The EU in

2023
GENERAL REPORT ON THE ACTIVITIES OF
THE EUROPEAN UNION
 On the cover

4
3

6
5

1. On 9 May 2023, Europe Day, 4. (© Adobe Stock) 7. Many survivors of the earthquake
Ursula von der Leyen, President in Türkiye are struggling
5. Charles Michel, President of
of the European Commission to overcome the related
the European Council, chaired
(left), travelled to Kyiv, Ukraine, psychological trauma. With the
a European Council meeting
where she met with Volodymyr support of EU humanitarian aid,
on 14 and 15 December 2023
Zelenskyy, President of Ukraine UNICEF has set up hubs across
in Brussels, Belgium. At this
(right). the affected areas where children
meeting, EU leaders gathered to
and their caregivers can attend
2. On 9 August 2023, Ursula von discuss the unfolding situation
psychosocial support sessions.
der Leyen, President of the in the Middle East, continued
The hubs offer children a safe
European Commission, travelled support for Ukraine in the face
space to learn, play and heal.
to Ljubljana, Slovenia, to express of Russia’s war of aggression,
August 2023.
her solidarity and witness the the EU’s long-term budget,
destruction caused by the floods enlargement, security and
that hit the country. defence, and external relations.
3. Christine Lagarde, President of 6. Ursula von der Leyen, President
the European Central Bank (left), of the European Commission
welcomes Roberta Metsola, (second from left), Jens
President of the European Stoltenberg, Secretary General
Parliament (right), at the of NATO (third from left), and
ceremony marking the 25th Jonas Gahr Støre, Prime Minister
anniversary of the European of Norway (left), on a visit to
Central Bank, Frankfurt, one of the Norwegian company
Germany, 24 May 2023. (© AFP) Equinor’s natural gas extraction
platforms located off the west
coast of Norway, 17 March 2023.
The EU in 2023
GENERAL REPORT ON THE ACTIVITIES
OF THE EUROPEAN UNION
Published in accordance with Article 249(2)
of the Treaty on the Functioning of the European Union
An interactive version of this publication, containing links to online content, is available in PDF
and HTML format: https://europa.eu/general-report/en.

The EU in 2023 – General Report on the Activities of the European Union

European Commission
Directorate-General for Communication
Editorial Service & Targeted Outreach
1049 Brussels
BELGIUM

The EU in 2023 – General Report on the Activities of the European Union was adopted by the European
Commission on 7 March 2024 under reference number C(2024) 1633.

Print ISBN 978-92-68-11583-1 ISSN 1608-7321 doi:10.2775/049045  NA-AD-24-001-EN-C

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 3

Foreword
2023 was an important year – one in which the European
Union continued to meet the aspirations of EU citizens and
to address challenges as they emerged. We stayed the
course on the six priorities we set out at the beginning of
the mandate, while finding bold and ambitious solutions to
some of the greatest tests that Europe has ever faced.

From responding to Russia’s brutal war of aggression

against Ukraine to managing the worst energy crisis in
decades, and from responding to the lightning-speed
development of artificial intelligence (AI) to addressing
a deepening climate crisis, we rolled up our sleeves and
tackled extraordinary challenges head-on. We have shown
that our Union is at its best when we are bold.
Ursula von der Leyen
President of the For the second year in a row, Europe stood up for Ukraine,
European Commission with unity, strength and resolve, every step of the way. We
paved the way for hosting more than 4 million Ukrainian
refugees in the European Union and organised resolute
financial, humanitarian and military assistance – reaching
over €88 billion so far. And we have shown that we will
stand by Ukraine for as long as it takes. Through the new
Ukraine Facility, we will deliver another €50 billion over
the next 4 years, to help provide basic services – keep
schools open, pay salaries and pensions – while Ukraine’s
people continue to fight back against the invader. 2023 will
remain engraved in the memories of Ukrainian people as
the year when their dreams came closer to coming true.
 4
T H E E U I N 2023

Recognising Ukraine’s tremendous progress and responding

to the aspirations of the Ukrainian people, our Union took
the historic decision to open accession negotiations with the
country, based on the Commission’s recommendation.

