One year after Russia’s war of aggression against Ukraine began, the EU economy is on a better footing than projected. Supported by the disbursement of funds from the Recovery and Resilience Facility and a swift and coordinated shift away from Russian gases and fuels, the EU successfully doubled down on the implementation of the EU Green Deal.
However, headwinds remain strong: consumers and enterprises continue to face high energy costs, and core inflation (headline inflation excluding energy and unprocessed food) was still rising early in 2023, further eroding households' purchasing power. In this context, monetary tightening is set to continue, weighing on business activity and exerting a drag on investment, especially for providers of services of general interest in the middle of the green and digital transition.
Surveyed in the first two months of 2023, SGI enterprises highlighted the following key concerns regarding the present and the future:
- Economic uncertainty: the energy prices crisis, and the consequent high inflation faced since the onset of the Russian war in Ukraine, has put a renewed financial pressure on SGIs, while reigniting social tensions and protests’ movements.
- Continued provision of services: faced with increasing budget constraints, enterprises of services of general interest need to balance the need to invest in the twin transition, while continuing to provide high-quality, affordable and accessible services to all citizens and companies.
- Skills and labour shortages: as the green and digital transition is transforming the world of work, SGIs in many sectors currently face significant issues to address labour shortages and fill vacancies with staff equipped with the appropriate skillsets.
- Regulatory framework: the twin transition, and its acceleration stemming from the EU answer to the Russian invasion of Ukraine, is dramatically transforming the regulatory framework. The upcoming deactivation of the General Escape Clause of the Stability and Growth, the State aid Temporary Crisis and Transition Framework and the Green Deal Industrial Plan will transform the EU economy and society. SGIs will be at the heart of this transformation, and regulatory certainty and alignment will have to be safeguarded.
- Lack of involvement of SGIs in shaping and implementing the National Recovery and Resilience Plans (NRRPs): considering the transformational potential of the Recovery and Resilience Facility (RRF) and the NRRPs prepared by national governments, local and regional actors, including SGI providers, have reported a lack of involvement in shaping and implementing the NRRPs, putting at risk the actual delivery on the objectives set by the RRF
