Contemporary EU political economy: accounts of recent steps

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Tackling energy crisis has been presently the headache for the EU and the member states’ governance. Besides, demographic changes in the EU also present problems for development. For the national political economy in modern time it is vital to improve understanding of how companies can build resilience to external challenges and crises. Finally, new vision in the European strategic crisis management is revealed and working remotely aspects as efforts in regulating “telework” in the EU.  

Tackling energy crisis
The biggest present issue is a modern energy crisis as it is closely connected to geopolitical factors, the cost of living and climate change, i.e. the factors dubbed presently as the “polycrisis’. For example, it is scientifically proved that achieving net-zero emissions is necessary to avert a climate catastrophe. In order to meet the goals of the Paris Agreement on climate change, it will require massive and transformative action across all sectors of national socio-economic fabric, including, of course big companies and SMEs as the most vital parts of growth. Wind and solar has already overtaken gas as the EU’s biggest source of electricity: wind and solar combined produced over 22 percent of electricity in 2022, overtaking fossil gas, which produced 20 percent; during 2023, due to extremely warm weather, the EU’s solar capacity grew by a record 24 percent, i.e. double the previous year’s growth.
The energy transition world-wide, according to the World Economic Forum, will require about $2 trillion investment every year; however, presently “only” $750 billion available from philanthropic capital. It means that the states’ governance and corporate entities in the world are going to be under severing press in the coming years.
Business can play a vital role during this transitional period: deeper economic and political integration in the EU after pandemic and present crises has changed dramatically existing business models. Presently, the outburst of inflation, reduced growth, households’ pressures and price hike, etc. have present national governance to “rethink” existing growth, production and business models.
As to the financial support, there is already an established permanent EU-wide fiscal capacity in the face of Next Generation EU program (NGEU), the EU’s Recovery and Resilience Facility (EURRF) and some others.
Source: Discussion paper by M. Buti and M. Messori in European Policy Center/13.02.2023 in: https://www.epc.eu/en/Publications/Resetting-the-EUs-business-mo~4e54bc; and additionally: https://www.epc.eu/content/PDF/2023/Business_Model_DP.pdf

Demographic change in the EU
The second Report on the Impact of Demographic Change in the EU, which updates the demographic trends identified during last two years, is taking into account such factors as Brexit, post-pandemic effect and migration due to Russian-Ukraine military conflict.
Concretely, the Report presents various long-term demographic trends with respect to life expectancy, mortality and migration and their impacts on population ageing, household composition, trends in the labour market, territorial cohesion and poverty and social exclusion.
In addition to the policy challenges stemming from these trends, it also identifies the benefits and opportunities these trends offer certain sectors of the economy and of society.
To address the diminishing capacity of Europe’s health workforce, national investment in the health labour force is necessary. The EU and member states must adopt a holistic approach to planning in preparation for changing demographics. In addition, more needs to be done to narrow the skills gap and prepare healthcare workers for the green and digital transition.

European strategic crisis management: new vision
European states, as well as most global countries, are confronted with an increasing number of crises with growing complexity, causing suffering and other devastating consequences. These crises included recently, e.g. the sovereign debt crisis, covid-pandemic, multiple incidents provoked by the climate catastrophe and threats arising from Russia-Ukrainian war. Improving crisis management has become an essential issue for protecting and enhancing present and future wellbeing in Europe and world-wide. It is imperative that the strategic crisis management architecture of EU institutions be fit for purpose, and that it affords the high-level political capacity to take urgent decisions under conditions of uncertainty, while maintaining public trust and countering the negative side effects of crisis mitigation measures on society as much as possible.
The role of the EU’s institutions in crisis management has expanded, from facilitating coordination and solidarity among the EU member states, to providing rapid, flexible and cross-sectoral responses.
The Scientific Advice Mechanism to the European Commission, which consists of: a) the group of Chief Scientific Advisors and SAPEA; b) the European Group on Ethics in Science and New Technologies; both are presenting policy recommendations to improve crisis management frameworks.
The common characteristics of existing and perspective threats, as well as their impact on socio-economic development, include numerous multi-risk factors which are likely to provoke cascading impacts across increasingly interconnected sectors. The speed of change and the complexity of crises are increasing, and consequent processes are more often irreversible. Focusing on the systemic approach required by the complex nature of threats and their impacts on society, this scientific opinion provides policy recommendations on how the EU can improve its strategic crisis management and could better prepare for, respond to and recover from crises. This scientific opinion informed by the SAPEA Evidence Review Report (produced in November 2022) is co-issued with a statement values in times of crisis: Strategic crisis management in the EU by The European Group on Ethics in Science and New Technologies (EGE).
Source: https://op.europa.eu/en/publication-detail/-/publication/dffc8b4b-801d-11ed-9887-01aa75ed71a1

The EU has the means to set in a synergic-motion available forces that will determine its favorable position among modern global powers: e.g. it can act for peace and promote its values, defend its interests, and influence the balance in an uncertain world. The forces that need to be set in motion are the following: youth initiatives, faith in a common future, courage, will, lucidity, confidence, education, knowledge, competence, research and innovation. These are the forces that an ambitious European Union is to use if it is to take its place and assume the status of a real power in a new century that leaves little room for the weak and the indecisive actors.
Reference to: https://www.robert-schuman.eu/en/doc/questions-d-europe/qe-658-en.pdf

SMEs: perspectives
Numerous issues are presently on the small and medium-sized enterprises, SMEs agendas, such as the businesses’ socio-economic role and place in national political economy, market dynamics and value chains. Besides, as soon as exporting direction is always preferable, within the so-called inner part of SMEs-family there are companies’ transnational dimension reflecting the SMEs external dimension and perspective resilience.
It is critical for the national political economy in modern time to improve understanding of how companies can build resilience to external challenges and crises, while at the same time generating long-term, sustainable “values” to benefit the society at large.
Many big companies and corporations have adopted “mitigating plans”; however, numerous small and medium-sized enterprises, which account for about 90% of all companies worldwide and play a crucial role in national socio-economic development any economy – can also take part in new “transformative and sustainable growth”.
According to the Organisation for Economic Co-operation and Development, the notion of SMEs includes various companies’ sizes – from firms with fewer than 250 employees; in the EU, in terms of annual revenue, the SMEs are companies with less than €50 million (the separate category of “micro” enterprises usually includes those with fewer than 10 employees).
Source: https://intelligence.weforum.org/topics/a1G680000004EIBEA2?tab=publications&utm_source=sfmc&utm_medium=email&utm_campaign=2791314_Agenda_weekly-16December2022&utm_term=&emailType=Agenda%20Weekly

     Entrepreneurship requires dedicated people and organizations, and an enabling context for innovating and developing new companies. Entrepreneurial ventures typically go through several stages of lifecycle development, a process that most often requires some type of external financing and can usually only succeed in supportive environments. This applies not only to startups, but also to corporate and public sector initiatives, as well as social entrepreneurship. Entrepreneurial activity is always essential for broader economic growth and development, though its specific role has shifted depending on era and location.
More in: https://intelligence.weforum.org/topics/a1Gb0000000LGqtEAG

Working remotely: efforts in regulating “telework” in the EU
Recent changes to regulations imply the perspectives of future telework at national and EU level, in order to improve working conditions in telework arrangements and reduce the risks associated with telework and with specific ways of working remotely. The EU legislation includes also collective agreements.
It will outline key provisions such as regulatory definitions of telework (including mobile work, home-based telework and hybrid work); organisation of working time; the right to request telework; the right to disconnect; provision of equipment for working remotely; protection against psychosocial risks such as isolation; and measures to protect collective rights.

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