The economic outlook is improving
After being hit by a double-dip recession since 2008, there are genuine signs that a more lasting recovery is now taking place in the EU and the euro area. Confidence has improved and business indicators have remained above their long-term levels supporting a central scenario of a recovery that is gradually gaining strength and spreading across the EU.
Growth indeed turned positive in a large majority of Member States over the course of 2013 and the outlook has improved even in the more vulnerable countries of the euro-area periphery. Real GDP growth is projected to advance with moderate momentum in 2014 before gaining some further speed in 2015 and 2016.
Among the world's largest economies, economic growth is expected to be sustained in Germany while the recovery is firming in Spain and slowly gathering pace in France and Italy. In the UK, growth is becoming firmly established.
The European Union, with its 10-year “Europe 2020 Strategy”, is aiming at three broad objectives that define its vision for the type of economy and society it desires to become by the end of this decade. These three broad objectives are to achieve smart, inclusive and environmentally sustainable societies.
The EU is not a homogeneous entity in terms of competitiveness. Large disparities exist among Member States, with some countries performing much better than others and well above the EU average or that of other advanced economies, such as the United States. The spread in performance across European countries is particularly stark in areas such as innovation. The differences in competitiveness across Member States, are represented in a distinctive emergence of 4 groups of countries:
- Nordic Europe, composed of Sweden, Finland and Denmark
- Western Europe (and Estonia), composed of the Netherlands, Austria, Germany, United Kingdom, Luxembourg, Belgium, France, Estonia and Ireland
- Southern and Eastern Europe, composed of Slovenia, Portugal, Spain, the Czech Republic, Cyprus, Malta, Latvia, Lithuania, Italy, Slovak Republic, Poland and Hungary
- Southeast Europe, composed of Greece, Romania and Bulgaria
The competitiveness divide in Europe
Source: World Economic Forum
With Europe finally starting to emerge from recession, many European businesses are starting to outperform with faster-than-average earnings and sales growth.
The European Union began as the European Economic Community with the signing of the Treaty of Rome by six countries in 1958. The EU now counts 28 countries as members, including 19 that have adopted the euro as common currency.
The EU is the largest economy in the world, the biggest exporter and importer, the leading investor and recipient of foreign investment and the biggest aid donor. The Union is one of the world’s most outward-oriented economies. With just 7% of the world’s population, it accounts for over one quarter of the world’s wealth as measured by gross domestic product (GDP) — the total value of goods and services produced.
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