Impact of the energy crisis on the European economy

Background

The EESC is analysing how the energy crisis impacted European economy, especially the purchasing power of households and businesses, economic growth, as well as public finances and competitiveness. The energy crisis and its impact on people's lives and business prosperity is still ongoing and this makes it difficult to measure its final overall impact on the economy.

High inflation was the most visible phenomenon of the 2022 economic performance, with a knock-on effect on other elements of the consumer basket and a strong impact on consumption and behaviour. The very high level of bankruptcy declarations in the EU also shows the seriousness of the situation. For many the situation is financially unsustainable and adds to the already weakened situation created by the COVID-19 pandemic.

The energy crisis revealed and identified some of the substantial weaknesses and disruptions in the EU economic system, which must be structurally improved and adjusted so that it can face similar exogenous shocks more effectively, mainly in terms of resilience, efficiency and strategic autonomy. The EU and its Member States are adopting measures to help households and businesses face the energy crisis.

Key points

• The EU needs to move beyond emergency fiscal responses and focus on structural changes to allow it to decouple from fossil fuels more quickly. To ensure its smooth and competitive economic development, the EU needs reliable and secure deliveries of affordable energy based on an integrated energy market with a large share of clean energy, which is resilient and able to face disruptions and shocks.

• Building on the ECB recommendations, the EESC suggests establishing a "Green triple-T" criterion so that future interventions are tailored, targeted and transition-proof. Untargeted price measures would only prolong the period of elevated inflation in the longer run.

• The EU lacks a long-term framework for robust financing of the Green Deal implementation. The EESC asks for an adequate framework in order to support measures financing the transition to a climate neutral economy in a simple and efficient manner.

Additional information

Section: Transport, Energy, Infrastructure and the Information Society (TEN)

Opinion number: TEN/800

Opinion type: Own-initiative opinion

Rapporteur: Alena Mastantuono (Employers - Group I / Czech Republic)

Date of adoption by section: 16 May 2023

Result of the vote: 66 in favour, 1 against, 0 abstentions

Date of adoption in plenary: 14-15 June 2023

Result of the vote: 194 in favour, 4 against, 10 abstentions

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