American Chamber of Commerce to the European Union (AmCham EU)’s Post

With shifting global markets, rising inflation, and geopolitical tensions, Europe's economy is at a crossroads. Will Europe embrace bold reforms, or will uncertainty slow its growth? Dive into this analysis of the key challenges and opportunities shaping Europe’s economic path. https://lnkd.in/ec_JGaNz

📢 Political Instability in Europe – What Does It Mean for Businesses? Political turbulence across Europe is reshaping the economic landscape. With nine EU governments facing instability, the impact on trade, investments, and financial markets is already being felt. 📊 Key takeaways from our latest report: ✔️ Economic uncertainty in Germany, France, and Austria is slowing growth. ✔️ Poland stands out with record GDP growth despite regional challenges. ✔️ The EU faces a critical test: can it maintain economic stability amid political shifts? Read our full analysis in the attached document. 👀 💬 Have thoughts on how political risks are shaping business strategies? Share it in the comments! #RiskManagement #EconomicTrends #PoliticalRisk #BusinessStrategy

What's next for Europe? Regional Economic Outlook for Europe | May 2024 | IMF As of April 2024, headline inflation in the euro area has remained stable at 2.4 percent. Core inflation has also decelerated. Despite this positive news, inflation rates remain elevated in several European countries, this necessitates a careful and measured approach to monetary policy easing.  We project that the ECB will reduce its policy rate starting in June with cuts of 25 basis points each quarter until it reaches a neutral stance at 2.5 percent in September 2025. This seems appropriate under our baseline scenario. In Central, Eastern, and Southeastern Europe countries, we also see rate cuts ahead. But disinflation has further to go. For that reason, monetary policy will need to remain tight for an extended period. Finally, a brief word about fiscal policy. The current recovery also provides the opportunity for more ambitious fiscal consolidation. Labour markets are tight, public debt ratios have risen, and output gaps are near zero in many countries. For these reasons, we recommend a less backloaded deficit reduction than currently envisaged for 2024-25. While Europe is doing better now, deep structural challenges aging, climate change, and global fragmentation— await. Unfortunately, Europe does not enter this period from a position of economic strength. Europe's Critical Weakness: Low Productivity  Under current policies, this gap is unlikely to narrow for decades to come.  The primary factor behind the income disparity with the United States is "Europe's lower productivity". A smaller EU capital stock and labour input explain about one-third of the difference. However, the bulk of the gap—nearly 70 percent—can be attributed to "lower productivity". The comparison applies if more granular data, such as aggregate hours worked, are used. Enhancing Productivity and Competitiveness also Requires Better Integrated Capital and Labor Markets  What else can Europe do to achieve faster productivity growth?  Let me step back and first recognize that Europe’s productivity deficit extends across sectors and firms. The following chart is illustrative. The share of Europe’s high-productivity sectors in total output (10 percent) is about one-fourth of the share in the United States (44 percent), while the share of low-productivity activities in Europe is much larger than in the United States. To enhance productivity, Europe requires either more or larger firms at the productivity frontier. It must also elevate medium-productivity firms to high performers and enable low-productivity businesses to either catch up or make room for high-labor productivity firms offering better-paying jobs. A recent IMF study finds that reducing remaining barriers to the Single Market for goods and services by 10 percent could raise European output by as much as 7 percentage points over the long term. 

My newsletter for Bruegel - Improving economic policy 中華 Mundus on how the #investment by #European companies into #China is evolving and what to expect next. https://lnkd.in/gKj4aDeq

🌍 Cross-Border Payments Driving Economic Growth 🌍 Have you traveled internationally, made an online purchase from an international merchant, or sent a remittance to family member in a different country? Most people are making cross-border payments without even realizing it, but there is a lot happening behind the scenes to make sure your payment experience is seamless and secure. Check out a new World Economic Forum blog by Robert Thomson on trends in cross-border payments and opportunities for public-private partnership. https://vi.sa/4fTllFj #WEF25 #Davos

Not a footnote regarding #SocialEconomy? Really? Well, I'm sure no one is surprised that the much-awaited report on Europe's competitiveness from Mario Draghi does not include any reference to the Social Economy or even #JustTransition. In my opinion, it's an "old" report. It uses theoretical frameworks of analysis with little systemic view. Do we really think competitiveness measures—or any measures at all—can be assessed and implemented in a social void? Haven't we learned from our recent and distant past? Even using more classic approaches to analyze the report, it still ignores a significant economic reality, which is a clear "competitive" advantage over other developed countries: the EU as a whole is by far the region where the Social Economy has the strongest presence in the economy, society, and policy. It's one of the industrial clusters, for goodness' sake! Moreover, do we really believe that innovation or research policy will give us a competitive advantage by focusing solely on areas like Defense, Pharma, or Space without investing in welfare-related industries? The EU's most relevant asset compared to the USA is arguably its welfare state. Perhaps this is because we still think of the welfare state as an expenditure rather than an investment. Sorry, but this was a missed opportunity. Víctor Meseguer Sánchez Aicha Belassir Michael Roy Rocío Nogales Benoit Hamon amal chevreau Maxime Baduel Alexandre Lourié Jérôme SADDIER Sarah de Heusch

Will Europe’s political instability derail its economic recovery in 2025? With sluggish growth, structural challenges, and fiscal concerns in major economies like France and Italy, Europe faces uncertain times. Watch the on-demand event to learn more: https://lnkd.in/gXX6TvyP #europeaneconomy #world2025

Interoperability across jurisdictions will help reduce the regulatory burden to ensure that cross-border payments continue to be an engine of growth for the world economy 🌐

🔎 In the final #EconomicBrief of 2024, our senior economic adviser Hervé Goulletquer analyses the IMF's latest global economic outlook, followed by a closer examination of the challenges facing Germany and France. While the difficulties on either side of the Rhine differ, a common thread emerges: political instability coupled with increasing economic uncertainty. On a global scale, the IMF predicts a slowdown in economic growth following a brief period of stability. But what factors are driving this downturn? In Germany, the government is struggling with rising economic nationalism, soaring energy costs, and the urgent need to address long-overdue structural reforms. Meanwhile, in France, the declining attractiveness of government bonds on financial markets highlights the nation’s precarious position, marked by ongoing struggles to restore a sustainable balance between public deficits and long-term interest rates. Discover the full report here ➡️ https://lnkd.in/ePUvu7W4

Global networks enable local businesses to compete on the world stage. My friend and colleague Robert Thomson shows how cross-border payments uplift economies in an excellent new essay for the World Economic Forum.