Winter Economic Forecast 2023 shows the "EU economy is not out of the woods yet," says EESC Employers' Group President

13 February 2023 - The Winter interim Economic Forecast released today lifts the growth outlook for this year to 0.8% in the EU and 0.9% in the euro area. Both areas are now set to narrowly avoid the technical recession that was anticipated for the turn of the year. The forecast also slightly lowers the projections for inflation for both 2023 and 2024.

The numbers underline that we are not out of the woods yet, said Stefano Mallia, President of the Employers' Group in the European Economic and Social Committee. "Core inflation and high energy costs are hitting European companies harder than their American and Asian competitors. If you add to those incentives and subsidies, which are pushing companies to relocate and private investment to move away from Europe, the outlook is not as favourable as it seems," he added, stressing that we should remain cautious despite confidence is improving and January surveys suggest that economic activity is also set to avoid a contraction in the first quarter of 2023.

Given the current asymmetric shock of the consequences of the war and the proposals by major trading partners, particularly the US with its Inflation Reduction Act, Europe must address any hindrance to growth by reducing push factors for investments outside the EU, Mallia insisted and called for a Competitiveness Agenda, including a competitiveness check for all new proposals.

EU Employers underline that existing rules and red tape must also be reviewed so that jobs can be created in the European economy, fostering social and regional cohesion. 

"The Green Deal Industrial Plan is a first step in the right direction," continued Mallia. "However, it must target not just 'cleantech' but all sectors, as the net-zero transformation will concern all industries."

Members of the Employers' Group also insist that the EU must simplify permit procedures and regulatory frameworks in the Single Market to create an enabling environment where relaxing EU state aid would remain temporary.