Estimated time of reading: ~ 3 minutes
The European Parliament elections, scheduled for June 6-9, 2024, hold immense significance as citizens across the European Union exercise their democratic rights to shape the future of the EU. These elections play a pivotal role in determining the direction of policies, legislation, and overall governance within the EU, shaped by the Members of the European Parliament (MEPs). The outcomes impact the economy and finances of the European Union.
MEPs play a central role in approving the EU budget, scrutinizing expenditure, and electing the President of the European Commission. The upcoming elections take place amid significant political shifts and challenges, including the aftermath of the COVID-19 pandemic, economic recovery efforts, climate change concerns, and renewed efforts for EU energy independence. In a shift in focus from the dominance of climate change and decarbonization efforts, to post-pandemic economic recovery, President Ursula von der Leyen highlighted industrial policy, competitiveness, and addressing digital risks as main priorities during her State of the Union address. This shift is reflective of public concerns and the need to balance environmental goals with economic considerations.
Recent regional elections in Germany have highlighted citizen concerns about the potential economic burden of climate policies, with right-leaning political parties benefiting from this sentiment. While the green transition remains a priority, there is a call for a balanced approach, emphasizing financial support for facilitating the transition rather than introducing additional policies. The digital revolution continues to transform societies and economies, with data protection, privacy rights, and responsible artificial intelligence remaining high on the agenda. The economic implications of these technological advancements will require careful consideration and regulation.
The Organisation for Economic Co-operation and Development (OECD) has cautioned that the stronger-than-expected GDP growth experienced in 2023 is anticipated to decelerate. Projections show a moderation in growth to 2.7% in 2024, down from 2.9% in the current year. However, a subsequent rebound is anticipated, with growth expected to rise to 3% in 2025. This positive trajectory is attributed to the recovery of real income growth and a decrease in interest rates. Specifically addressing the Eurozone, the OECD foresees a deceleration in inflation to 2.9% next year, following a rate of 5.5% in the present year. The projection indicates a further reduction to 2.3% in 2025. Notably, the European Central Bank’s (ECB) target inflation rate of 2% is not anticipated to be realized for another two years. The outlook suggests a modest achievement of 2.1% only in the final three months of 2025.
Striking a balance between environmental goals and economic considerations, evaluating the impact of existing regulations, and addressing the challenges posed by the digital revolution will be key priorities for the EU’s economic future. As citizens exercise their democratic rights, the outcomes of these elections will undoubtedly have far-reaching consequences on the economic trajectory of the European Union.
Written by: Nenad Stekić