The economy of the European Union has not flourished much in recent decades. The average annual rate of economic growth from 2010 until the arrival of the coronavirus pandemic was between one and two percent. Last year it even amounted to only half a percent, and this year growth is expected to accelerate to only 0.9 percent, as predicted by the European Commission. According to the IMF, the economy of the eurozone (not the entire EU) is expected to grow by 0.8 percent this year. [1]

It is evident that after the end of the covid crisis, the European Union is treading on the spot economically. The largest brake in this direction is the largest European economy, i.e. Germany. Its GDP fell by 0.3 percent last year, and is expected to increase by only 0.2 percent this year, as expected by the IMF. The European Commission is only slightly more optimistic – it expects German GDP to grow by 0.3 percent. [2]

Thus, Germany can undoubtedly be included among the losers of this year. Only Sweden is expected to show weaker growth in 2024, by 0.2 percent (according to the European Commission). If we consider as losers the countries whose GDP will increase by less than one percent this year, we can add to Germany Estonia (0.6%), France (0.9%), Italy (0.7%), the Netherlands (0 .4%), Austria (0.6%), Finland (0.6%) and Denmark (0.9%). [3]

On the other hand, the group of winners consists of those EU member countries whose economies will grow the fastest this year. Malta is expected to show the strongest GDP growth this year, by 4.6 percent, although this is a year-on-year slowdown of 1.5 percentage points. [4]

Solid GDP growth rate in 2024 will experience countries such as Greece (2.3%), Croatia (2.6%), Cyprus (2.8%), Romania (2.9%), Poland (2.7%) or Hungary (2 .4%). However, no country within the EU (with the exception of Malta) will grow at a rate of three percent or faster this year. [5]

Overall, however, the European Union as a whole can be called the loser of 2024. It is evident from the growth estimates that large economies such as Germany, France or Italy do not have sufficient potential to shake up the economies of the entire 27 countries. Practically only small countries are growing fast, but this can largely be attributed to the fact that they are just catching up with more developed countries.

The European Union loses its breath compared to other important economic centers of the world. The United States is expected to grow by 2.7 percent this year, three times faster than the EU. Even Japan is better off (in terms of last year's GDP growth), or the same as the EU (in the case of this year's prediction). China and India do not need to be mentioned. According to the IMF, their economies will grow by 4.6 and 6.8 percent respectively this year. [6]

If the European Union wants to experience again what has graced it for many past decades, it must find the political courage to push through the deregulation of its economy in order to make the business environment more comfortable. Only in this way it can increase its attractiveness for investments, which are the only engine of long-term prosperity.

Real GDP annual changes projections for 2024

Source: European Commission, International Monetary Fund

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[1,2,3,4,5,6] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing of future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.