement their spending and taxation decisions in a synchronized manner. Additionally, addressing the shortage of skilled labor and adapting policies for part-time and remote work is crucial for sustaining investment and navigating the green and digital transition.

The implications of the EU's macroeconomic challenges extend beyond its borders. The slowdown in global demand, influenced by factors like high energy and food prices, has impacted EU firms' competitive positions outside the EU. This has led to a notable decline in perceptions of competitiveness, comparable to levels seen during the global financial crisis. The report suggests that while global demand may normalize in 2024, the structural impact of high energy prices and reduced globalization could persist, affecting EU firms in the long term. Additionally, discussions around establishing a central fiscal capacity and increasing provision of EU public goods indicate a shift towards more coordinated economic responses within the EU, potentially influencing global economic governance and trade dynamics.