Source: European Parliament
The EU economy faces a pivotal moment marked by acute geopolitical uncertainty and shifting trade dynamics. The escalating Middle East conflict has triggered a renewed energy shock, reversing the disinflationary trend and dampening growth prospects. While the labour market remains resilient, households and firms are grappling with high costs of living and tighter financing conditions. Simultaneously, fiscal pressures are mounting as Member States balance the need for strategic investment in defence and the green transition. In recent months, the implementation of the national recovery and resilience plans has accelerated, but 42 % of their objectives are yet to be completed and/or assessed, with the Recovery and Resilience Facility (RRF) coming to an end in December 2026. All Member States are recommended to ensure continuity of reforms and investments implemented through the RRF in an increasingly challenging economic environment.
D’ALFONSO Alessandro
Economics and Monetary Issues