Investing in Europe’s prosperity

To help Member States overcome the economic and social consequences of the COVID-19 pandemic, President von der Leyen launched in May 2020 NextGenerationEU, the most ambitious financial assistance package in the EU’s history, with a total budget of over €800 billion.

Thanks to NextGenerationEU, the EU emerged stronger from the pandemic, while making our economies greener, more digital, competitive and resilient.

NextGenerationEU puts emphasis on the clean and digital transition. Payments to Member States are conditional on measurable, progressive results, which motivates authorities to deliver on the reforms and investments that they have committed to.

These reforms also play a role in complementing cohesion policy. Reforms are designed to remove bottlenecks to investments, facilitate their rollout, and address structural challenges in Member States. Thanks to our permanent dialogue with Member States, we have been able to help them with the implementation of their plans and ensure that NextGenerationEU is a continued success.

By 2027, InvestEU is geared to mobilise at least €372 billion of private and public investment in our green, digital, and social priorities, with at least 30% on climate action. The programme supports Europe’s competitiveness and helps implement flagship initiatives like the Green Deal Industrial Plan and the Strategic Technologies for Europe Platform.

As of January 2024, 175 InvestEU operations have been approved. This includes, for example:

In May 2023, Iceland and Norway joined InvestEU as first non-EU countries, strengthening our cooperation on common priorities.

Making the economic governance rules fit for purpose

In February 2024, co-legislators agreed on the most comprehensive reform of the economic governance rules since the financial crisis. The new rules will help to bring public finances back on track in a realistic and gradual manner, preserve their sustainability, and provide enough space for investment. This system ensures strong national ownership, with realistic objectives, and a greater emphasis on the medium-term.

EU State aid rules have helped Member States reach the European Green Deal objectives by providing public financing to ensure that companies carry out necessary investments at the least possible cost for taxpayers while ensuring a level playing field for businesses.

In line with the Green Deal Industrial Plan, in March 2023 we adopted a State aid Temporary Crisis and Transition Framework (TCTF), approving almost €13 billion in State aid measures to speed up financing for clean-tech production.

The new TCTF builds on the Temporary Crisis Framework, adopted in March 2022 to enable Member States to support the economy in the context of Russia's war against Ukraine. Between both frameworks, the Commission has taken over 400 decisions, approving a total aid amount of over €760 billion.

Important Projects of Common European Interest (IPCEIs) are another key tool for innovation and infrastructure projects. In recent years the Commission has approved seven IPCEIs with the participation of 22 Member States, in the strategic fields of batteries, microelectronics, hydrogen, and cloud computing. The total State aid amounts to €32.9 billion, unlocking at least an additional €50.3 billion in private investments. The Commission is cooperating with Member States on more upcoming IPCEIs in the fields of hydrogen and health.

This Commission has made unprecedented use of the possibilities offered by our trade policy tools, which has allowed us to reap the benefits of economic openness while addressing the risks of an increasingly polarised world.

Trade has remained robust thanks to a record number of trade deals (42 preferential agreements with 74 countries) and to our implementation and market access work. For example, exports of pharmaceuticals to Vietnam have increased by 152% since the entry into force of our preferential agreement in 2020; and services exports to Canada have increased by 54% since EU-Canada Comprehensive Economic and Trade Agreement started to apply in 2016.

Furthermore, thanks to more than 170 trade defence measures, we have protected 500 000 European jobs; and we have unlocked €7 billion of EU exports through breaking down trade barriers. We have also prevailed in trade disputes in defence of European businesses, for example with Türkiye, over discriminatory measures against European pharmaceuticals, or with the South African Customs Union, over disproportionate measures on frozen poultry.

This Commission has continued to work to stabilise the rules underpinning international trade by leading efforts to reform the World Trade Organization, including restoring its dispute settlement mechanism. 

Protecting our economy from security risks while standing for an open, rules-based world

We have taken action to maintain fair competition by developing trade tools to protect our interests. These include actions on foreign direct investment screening, enforcement of trade sanctions, anti-coercion, and international procurement. The Commission now has a powerful toolbox to prevent that foreign subsidies by non-EU governments to companies active in the EU distort the EU level playing field.

Furthermore, in June 2023 the Commission and the High Representative presented the first-ever European Economic Security Strategy. The Strategy identifies new risks to our economic security that have emerged as a result of increasing geopolitical tensions, geo-economic fragmentation, and technological shifts. It proposes a comprehensive approach based on protecting, promoting and partnering measures to strengthen the EU economic security.

The Strategy focuses on four categories of risk: risks to the resilience of supply chains, to the security of critical infrastructure, to technology security and technology leakage, and risks of weaponisation of economic dependencies and economic coercion.

As a first step to implement the Strategy, in October 2023 the Commission identified four technology areas that it deems critical for economic security, and encouraged Member States to carry a deepened, collective risk assessment to inform future EU actions in these areas:

• advanced semiconductor technologies
• AI technologies
• quantum technologies
• biotechnologies.

And in January 2024, the Commission presented five additional initiatives under the Economic Security Strategy which include updated rules to reinforce the screening of foreign investments, and proposals on the monitoring of outbound investments, on the effective control of exports of dual-use goods, and to improve the security of EU- and Member States-funded research programmes.

