EU competitiveness: Issues and challenges

Summary:

Strengthening the European Union's economy in the face of rising global economic and political competition and managing the 'twin transitions' of the digital and green transformation is a key challenge for the 2024-2029 legislative term. This briefing highlights key aspects of the debate around strengthening the EU's economy. While the term 'EU competitiveness' is not clearly defined, there is broad agreement that it entails a range of policies focusing on, but not confined to, the EU's single market. The single market is far from complete, and abolishing barriers to trade would allow for efficiencies and economies of scale. We also look at other policies that are essential when it comes to safeguarding and strengthening EU competitiveness, in particular its industrial and energy policies, and outline the discussion around EU competition and investment policy. In doing so, it becomes clear that strengthening EU competitiveness is not a technical process confined to individual policies. Instead, it opens up deeply political discussions over the changing nature of the EU's economic and political model, with long-term distributional consequences. Given its very nature, there is no single answer to the competitiveness challenge confronting the EU. Without claiming to be comprehensive, this briefing rather seeks to provide a structure to the debate and point to some of the fundamental political and economic questions EU policymakers need to address during the 2024-2029 political term.

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