Strengthening productivity and the Single Market
Paris
3 July 2025, 10am
Growth has been slow, and needs to be reinvigorated
Note: Data refer to the euro area member countries that are also members of the OECD (17 countries).
Source: OECD Economic Outlook: Statistics and Projections database.
Note: ECB stands for European Central Bank.
Source: Eurostat.
Note: Data refer to the euro area member countries that are also members of the OECD (17 countries).
Source: OECD Economic Outlook 117 database.
Note: Left panel: The Economic policy uncertainty index for Europe, developed by Baker, Bloom and Davis (2016), measures policy-related uncertainty by tracking print media coverage of economic policy-related uncertainty for 5 European economies (France, Germany, Italy, Spain, the United Kingdom). The indicators are standardised to show the number of standard deviations above or below their average value over the period 2007-2024. A positive (negative) value indicates high (low) systemic stress in the financial markets. Data are shown up to May 2025. Right panel: The shaded area refers to projections.
Source: OECD Economic Outlook: Statistics and Projections database; Refinitiv; and OECD calculations.
Note: Data refer to the European Union and the euro area member countries that are also members of the OECD (22 and 17 countries respectively).
Source: OECD Economic Outlook: Statistics and Projections database.
Repurposing the EU budget for new challenges
Note: Data exclude Next Generation EU and European public administration costs and refer to the whole 7-year Multiannual Financial Framework (MFF). The EU’s annual budget amounted to 0.89% of EU gross national income in 2023. In the MFF 2021-2027, the category “Other” refers to “New and Reinforced Priorities”, mainly including the “Neighbourhood, Development and International Cooperation Instrument”, “Horizon Europe”, “Just Transition Fund”, “Connecting Europe Facility”, “Single Market Programme”, “InvestEU” and “Humanitarian Aid”. In the MFF 2014-2020, the category “Other” refers mainly to funds related to “Competitiveness for Growth and Jobs”, “Global Europe” and “Security and Citizenship”. Source: European Commission; and OECD calculations.
Note: Data refer to EU financing only (excluding national co-financing). Regions are defined as “less developed” when GDP per capita is less than 75% of the EU average, as “transition” when GDP per capita is between 75% and 100% of the EU average, and as “more developed” when GDP per capita is greater than 100% of the EU average. 2021-2027 data refer to planned allocations over the whole budgetary period for the European Regional Development Fund and the European Social Fund plus. Data do not include payments to Outermost or northern sparsely populated regions and payments of Interregional funds, which form part of the European Regional Development Fund. 2014-2020 data refer to allocations over the whole budgetary period for the European Regional Development Fund and the European Social Fund.
Source: Open Data Platform for the European Structural and Investment Funds; Eurostat; and OECD calculations.
Note: Next Generation EU funds are excluded when calculating the Common Agricultural Policy’s (CAP’s) share in the EU budget.
Source: European Commission, CAP expenditure database (accessed on 28 January 2025).
Note: Labour productivity is measured as real value added per employee.
Source: Eurostat; Bureau of Economic Analysis of the United States; and OECD calculations.
Note: Intra-EU trade integration refers to import and export volumes as a share of GDP. Data refer to the EU changing members’ composition, EU27 from 2010 to 2012, EU28 from 2013 to 2019, and EU27 from 2020 to 2023.
Source: Eurostat; and OECD calculations.
Note: The Product Market Regulation indicator is a composite index that encompasses a set of indicators that measure the degree to which policies inhibit competition in areas of the product market where competition is viable.
Source: OECD Product Market Regulation database.
Source: European Commission Single Market Enforcement Taskforce Report 2022-2023; and European Commission Single Market Scoreboard.
Note: Foreign (native) born contribution indicates the absolute change in the number of foreign (native) individuals in the labour force, divided by the absolute change in the total number of individuals in the labour force. The sum of the foreign and native components equals the total labour force growth. Data refer to the labour force aged 15 and over for all countries except the United Kingdom and the United States for which data refer to the age group 16 and over.
Source:
Source: European Capital Markets Institute.
Source: Draghi (2024), The future of European competitiveness; Bureau of Economic Analysis of the United States; and OECD calculations.
Note: Semi-annual data. Left panel: Consumption from 2 500 to 4 999 kilowatt-hour. Right panel: Consumption from 500 to 1 999 megawatt-hour.
Source: Eurostat Electricity prices components for household consumers database; and Electricity prices for non-household consumers database.
Note: Consumption from 2 500 kilowatt-hour to 4 999 kilowatt-hour (band DC). “Other taxes and levies” is negative when the tax allowance’s amount is higher than the amount of the tax itself, and includes price support provided to electricity consumers to address the energy price crisis.
Source: Eurostat Electricity prices components for household consumers database.
Source: Fraunhofer Institute for Solar Energy Systems; and OECD calculations.
Macro
Fiscal
Budget
Economic policy should better support growth and make space for new spending needs, such as defence. Monetary policy should ensure price stability.
Productivity
Reprioritising and optimising EU budget spending is needed to ensure key cross-border public investment and effective support for less developed regions.
Electricity
Reducing regulatory burdens and removing internal market barriers is key to enhance innovation, business dynamism and productivity.
A more integrated market for electricity would help lower electricity costs and improve competitiveness.
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.