Chapter News

Key Findings | Quarterly EU Economic Update: A Rocky Road to Recovery

On November 17, 2021, the European Union Delegation to the United States partnered with the European American Chamber of Commerce – New York (EACCNY) to convene a webinar to discuss how Europe’s Recovery and Resilience Facility – its largest investment package ever – will put Europe’s economic rebound on a solid footing by promoting green and digital transitions while supporting structural reforms that should boost long-term growth and productivity.

The discussion explored the momentum behind the region’s economic recovery and provided analytical context to the newly released autumn 2021 Economic Forecast and, specifically, the solid growth numbers that the EU economy is experiencing – growth that is expected to continue into 2022.

The event featured the European Delegation to the United States’ Counsellor for Economic and Financial Affairs, Balazs Parkanyi, and Senior Economist, Ben Carliner, and was moderated by the Executive Director of the European American Chamber of Commerce New York Chapter, Yvonne Bendinger-Rothschild.

The speakers noted that how a robust policy response helped lay the groundwork for the recovery. Jobs and household incomes were supported by a variety of measures, perhaps most notably through short-time work schemes that kept workers attached to their jobs throughout the pandemic and avoided the sharp increase in unemployment experienced in some other jurisdictions. Domestic demand is set to drive growth going forward, while the RRF should ‘crowd-in’ private investment with strategic investments in climate and digital infrastructure.

A number of headwinds, from Covid-related supply shortages and logistical bottlenecks, to higher energy and raw material prices, are weighing on output. Similar issues have confronted the United States, which has experienced longer-than-expected supply chain challenges and rising inflation at a higher pace than the EU.

The European Commission believes these headwinds largely will prove transitory, with energy prices forecast to fall back by the spring and supply chain bottlenecks slowly easing as businesses invest in new capacity and consumption shifts from goods back to services.

Analysts expect policy makers on both sides of the Atlantic will next focus on new, medium- to long-term investment in green and digital technologies that will further boost growth and productivity.

The discussion was recorded and is available to view on the EACCNY YouTube page.

Compliments of the European Delegation to the United States.