Brussels (Brussels Morning Newspaper) – EU leaders discussed economic developments and demographic challenges impacting competitiveness during a meeting with social partners.
The European Council presidency, the European Central Bank and the European Commission had seated with European social partners on 4 November 2024 to examine recent developments in the economic situation, as well as a thematic issue chosen by the Hungarian Presidency: “demographic changes impacting competitiveness”.
How is the Hungarian presidency addressing demographic issues?
Mihály Varga, Minister for Finance of Hungary, currently holding the presidency of the Council stated in his remarks, “Europe’s role in the global economy has seriously declined in recent decades, as the competitiveness hole keeps widening vis-Ă -vis leading global competitors.”Â
He contended that discussions are rightly frequent regarding focusing policy intervention on key areas, such as ensuring the development of real income, improving productivity and investment levels and appropriately leveraging opportunities provided by the digital revolution.Â
Further, he said:
“The rapid ageing of European societies, declining birth rates, burdening social welfare systems, and growing labour shortages are persistent and escalating challenges across Europe that demand urgent and effective solutions, especially related to supporting families and households raising children. Therefore, realigning the unfavourable demographic trends should also be given more consideration from a competitive perspective.”
What reforms are planned to tackle labour market shortages?
Valdis Dombrovskis, Executive Vice President of the EU Commission, indicated remarks that while Europe’s economy is slowly improving after a series of crises, its growth potential could be affected by relatively low private investment and compounded by labour and skills shortages. He emphasized that as the EU’s new institutional cycle begins, the involvement of social partners is crucial for navigating the upcoming demographic, social, economic, and fiscal challenges.Â
He also highlighted that the focus for the coming years would be on reforms and investments aimed at boosting Europe’s competitiveness and addressing sluggish productivity growth, with particular attention to creating quality jobs, increasing balanced labour market participation, and maintaining social cohesion across Member States.
How is the EU planning to boost economic resilience?
Moreover, Paschal Donohoe, President of the Eurogroup, remarked that the macroeconomic dialogue provides a valuable opportunity to exchange views on the economy with social partners. He noted that despite facing numerous external challenges, the euro area economy has demonstrated resilience. He mentioned that progress is being made in reducing inflation and that the labour market remains strong.Â
Donohoe stated that the current focus is on balancing public finances and improving competitiveness, and he emphasized that the Eurogroup is actively engaged in these discussions. He found the emphasis on demographic challenges in today’s dialogue particularly useful as they consider the necessary policy solutions.
