BusinessEurope Headlines No. 2019-27
Today, BusinessEurope presented its new strategy paper for EU research and innovation (R&I), setting out 30 concrete policy measures for the new EU political agenda. As the global innovation race accelerates with fierce competition for new R&I investments, Europe needs to move forward in the following four priority fields: i) more and smart public investments; ii) “fit for innovation” regulations, iii) skilled people, iv) enhanced collaboration. Our 30 policy recommendations can turn ambition into reality. See the publication.
Contact: Carolina Vigo
Video message on why research & innovation matter: the SME perspective
BioPhero wants to lead the global transition towards sustainable agriculture. Watch this video to understand the importance of research and innovation and Horizon Europe funds for a technology-intensive SME.
Signs of a slowdown reinforce need for structural reforms
By Malthe Munkøe, Senior Adviser, Economics Department
BusinessEurope released its latest Economic Outlook in June where we forecasted 1.6% GDP growth for the EU-28 in 2019. We noted that growth was faltering and that structural reforms to increase competitiveness were needed to keep growth on track. Since then, economic conditions have worsened considerably, further reinforcing the need for structural reforms:
- The German economy has done substantially worse than expected and entered recession territory in the second quarter of 2019 with -0.1% quarter-to-quarter GDP growth. The IFO Business Climate Indicator, which combines an estimate of the current situation and a forward look at the coming six months, has plunged to a 7-year low.
- Although the political turmoil in Italy has now subdued, we still forecast zero economic growth in line with our June forecast.
- While relatively high growth continues in many EU member states, for example in Spain (+0.5% quarter-to-quarter growth in 2019Q2), Poland (+0.8% in 2019Q2) and Denmark (+0.8% in 2019Q2), trade tensions have worsened, leading to a general deterioration of the economic situation in Europe.
Following these developments, economic growth in 2019 of nearer to 1% now seems more likely. The ECB’s Survey of Professional Forecasters from July (which is based on a survey among a range of professional macroeconomic forecasters) pointed to 1.2% real GDP growth in 2019 in the eurozone. Since then, the economic situation and more recent data releases all point to a further deterioration.
The recent downturn highlights the frailty of the EU economy and the continuing need at both national and European level for structural reforms in both labour and product markets to increase long-run growth. For example, average tax levels in the EU should be lowered to align better with those of other large economies, and public spending should be refocused more towards growth-enhancing expenditures such as research and development.
Contact: Malthe Munkøe
Contact: Eleonora Catella
Contact: Robert Plummer
Contact: Daniele Olivieri
- 17-20 September: UN General Assembly
- 20 September: Transport Council
- 23 September: HELweCan! – Boosting skills & continuous learning
- 24 September: Energy Council
- 24-26 September: European Research & Innovation Days