BusinessEurope publishes its Summer 2021 Economic Outlook. Among the key points are:
- EU exports have bounced back strongly with our larger trading partners recuperating faster than Europe. Consumer confidence has also recovered, suggesting households see better times ahead and expect to resume more normal spending patterns, setting the scene for a full economic recovery. We forecast 4.4% of economic growth for the EU27 for this year, followed by 4.6% next year;
- while the EU economy is picking up strongly, the path back towards a full recovery will be long and fraught with downside risks, including from inflationary pressures and the spread of new, more transmissible virus variants.
The economic disruptions caused by the pandemic will take some time to shake off, and negative long-term consequences can be mitigated by our policy responses.
It is therefore essential to avoid any premature unwinding of supportive measures to businesses and workers at this juncture. Going forward we must also bear in mind that:
- in the medium term, EU Member States must return to fiscally sustainable positions and ensure there are no “debt explosions” leading to negative financial market reactions;
- in order to provide long-term growth and jobs, it is now essential that EU Institutions ensure that the National Recovery and Resilience Plans are sufficiently linked to the implementation of structural country-specific reforms, as designated under the European Semester;
- whilst the recovery remains fragile, it will be essential that policy makers avoid placing excessive regulatory burdens on business, many of whom have seen financial positions severely weakened as a result of the crisis.