Macroeconomic dialogue with the social partners on 8 November 2023

The Council presidency, the European Central Bank and the European Commission met European social partners on 8 November 2023 to discuss recent developments of the economic situation, as well as a thematic topic chosen by the presidency, “upskilling and reskilling needs for the green and digital transition”. As 2023 is the European Year of Skills, this topic is particularly relevant at a time of accelerated change driven by digitalisation and artificial intelligence, the challenges and opportunities of the green transition and the structural transformation of the European industry calling for reallocation of production factors across sectors. During the discussion, social partners were asked to provide their views on the topic and how the skills gap should be addressed both at EU and national levels.

The unstoppable evolution of technology, together with environmental and geopolitical challenges, is having a profound impact on workers, companies and the European economy. Citizens must acquire the necessary skills to access the job market of the new economy and maintain their competitive edge. Governments, along with social partners and the private sector, need to intensify their partnerships to guarantee that upskilling opportunities are available to everyone. We need to make sure nobody is left behind.

Nadia Calviño, Spanish Vice-President and Minister for Economy and Digitalisation which currently holds the presidency of the Council

We are going through a period of major transformations – green, digital, technological and demographic. Labour shortages and skills gaps are holding back our economies and societies. This is weakening Europe’s competitiveness and impeding workers from advancing in their careers and their personal lives. We have to renew and adapt our labour market policies, putting skills and adequate working conditions first. To succeed in creating quality jobs and inclusive growth, we need the continued cooperation of the EU, member states, social partners, businesses and workers.

Nicolas Schmit, Commissioner for Jobs and Social Rights, European Commission

Today’s macroeconomic dialogue meeting was very beneficial and timely. I place great value on hearing directly from the social partners as the Eurogroup is preparing a statement on budgetary policy for 2024. We discussed a number of issues, including the economic outlook, the European labour market and related economic policy matters. We come from a period of strong labour market performance which has been at the centre of the euro area’s economic resilience. The special focus of today’s discussion on upskilling and reskilling for the green and digital transitions is very relevant in view of the Eurogroup’s work on the future of European capital and financial markets and on the long-term challenges to the competitiveness of our economies.

Paschal Donohoe, President of the Eurogroup

Europe cannot afford austerity 2.0. We know from experience that austerity is bad for people and bad for the economy. And we know that repeating the experiment will prevent us from making the investments needed to move to a green economy in a socially just way. We must learn the lessons of the past to protect our future. The ETUC supports a reform of the EU’s fiscal rules, but we need to take the time to get it right. That’s why we are calling for the prolongation of the general escape clause until the end of 2024. The new economic rules must put the wellbeing of people and the planet above arbitrary targets. Europe’s response to inflation also risks taking us towards another damaging recession. EU data shows inflation has been driven primary by increased profit margins and not wages. Rather than further squeezing working people, who are the first victims of this crisis, it’s time to take action over its real cause through windfall taxes.

Esther Lynch, General Secretary of the European Trade Union Confederation (ETUC)

The European economy is growing even more sluggishly in the first half of 2023 as EU businesses were faced with the impact of higher interest rates, a slowing global economy, and increasing long-term competitiveness challenges. Higher interest rates, and increased credit standards have dampened much-needed investment and are weighing on consumers’ disposable income but there are two structural reasons explaining why Europe is lagging behind other continents. Energy prices are still significantly above their long-term average and the regulatory burden remains significantly higher in Europe. European institutions need to deliver before the European elections on their promises to reduce this burden, starting with the reduction of reporting requirements by 25%.

Thérèse de Liedekerke, Deputy Director General of BusinessEurope

Today, services of general interest face extreme pressures that threaten their ability to fulfil their missions, to invest, and to anticipate the impacts of climate change and digitalisation. Addressing labour shortages must be placed on equal footing with the investment needs. Giving a fresh impetus to lifelong learning, empowering people and enterprises and supporting innovation and competitiveness must be at the heart of our action. To unlock investments, SGI Europe further calls for the co-legislators to find an agreement on the economic governance review before the EU elections and for the new rules to focus on debt sustainability, to move away from unidimensional debt reduction and to boost productive green, digital and social investments.

Valeria Ronzitti, General Secretary of SGI Europe

The SME barometer shows that high inflation rates, combined with high interest rates and wage increases, create economic concerns for SMEs in Europe. Therefore, policy focus has to be put on price stability and measures to mitigate inflation must also take into account structural effects from commodity markets and the green transition. At the same time, it has to be clear that price increases caused by external shocks cannot be fully compensated by wage increases without creating additional inflation. The pressure due to labour shortages, should be overcome by targeted measures on activating working age population, facilitating intra-EU mobility and market responsive economic migration.

Véronique Willems, SMEunited Secretary General

Upskilling and reskilling for the green and digital transition not only have big challenges to overcome but also create new chances and opportunities.

Steven F.M.C. Costers, General Counsellor, Federal Public Service Finance (upcoming Belgian Presidency: January-June 2024)

Although the Hungarian labour market has remained remarkably stable amid the adverse economic environment, the EU-wide challenge of labour shortage calls for timely and effective action. As one of the priorities of the 2024 Hungarian presidency, we aim to strengthen the competitiveness and productivity of the European economies. We are convinced that our joint endeavours could constitute a solid basis for a long-lasting solution in the field of employment.

Gábor Szőcs, Deputy State Secretary for Macroeconomic and European Affairs (future Hungarian Presidency: July-December 2024)

The next macroeconomic dialogue will be organised under the Belgian presidency.