Brussels, May 21, 2024 – Commissioners, academics, economists and even a Prime Minister were among the speakers at the annual Brussels Economic Forum, held by the Directorate-General for Economics and Financial Affairs (DG ECFIN) of the European Commission on the 16th of May.
This year’s forum placed a strong emphasis on technological competition, climate change, and the role of private investment in the green transition—topics of particular relevance for SMEs and entrepreneurs.
Spring Economic Forecast Highlights
Maarten Verwey, Director General of DG ECFIN presented the Spring Economic Forecast, highlighting that while the EU economy shows signs of recovery post-COVID, significant challenges remain. Technological competition was identified as a major issue, emphasising the need for SMEs to innovate and adapt in a rapidly evolving market.
This however will be a tough task, as SMEs across Europe are facing skills shortages and labour gaps. Without more support from the EU, SMEs will struggle to keep up with global rates of technological competition.
In March of this year, the European Commission announced its plan to tackle these skills shortages by prioritising skills development and employment across the EU, including funding projects that focus on improving zero long-term unemployment and the activation of NEETs (young people not in employment, education or training).
The Success of EU Enlargement
Ingrida Šimonytė, Prime Minister of Lithuania, delivered a compelling keynote address celebrating the economic benefits of EU enlargement. She recounted Lithuania’s journey from the “evil side of the Iron Curtain” to a thriving member of the EU, with its economy tripling since joining.
Šimonytė stressed the importance of reducing internal trade barriers and overcoming red lines for the common good—a call to action for entrepreneurs to leverage the broader EU market.
The European Commission is currently working on following up on its promise to cut red tape for SMEs in Europe to lighten the administrative load of cross-border trade in the single market for smaller organisations that often don’t have the resources to complete the necessary paperwork.
Mobilising Private Investment for the Green Transition
European Commissioner for the Economy Paolo Gentiloni underscored the critical need for increased private investment to match public spending on the green transition. While public investment is robust, Gentiloni noted that private investment remains sluggish.
SMEs and entrepreneurs were urged to seize opportunities in the green economy, as Europe strives to meet its 2030 climate goals with the promise of a proposed new European mechanism, similar to the NextGenerationEU fund, that could provide vital support for sustainable projects to be created during the next legislature.
Worker and Community Involvement in Climate Plans
Tea Jarc of the European Trade Union Confederation and Hillary Cottam, author and social entrepreneur, highlighted the necessity of involving workers and local communities in climate initiatives. This engagement is crucial for maintaining public trust and ensuring the success of environmental policies.
Without trust in institutions, and with politicians failing to deliver on promises made during their campaigns, it’s no wonder so many frustrated Europeans are heading towards the far-right when voting, stated Jarc.
These speculations are in line with predictions that Europe will be taking a sharp turn to the right in the upcoming elections as voters shift to populist radical right parties, with centre-left and green parties predicted to lose ground.
The Future Beyond Recovery and Resilience Facility (RRF)
Youth climate activist Adélaïde Charlier was quick to criticise the EU for its slow pace on climate action, asking why the EU has failed to raise funds to tackle the crisis if it was able to mobilise significant funds for the COVID crisis.
This sentiment echoed throughout the forum, advocating for similar financial mobilisation to address climate change, with the private sector taking the blame for sluggish investment.
Economic Outlook and Implications for SMEs
The Spring Economic Forecast projects modest GDP growth and a gradual reduction in inflation, with private consumption expected to drive economic activity.
However, investment growth is expected to pick up slowly, presenting both challenges and opportunities for SMEs. Improved credit conditions and a more resilient labour market provide a supportive backdrop for entrepreneurial ventures.
The Future of Investment Will Be Green
The Brussels Economic Forum 2024 highlighted the intertwined nature of economic, technological, and environmental challenges facing the EU.
For SMEs and entrepreneurs, the message was clear: innovation, investment in green technologies, and active community engagement are pivotal for future success.
As the EU navigates its economic trajectory, small and medium-sized enterprises have a crucial role to play in driving sustainable growth and technological advancement.