Overview

  • Economic growth in the European Union (EU) is increasingly solid, both in terms of its pace and composition. The European economy has entered its fifth year of recovery, which is now reaching all EU Member States. Private consumption remains the main driver of growth.

    The prospects of investment becoming a second pillar of growth are also good, as a recovery in investment continues to benefit from very favorable financing conditions and improvements in corporate profitability. The recovery of credit to the private sector is proceeding. Moreover, the global recovery should increasingly lend support to trade. 

    The labor market continues to improve, though it remains uneven, and the employment rate has finally returned to pre-crisis levels. Large jobs deficits persist in some countries, notably in Southern Europe. In 2017, the rates ranged from around 4 percent in Germany to more than 20 percent in Greece.

    Even in countries where employment has recovered, wage growth remains subdued. People with low and middle incomes have seen their wages stagnate, and the share of middle-skilled jobs has fallen - contributing to rising inequality and concerns that top earners are getting a disproportionate share of the gains from economic growth.

    Sentiment has improved significantly over the last year. Growth expectations have brightened and broadened. However, the uncertainty concerning the duration of exit negotiations and an agreement on future relations between the EU and the United Kingdom (UK) – the so-called “Brexit” - are putting a strain on the European economy.

    The pending regulatory requirements are immense and range from trade-related matters and access to the European single market (particularly important for the financial industry), to horizontal policies, such as migration and social policy, and domestic and security policies. 

    The European Commission is calling for a number of key reforms to the Union's organization, including: the creation of a Europe-wide finance minister; a transformation of the European Stability Mechanism into a European Monetary Fund; and the creation of a dedicated euro area budget line within the EU budget.

  • The World Bank offers its clients in the EU two core products - finance and knowledge. Four countries currently benefit from our full portfolio of instruments, including lending and guarantees: Bulgaria, Croatia, Poland and Romania. Projects for each country are guided by a full strategy document called a Country Partnership Framework.

    Country strategy documents for: 

    Work with other EU Member States is primarily realized through advisory services, such as economic analysis or technical assistance, financed by clients themselves (known as Reimbursable Advisory Services, RAS) or through trust funds (TFs) set up by the European Commission.

    Lending commitments in the EU have totaled more than US$ 10 billion since 2012. Over the same period, RAS and TF activities in the EU have totaled well over US$ 100 million.

  • The EUROPE 2020 PROGRAMMATIC TRUST FUND was established to allow the European Commission to avail itself of the World Bank’s technical assistance and analytical and policy work for the purpose of pursuing the goals of Europe 2020, the EU’s growth strategy until 2020.

    The program manager is based in Brussels and since its establishment in 2012, it has received around €25 million in EU contributions from various European Commission directorates. The trust fund is managed under the EU-World Bank Group Framework Agreement, which is the instrument governing the cooperation between the two partners.

    EU 2020 PORTRAITS OF LABOR MARKET EXCLUSION

    Financed by the Europe 2020 Trust Fund, the World Bank, together with the OECD, has developed the Portraits of Labor Market Exclusion publication series to offer a new way to profile unemployed and inactive populations in seven EU Member States and derive targeted policy recommendations.

    Each “portrait” presents profiles of individuals who have no or limited labor-market attachment. The profiles are created from survey information and focus on people who define themselves as unemployed, retired, or inactive. The portraits attach stories to statistics.

    They examine detailed labor market, demographic, and social circumstances to identify distinct groups of individuals who are the potential beneficiaries of income- and employment-support policies. The analysis, which essentially combines labor market analysis and poverty profiling, offers a pragmatic way to look at individuals through the lenses of both poverty/welfare status and labor market indicators.

    EU 2020 SUBNATIONAL DOING BUSINESS REPORTS

    Unlike regular Doing Business reports that are focused on the national level, subnational Doing Business reports capture differences in business regulations and their enforcement across locations in a single country. They provide data on the ease of doing business in each location, and rank the results.

    In partnership with the European Commission through the Europe 2020 Trust Fund, the World Bank is producing subnational Doing Business measurements in seven EU Member States: Bulgaria, Croatia, the Czech Republic, Hungary, Portugal, Romania, and Slovakia.

    The aim is to advance regulatory reforms at the regional level to promote peer-to-peer learning and convergence toward best regulatory practices, and to foster private sector development.

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Additional Resources

Contact

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Oliver Joy
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ojoy@worldbank.org