The Council presidency, the European Central Bank and the European Commission met with European social partners on 4 November 2024 to discuss recent developments of the economic situation, as well as a thematic topic chosen by the Hungarian Presidency: “demographic changes impacting competitiveness”. Mihály Varga, Minister for Finance which currently holds the presidency of the Council Europe’s role in the global economy has significantly declined in recent decades, as the competitiveness gap keeps widening vis-à-vis leading global competitors. Discussions are rightly frequent about focusing policy intervention on key areas, such as ensuring the growth of real income, increasing productivity and investment levels and to properly leverage opportunities provided by the digital revolution. The rapid aging of European societies, declining birth rates, burdening social welfare systems, and growing labour shortages are persistent and escalating challenges across Europe that demand urgent and effective solutions, especially related to supporting families and households raising children. Therefore, realigning the unfavourable demographic trends should also be given more consideration from a competitiveness perspective. Participants of the Macroeconomic Dialogue at the political level have held a fruitful discussion on possible avenues of action. As we focus our efforts on recovering our competitiveness and improving productivity, it is important to remember that for these changes to last, a growing and prosperous European population is key. Valdis Dombrovskis, Executive Vice President, European Commission While Europe’s economy is slowly improving after a series of crises, its growth potential may become affected by relatively low private investment compounded by labour and skills shortages. As the EU’s new institutional cycle gets underway, we need our social partners more than ever to help us navigate the upcoming challenges: demographic and social, economic and fiscal. For the years ahead, our focus will be on reforms and investments to boost Europe’s competitiveness and sluggish growth in productivity - always with an eye on creating quality jobs, increasing balanced labour market participation and maintaining social cohesion across Member States. Paschal Donohoe, President of the Eurogroup The macroeconomic dialogue is a valuable opportunity to exchange views on the economy with social partners. Despite facing many external challenges, the euro area economy has shown resilience. We are making good progress in reducing inflation, and the labour market has remained strong. Our current focus is on balancing public finances and improving competitiveness. The Eurogroup is actively involved in these discussions, and today’s focus on demographic challenges was especially useful as we consider the necessary policy solutions. Isabelle Schömann, Deputy General Secretary of the European Trade Union Confederation (ETUC) Shaping our macroeconomic policy to deliver quality jobs requires decisive action to mobilise and channel investment. To address the defining challenges of our time, the EU must equip itself with a permanent investment instrument that measures up. The EU must compensate for the failure to reform fiscal rules, leading to austerity and future economic recession, notwithstanding the current narrative on competitiveness. Besides, the impact of ageing on fiscal policies should be taken into account over the long term, by revising upwards the trend in public spending. At the same time, monetary policy should be shaped to deliver quality jobs and support demand side measures. Working people are facing a social justice emergency in which their real incomes have fallen while corporate profits have soared. To restore trust in the European project, our institutions must tax excess wealth and windfall profits. There can also be no more blank cheques to corporations and strong social conditionality is needed to make sure every cent of public money is leveraged to maintain and create quality jobs. Markus J. Beyrer, Director General of BusinessEurope Achieving our ambitions on sustainability, social progress, and higher living standards depends on a strong economic foundation. Yet, in recent years, the European Union’s economic engine has slowed significantly. Our Economic Outlook, released today, projects growth of only 0.9% in 2024 and 1.3% in 2025, underscoring the urgency of boosting Europe’s competitiveness. To drive meaningful progress, competitiveness must be a central priority in all EU-level decisions. With a start of a new EU political cycle, it is now urgent to start a serious effort to make it easier and more attractive to do business and invest in Europe. Valeria Ronzitti, SGIEurope Secretary General The EU has a historic responsibility to turn the current challenges into opportunities. It will require decisive action at both the national and European levels. Fiscal and structural policies must make the economy more productive, competitive and resilient. Spending on infrastructure must not suffer due to the expansion of the portion of the budget related to ageing. This dilemma must be solved as Member States prepare their medium-term fiscal structural plans. In that context, SGI Europe, together with ETUC and SMEunited, issued a joint statement calling for effective social partner consultations in implementing the new EU economic governance, as the essential balancing acts involving investment and social welfare cannot be addressed without social partners’ input. Véronique Willems, SMEunited Secretary General We are all aware that the development of our SMEs as well as our industry is stagnating and fall behind our competitors, as the latest SMEunited Barometer confirms. We choose to tackle Europe’s problems and shortcomings as listed in the Draghi and Letta reports. Overburdening legislation and inefficiency of public administrations must be addressed, as they weaken our single market and make Europe less attractive for investments. In addition, demographic changes will increase labour and skills shortages as well as endanger business continuity. We must further invest to activate all working-age people, making work pay, improving labour mobility and making Europe more attractive for third-country talents. And we have to create awareness on business transfer, to guarantee existing business to survive and preserve jobs. Andrzej Domański, Minister of Finance - (next Polish Presidency: January-June 2025) Security will be an overarching theme of the 2025 Polish Presidency. This means not only the financing of the EU strengthened defence capabilities, but also the completion of the EU single market being the foundation of European economic prosperity and competitiveness. The Polish Presidency will bring the single market to the core of political discussions. In particular, we believe that the EU should focus on the single market for services, which has the untapped potential of additional annual growth in all Member States. Thus, we will discuss this issue at the next Macro-Economic Dialogue at Political Level scheduled for March 2025. Stephane Lose, Minister of Finance (represented by Economic and Financial Committee Member Rasmus Degn) - (future Danish Presidency: July-December 2025) An economically strong, competitive Europe and our European security are main priorities of the 2025 Danish presidency. Economic reforms, also addressing our demographic challenges, are vital for building fiscal space to support these priorities. The next macroeconomic dialogue will be organised under the Polish presidency. | 