At the same time, our Union persevered with the

transformation of our economy. First, it has driven forward
digitalisation. Our European Chips Act has already generated
over €100 billion of planned investment – both public and
private – along the entire value chain. And with our Artificial
Intelligence Act, Europe became the first continent to have a
dedicated AI regulation in place, focused on high-risk uses.
More than a rulebook, it is a springboard for our companies
to lead the way in developing trustworthy AI.

Our Union has also pushed forward the transition to a

clean economy. We put in place a framework to deliver
a reduction of at least 55 % in carbon dioxide emissions
by the end of this decade, and thus to keep Europe on
track to becoming climate neutral by 2050. Also, with our
Net-Zero Industry Act, we are bolstering the EU’s clean-
energy manufacturing capacity, to boost our industrial
competitiveness and resilience. We will support European
businesses in delivering the transition while maintaining
their competitive edge, so that Europe remains a prime
destination for investment that brings stable, future-proof
quality jobs, with a strong industrial base.
 5

To adapt to shifting geopolitical realities, Europe set out

its first-ever strategy on economic security. We also took
concrete steps to increase our resilience by reducing
dependencies and de-risking our economy. This will ensure
our sovereignty, security and prosperity for the years to
come. This aim is also supported by our NextGenerationEU
recovery plan, worth more than €800 billion, which is
propelling our economies with a combination of investment
and reforms. It has continued to fund hundreds of green
and digital projects in Europe, delivering tangible results
for Europeans – from offshore wind farms to electric
trains, from top-notch digital public services to world-class
hospitals.

Looking ahead, 2024 will be a special time for our

continent, as Europeans head to the polls to elect a new
generation of leaders. It will be an opportunity to reflect
on how democracy delivers to make our societies fairer,
our industries more competitive and our economies more
resilient. I am confident that our Union will continue to
stand tall. Because Europe is always strongest when the
challenges are great.

Long live Europe!

Ursula von der Leyen

 6
T H E E U I N 2023

Contents
 7

1. The EU’s response to Russia’s

war of aggression against 6. Building a fair and social
Europe – 96
Ukraine – 8

2. Strengthening the economy and

the EU’s competitiveness – 23 7. Protecting people and
freedoms – 113

3. Creating a climate-neutral and

prosperous Europe – 48 8. Promoting European interests
and values in the world – 130

4. Ensuring affordable, secure

and sustainable energy for 9. Institutional developments and
strengthening democracy – 150
Europe – 68

5. A Europe fit for the digital

age – 79
 8
T H E E U I N 2023

1. The EU’s
response to Russia’s
war of aggression
against Ukraine
Introduction Russian troops attempted to interrogate Oksana regarding her
grandson, a Ukrainian soldier. Once they withdrew, her home was
Russia’s war of aggression against Ukraine is a destroyed by artillery fire. EU humanitarian funding is helping
threat to the very essence of democracy, and people like Oksana by providing them with food, water, essential
reminds the global community of the dangers of household items, healthcare, including mental health and
authoritarianism. The European Union’s unwavering psychosocial support, and emergency shelter. 21 March 2023.
support for Ukraine is more than solidarity with a
neighbouring country in the face of an unlawful and chapter shows the various ways in which the EU
unjustified invasion; it reflects a shared commitment stands by Ukraine, which include providing financial,
to democratic principles and to the safeguarding civil protection and humanitarian aid; countering
of the rules-based international order and peace disinformation; welcoming Ukrainian refugees;
in Europe. In 2023, the EU continued to provide military assistance and training; assisting in Ukraine’s
support to Ukraine in the face of Russia’s unprovoked defence and reconstruction; and ensuring that Russia
and unjustified war of aggression and its illegal faces consequences for its crimes through sanctions
annexation of parts of Ukrainian territory. This and prosecution.
 9

