What will the EU face in 2024?

Publishing date
22 December 2023
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The European Union has weathered the pandemic, the outbreak of war and the subsequent shocks to jobs, energy prices and interest rates. Now it faces an even bigger task: how to keep momentum when the challenges remain immense, but the shock of crisis is fading. In 2024, policymakers will need to rein in budget deficits, invest in the green transition and keep pursuing the elusive ‘soft landing of the economy’. With the European Central Bank’s deposit rate at a record 4% and more than half the EU on course to post excessive deficits under the bloc’s fiscal rules, the transition will be tricky.

The ECB took action to bring inflation down, while the EU worked overtime to shed dependence on Russian natural gas and increase support to Ukraine in its second year of fighting back Moscow’s invasion. Now prices are more in balance, but the economic outlook is not. Weaker growth and underinvestment threaten to undermine the past year’s hard-won successes.

To secure its future, the EU needs to put capital to work on phasing out fossil fuels to reduce carbon emissions in coming years. This means combined public and private investments of 2% to 2.5% of gross domestic product, as Jean Pisani-Ferry wrote in a landmark report commissioned by the French government. The EU also will need to get serious about making its fiscal rules fit for purpose, as Jean, Jeromin Zettelmeyer and Zsolt Darvas have made clear. And as Heather Grabbe notes, the EU must commit to not just keeping the peace but building a future with Ukraine and other future members. Furthermore, social evolution will play an important role -- when men don’t take an active role in pursuing gender equity, all of society loses out.

Bruegel will continue to press policymakers to bring their best ideas to the table in the year ahead. While looming elections and ongoing obstacles will put Europe to the test, there is also an opportunity to rise to the challenge.

Listen to the latest podcast episode with Rebecca Christie, Heather Grabbe, Jean Pisani-Ferry, Fiona Scott Morton and Jeromin Zettelmeyer, 'A year in review'.

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About the authors

  • Rebecca Christie

    Rebecca Christie is a Senior fellow at Bruegel and hosts Bruegel's podcast, The Sound of Economics. She is also the Brussels columnist for Reuters Breakingviews. She writes about the crossroads of markets, policy and politics, particularly where it comes to the European Union and how it interacts with the world. She was lead author on the European Stability Mechanism’s official history book, "Safeguarding the Euro in Times of Crisis: the Inside Story of the ESM".

    Over more than two decades in journalism, Rebecca has reported from Brussels, Washington and around the world for Bloomberg News, Dow Jones Newswires/The Wall Street Journal and the Financial Times. She joined Bruegel as a visiting fellow in 2019.

    She has also served as an expert adviser to a European Economic and Social Committee panel on taxation, is a regular conference speaker and moderator, and has provided editing and policy analysis to the European Commission, members of the European Parliament, and the African Development Bank. A US-Belgian dual citizen, she holds degrees from Duke University and from the LBJ School of Public Affairs at the University of Texas at Austin.

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