The EU Taxonomy Regulation – a classification system of sustainable economic activities – is the cornerstone of the EU’s sustainable finance agenda, guiding private investment towards our climate and environmental goals. Since 2021, the EU Taxonomy has been developed through successive Delegated Acts to encompass around 150 economic activities, covering around two thirds of greenhouse gas emissions in Europe.

The EU Taxonomy allows companies to share a common definition of economic activities that can be considered environmentally sustainable, thus helping investors to avoid greenwashing. The Taxonomy continues to be expanded to new sectors and activities, accompanied by guidance to help companies implement it. Companies are increasingly using the Taxonomy to signal their sustainability performance and commitments. For example, on average, over 20% of capital expenditure by large listed EU companies are taxonomy-aligned, meaning that these investments contribute directly to our climate goals. The utilities sector – companies that supply electricity, water, gas, etc. – is the area where we are seeing the highest capital expenditure in taxonomy-aligned activities.

The Commission also set a legal framework for a Green Bond Standard, which was agreed upon in December 2023. Funds raised by this type of bond will be 100% aligned with the high environmental standards of the EU Taxonomy. That means investors in EU Green Bonds will be able to trust that their investments are sustainable, tackling the risk of greenwashing. With over one third of global issuances taking place in euros, the EU is on track to be the world's largest issuer of green bonds.

Moreover, the Corporate Sustainability Reporting Directive, in force since the beginning of 2023, requires large and listed companies to publish regular reports on the social and environmental risks they face, and on how their activities impact people and the environment. Investors now have the information to understand the sustainability impact of the companies in which they invest.

The Commission has led the way worldwide in setting rules for previously unregulated crypto assets. Since June 2023, the Markets in Crypto-Assets Regulation brings crypto-assets and their service providers under regulation and supervision. This pioneer Regulation ensures consumer protection, market integrity, and financial stability.

The Digital Operational Resilience Act, in force since January 2023, enhances the cyber security of the financial sector in Europe and makes sure it is able to continue functioning at all times in case of operational disruption. With financial institutions depending increasingly on IT services, safeguards are necessary to mitigate cyberattacks and other risks.

The Commission put forward new rules for instant payments in euro, adopted by co-legislators in February 2024. Instant payments must be settled in no more than 10 seconds, which offers fast and convenient solutions for citizens in everyday situations, and improves cash flow management for public administrations and businesses, especially SMEs.

The Commission also adopted two proposals to keep up with the pace of change in the payments and digital services market. First, the review of the Payment Services Directive, which tackles payment fraud for consumers and helps banks and other financial companies to compete on a level playing field. Second, the Financial Data Access proposal, which sets clear rights and obligations to manage customer data sharing in the financial sector and help new companies provide innovative and convenient services to customers. We will work with co-legislators in the coming months to make progress on both files.

We also adopted proposals contributing to the global debate on the future of money: one laying down the principles for a possible future digital euro and one safeguarding the legal tender of cash. The digital euro would be a complement for physical cash, co-existing with other private means of payment.

Minimum taxation is key to addressing the challenges of a globalised economy. The EU was one of the first jurisdictions in the world to implement the unprecedented agreement reached in 2021 by 138 countries within the Organisation for Economic Co-operation and Development Inclusive Framework. We worked with Member States to ensure the adoption of the Directive enacting a minimum effective tax rate for multinationals. These ground-breaking rules came into effect on 1 January 2024, introducing a minimum rate of effective taxation of 15% for multinational companies active in EU Member States.

We must now concentrate our efforts on finalising the discussions on the other pillar of the global agreement: a fairer distribution of taxing rights among countries. Profits must be taxed where they are made.

We have also proposed key initiatives to reduce tax compliance costs for large, cross-border businesses in the EU, as well as for smaller companies. Dealing with 27 different national tax systems discourages cross-border investment and trade in the Union.

'Business in Europe: Framework for Income Taxation', will make life easier for both large businesses and tax authorities by introducing a new, single set of rules to determine the tax base of groups of companies. This will reduce compliance costs for large businesses who operate in more than one Member State and make it easier for national tax authorities to determine which taxes are rightly due.

Moreover, to boost the competitiveness of SMEs, we have proposed the creation of a Head Office Tax System for SMEs. This will make it easier for SMEs to calculate and pay taxes when operating across borders in the Single Market. The new rules will increase tax certainty and fairness and reduce compliance costs, while minimising the risk of double and over taxation for SMEs.

We have put forward the most ambitious and comprehensive reform of the EU Customs Union since its establishment in 1968.

Our reform makes the customs framework fit for a greener, more digital era, and contribute to a safer and more competitive Single Market. It will simplify customs reporting requirements for traders, for example by reducing the time needed to complete import processes and by providing one single EU interface and facilitating data re-use.

A new EU Customs Authority will oversee an EU Customs Data Hub which will act as the engine of the new system. Over time, the Data Hub will replace the existing customs IT infrastructure in EU Member States, saving them up to €2 billion a year in operating costs.

Achievements in other areas