Major economic challenges facing the European Union

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Major economic challenges await the European Union in the coming period, the most important of which is the implementation of recovery plans, the reduction of unemployment and the laying of new foundations for the relationship with the United States under the administration of President-elect Joe Biden.

In a report published by the French newspaper “Le Monde”, writer Marie Charelle sees that the EU has made some gains by the end of 2020 despite the ongoing coronavirus crisis and the fallout from the Brexit negotiations.

One of the most significant gains, according to the author, is the agreement by the leaders of member states on 10 December 2020 on the stimulus plan, which is estimated to cost 750 billion euros and has been under discussion since May this year. The successful negotiations on the plan after overcoming the objections of Budapest and Warsaw.

EU has made some gains by the end of 2020 despite the ongoing coronavirus crisis

Under this agreement, the members agreed to reduce the net greenhouse gas emissions of the Union by 55% by the end of 2030. The European Commission also unveiled on 15 December 2020 a set of measures aimed at reducing the dominance of digital giants.

1. implementation of recovery plans

The first challenge this year -says the author – to achieve a quantum leap and economic recovery in the concrete, and not merely the adoption of the current plan, but the need to take quick actions to begin their implementation.

The ITU’s mission is to drive investment projects that will revitalize the region’s economies while committing to a shift towards environmentally-friendly industries.

These policies can take a long time to implement, and can sometimes become the subject of sudden political bargaining, or be abandoned, which requires more efforts to ensure the implementation of structural reforms, according to the author.

European countries should extend emergency aid to reduce bankruptcies, reduce unemployment rates that have risen in the past, and avoid social chaos.

The author of that recovery in various forms, the state of the North -which didn’t consist of massive losses financially and industrially – will recover faster than South-South aid for bankruptcy due to the stagnation of the tourism sector, limiting their financial capacity to maneuver.

European countries should extend emergency aid to reduce bankruptcies

In addition, the European unit will be tested when the budget talks resume. The European Council on Foreign Relations also fears the impatience of Austria, Denmark, Finland, the Netherlands, and Sweden with states seeking long-term support.

2. reduction of unemployment rates

The second challenge facing the European Union was to reduce unemployment rates, which primarily affected the youth population.

The author believes that the difficulties of entering the labor market in the midst of the current recession portend long-term consequences, as a large part of the workforce will remain without a job for a long time, and many will be forced to accept jobs that do not meet their ambitions and do not guarantee a minimum level of financial stability.

A recent Allianz study showed that the average income of young people in Union countries will not return to the pre-crisis level until 2024. This will result in a deepening of the intergenerational income gap and lower levels of economic growth over the coming years.

3 – overcoming divisions

The author adds that the third challenge is both geopolitical and economic in nature, as the relationship with the United States should be reworked and the policy of multilateralism revived in the system of international relations.

The European Union sees Biden’s victory in the US presidential election as an opportunity to reshape relations on both sides of the Atlantic, by promoting technological cooperation and jointly defending democratic values against the Chinese giant, the author said.

But former EU official Luc van Middelaar warns of the danger of aligning with the United States to form an anti-China pact and sees this as a big trap for the Union.

According to the writer that the Old Continent will be the biggest loser if she returned back in its relationship with the United States, having opened up economically and of American hegemony.

In her view, standing up to China and the United States requires the 27 member states to overcome divisions, bridge rows, and speak with one voice.

Josep Borel, the EU’s foreign policy and security officer, sums up the economic challenges members face: “if we don’t work together today, we will be worthless tomorrow.”

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