Compared to its global peers like the United States, the euro area is facing pressing challenges: low labour productivity, weakening competitiveness and slowing economic momentum. To reverse this trend, the European Economic and Social Committee (EESC) is calling for an urgent and coordinated strategy.

In its opinion Euro area economic policy 2025, the EESC outlines a plan to drive growth by deepening the internal market, cutting regulatory red tape and ensuring fiscal sustainability. At the same time, policies must address transformative trends like artificial intelligence (AI) and the pressures of an ageing population.

After external shocks like the COVID-19 pandemic and the energy crisis, the euro area is being confronted with major economic challenges. While stabilisation efforts have been made, issues such as domestic uncertainty, demographic shifts and rising fiscal pressures demand bold reforms.

The EESC puts forward a three-step approach to enhance productivity and competitiveness: deepening the internal market, coordinating industrial policy and cutting red tape. Fiscal sustainability is crucial, requiring a balanced framework, stronger EU collaboration and efforts to tap into untapped revenues. Investment remains a weak point, with a need for expanded venture capital and innovation-friendly policies.

Labour market resilience is also key, necessitating flexibility, fair wages, social security reforms and AI-driven skills development. The EESC stresses the need for shared accountability between the EU and its Member States, advocating enhanced policy coordination. With decisive action and strategic investments, the euro area can build a resilient, competitive and sustainable economy for the future (tk).