The highest EU annual inflation rates were recorded in Czechia and Hungary

Politics

On 1 January 2024, Belgium took over (from Spain for six months) the Presidency of the Council of the EU. The main priorities of the Belgian Presidency will be defending the rule of law, democracy, and unity, strengthening the competitiveness, pursuing a green and just transition, reinforcing social and health agenda, protecting people and borders and promoting a global Europe.

The Schengen area of free movement of persons in the EU will be expanded to include Romania and Bulgaria, the EU countries have agreed. At the end of March 2024, checks on the internal air and sea borders of these countries will thus be eliminated. A decision on the abolition of ground controls is to be taken at a later date.

Europe has reached an agreement on the Artificial Intelligence Act. It is based on a risk assessment approach: the higher the risk, the stricter the rules. For AI systems that pose only a limited risk, mild transparency obligations will apply, such as the obligation to state that content has been generated by AI. On the contrary, for high-risk systems, there will be a number of requirements and obligations that will have to be fulfilled in order to enter the EU market. The regulation will start to apply two years after it comes into force.

A forthcoming European regulation, which was agreed upon by ministers of the environment of the EU Member States, intends to ban single-use plastic bags for food and beverages consumed in restaurants and cafes, as well as single-use packaging and bags for fruit and vegetables. The plan is also to significantly reduce miniature hotel shampoo packaging and shrink wrap for suitcases at airports.

For the first time in history, world leaders have agreed on the need to move away from fossil fuels. This happened at the COP28 world conference on climate change in Dubai, although a stricter call for an "end to fossil fuels" failed to be enforced. All parties also committed to triple global renewable energy capacity and double the pace of energy efficiency improvements by 2030.

Economy

In the third quarter of 2023, seasonally adjusted GDP remained stable in the EU, compared with the previous quarter and also with the same quarter of the previous year. Malta (+2.4%) recorded the highest increase of GDP compared to the previous quarter, followed by Poland (+1.5%). The highest decreases were observed in Ireland (-1.9%), Estonia (-1.3%) and Finland (-0.9%).

EU annual inflation was 3.1% in November 2023, down from 3.6% in October. A year earlier, the rate was 11.1%. The lowest annual rates were registered in Belgium (-0.8%) and Denmark (0.3%). The highest annual rates were recorded in Czechia (8.0%) and Hungary (7.7%). Compared with October, annual inflation fell in twenty-one Member States, remained stable in three and rose in three.

In the third quarter of 2023 the hourly labour costs rose by 5.7% in the EU, compared with the same quarter of the previous year. Hourly labour cost grew by 4.8% in the (mainly) non-business economy and by 6.1% in the business economy: +6.2% in industry, +6.4 % in construction and +6.0% in services. The highest increases were recorded in Croatia (+16.2%) and Bulgaria (+15.8%).

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