At an informal meeting in Budapest on November 16, 2024, European Council leaders adopted the Budapest Declaration on the New European Competitiveness Deal, emphasizing the urgent need to improve competitiveness for the EU to catch up with leading economies. The declaration prioritizes maximizing the EU single market, which currently allows limited free movement, and experts suggest expanding this market to include energy, telecommunications, finance, and defense sectors. [ccf820fc]
Charles Michel, President of the European Council, cautioned that the EU risks falling behind other economies if significant changes are not made. He highlighted the pressing need to reduce energy prices, as EU companies currently face electricity costs that are 2 to 3 times higher than those in the United States. The EU has set a target to meet a 3% GDP expenditure on research and development (R&D) by 2030, which is seen as critical for enhancing competitiveness. [ccf820fc]
The International Monetary Fund (IMF) has warned that the EU's annual GDP growth rate could drop to 1.45% over the next decade without necessary adjustments. This projection is concerning, especially as the IMF noted a widening GDP gap between the EU and the US, particularly in technology productivity. Experts stress that improving competitiveness will require joint efforts from all member countries to address these challenges effectively. [ccf820fc]
In light of these developments, the European Union continues to navigate its budgetary conundrum, which is crucial for its overall prosperity. Paschal Donohoe, the president of the Eurogroup, previously emphasized that political will is essential for progress in resolving budgetary challenges that significantly impact economic stability and growth within the EU. [b5f33e57]
Additionally, the EU is prioritizing economic, identity, and social rights in Montenegro, as it seeks to build partnerships with various political entities. Hungary, preparing for its EU presidency, aims to address economic challenges and enhance the common market and industry, focusing on supporting small and medium-sized enterprises (SMEs). [f52a6c61]
Nicolas Schmit, the EU Commissioner for Jobs and Social Rights, has highlighted the importance of a people-centric Europe, advocating for targeted social policies to combat the cost-of-living crisis and social inequality. Meanwhile, Valdis Dombrovskis, Executive Vice-President of the European Commission, has underscored the significance of the European Green Deal as a competitive advantage and the need for investment in up-skilling and reskilling. [9d7b1f52][55e74a81]
As the EU faces these multifaceted challenges, the integration of social rights and economic strategies remains a priority, with ongoing discussions about the European Social Charter and its relevance in addressing contemporary issues. [5304b747]