How can the EU maintain its economic growth?
After the recovery of the eurozone from the 2008 recession and 2013 debt crisis, the economy in Europe has continued to enjoy strong levels of growth. Most economies in the bloc have become more stable, and experts predict this will continue in the short term. However, the IMF have warned that if the EU wants to maintain this growth long term, it needs to reduce the high levels of unemployment seen in some member states.
According to the newly released report, the unemployment levels as they stand are risking the future growth of the eurozone. It has also warned that this could put the ongoing recovery in jeopardy, “even in the absence of external shocks”. In countries like Italy, Greece and Spain, unemployment remains far higher than needed. Another issue the eurozone is facing is the ageing population, which comes with associated costs like healthcare and pensions.
The EU has already introduced a number of strategies, mainly focusing on tackling youth unemployment. The Youth Guarantee, along with the Youth Employment Initiative aim to offer all under 25’s the opportunities they need to receive high quality education, training or an apprenticeship when they are long term unemployed. These already provide funding to companies employ young people, especially in areas of high unemployment.
Additional focus has also been put on supporting new businesses and providing entrepreneurs based in the EU with more opportunities to grow their companies. Entrepreneurship is key when it comes to supporting strong economic growth across Europe. Allowing small and medium sized businesses to flourish helps to create prosperity and jobs. The commission has introduced initiatives to encourage EU citizens to develop the skills needed to start businesses including innovation, creativity, planning and problem solving.
However, the IMF has suggested that the EU needs to take further steps to ensure that growth remains stable. As well as tackling the high levels of debt across member states, the report has called for a greater level of risk sharing between countries. It said that the economic recovery that’s been seen in recent years is “an opportunity to move faster to deepen economic and monetary union” within the eurozone.