EU recovery underway, but spread of covid remains clear risk

Today, BusinessEurope published its Summer 2021 Economic Outlook assessing the EU’s current economic situation and developments. The Outlook also provides policy recommendations for economic policymakers. The outlook highlights that EU exports have bounced back strongly with our larger trading partners recuperating faster than Europe.

We begin to see a way forward, back towards pre-crisis levels of economic activity. Consumer confidence has recovered, suggesting households see better times ahead and expect to resume more normal spending patterns, setting the scene for a full economic recovery.

The EU economy is picking up strongly, but the path back towards a full recovery will be long and fraught with downside risks, including from inflationary pressures and the spread of new, more transmissible virus variants. We forecast 4.4% of economic growth for the EU27 for this year, followed by 4.6% next year.

BusinessEurope Director General Markus J. Beyrer said: “The economic disruptions caused by the pandemic will take some time to shake off, and negative long-term consequences can be mitigated by our policy responses. It is essential to avoid any premature unwinding of supportive measures to businesses and workers at this juncture. In the medium term, EU Member States must return to fiscally sustainable positions and ensure there are no “debt explosions” leading to negative financial market reactions. Whilst the recovery remains fragile, it will be essential that policy makers avoid placing excessive regulatory burdens on business, many of whom have seen financial positions severely weakened as a result of the crisis. To provide long-term growth and jobs, it’s now essential that EU Institutions ensure that the National Recovery and Resilience Plans are sufficiently linked to the implementation of structural country-specific reforms, as designated under the European Semester.“

"The Confederation of Industry of the Czech Republic, as it regularly does, participated in this forecast and provided input for the Czech Republic. We expect the Czech economy to recover at a rate of about 3.3% this year," said Bohuslav Čížek, director of Economic Affairs Department of the Confederation.