Progress report on the Europe 2020 strategy.

Abstract

In 2010, the European Council agreed on a comprehensive response to the challenges that Europe is currently facing: the Europe 2020 strategy. In the current climate, this strategy has become more relevant than ever. GDP in the EU grew in the first quarter of 2011, but has slowed down substantially since then. Economic growth is now expected to come to a virtual standstill towards the end of the year.1 In the euro area, this is exacerbated by the continuing sovereign debt crisis and remaining fragilities in the banking sector. In this situation, households and businesses lack confidence and therefore hold back on consumption and investments. In addition, with strained public finances, there is very limited room for further expansionary fiscal policy to boost growth.