Solidarity with Ukraine

GENERAL REPORT
Financial assistance and military the country carry out institutional reforms, such as
anti-corruption and judicial reforms.
support
The combined military assistance provided to Ukraine
By the end of 2023, the EU and its Member States by the EU and its Member States to date amounts to
had made available close to €85 billion in overall more than €27 billion, including €5.6 billion allocated
assistance to Ukraine and its people since the start via the European Peace Facility. This includes
of Russia’s war of aggression. This includes, in the joint procurement and immediate delivery of
particular, €25.2 billion of macro-financial assistance, ammunition to Ukraine agreed in March 2023,
including a support package of €18 billion for with about 313 600 rounds of ammunition and
Ukraine in 2023 through the Macro-Financial 3 315 missiles delivered at the end of the year.
Assistance Plus instrument. Macro-financial The European Peace Facility is also contributing
assistance is a type of financial aid provided by the to enhancing the capabilities of the Ukrainian
EU to help partner countries facing serious financial Armed Forces through the EU Military Assistance
difficulties stabilise their economies and make Mission in Support of Ukraine, with an allocation
necessary reforms. These funds are helping Ukraine of €362 million managed by the Council of the
to continue to pay wages and pensions; to keep European Union. The bulk of the remaining military
essential public services running, such as hospitals, assistance to Ukraine is provided and financed
schools, and houses for relocated people; and to bilaterally by Member States.
restore critical infrastructure. They are also helping

The European Commission’s meeting with

the Ukrainian government in Kyiv, Ukraine,
2 February 2023.
10

Military support In response to the Council’s urgent call to deliver

T H E E U I N 2023

ammunition to Ukraine, the Commission proposed

The European Peace Facility is an instrument
the Act in Support of Ammunition Production in May
that is used to finance external action that
2023. Adopted in July, the act aims to strengthen
has military or defence implications. It also
the responsiveness of the EU defence industry and
enables the provision of assistance to partner
its ability to ensure the timely supply of ammunition
countries in peacekeeping operations. It is
and missiles in Europe. The Commission allocated
funded by the Member States.
€500 million for this purpose, using grants to be
The facility has had a central role in providing issued in 2024 to enhance and expedite production.
military support to Ukraine. Since the start of (See Chapter 8 for details on the EU’s enhanced
Russia’s unprovoked and unjustified military defence capabilities.)
aggression against Ukraine, the EU has
The abovementioned total of almost €85 billion
adopted seven support packages through this
also includes €17 billion made available to Member
instrument. The support takes the form of
States to host and support refugees. The EU is
deliveries of defensive military equipment to
providing temporary protection to almost 4.2 million
the Ukrainian Armed Forces, along with the
Ukrainian refugees currently living in the EU.
three-track ammunition initiative to support
the Ukrainian Armed Forces, for a total The EU, along with its Member States, has also
amount of €5.6 billion. committed around €3 billion for humanitarian aid in
Ukraine. Of this amount, the Commission has directly
Through the facility, the EU is also funding
provided around €800 million. (See the section
the training of the Ukrainian Armed Forces
‘Humanitarian and civil protection aid for Ukraine’
via the EU Military Assistance Mission, which
below for more details.)
has headquarters in Poland and Germany. For
the first time in its history, therefore, the EU is
providing military training to a country at war.
By the end of 2023, the mission had trained
around 39 000 Ukrainian soldiers.

Volodymyr Zelenskyy, President of Ukraine

(foreground, right), and Josep Borrell, High
Representative of the Union for Foreign
Affairs and Security Policy and Vice-
President of the European Commission in
charge of a Stronger Europe in the World
(foreground, left), ahead of a round-table
meeting at the Special European Council in
© AFP
Brussels, Belgium, 9 February 2023.
 11

In June, Ukraine was given access to the EU’s significant efforts it has made to align with EU

GENERAL REPORT
programme for infrastructure funding, the standards (see Chapter 8).
Connecting Europe Facility. This means that Ukraine
Finally, the EU also supported Ukraine’s neighbours
can now apply for EU funding for infrastructure
throughout the year, particularly Moldova, which
projects that will improve its energy, transport and
received €58 million of humanitarian assistance, an
digital connections with the EU. 2023 also saw
increase in macro-financial assistance and access to
the historic decision by the EU to open accession
the EU’s programme for infrastructure funding.
negotiations with Ukraine, acknowledging the

• 89 % of people in the EU agree that the EU should

continue to provide humanitarian support to the people
affected by the war in Ukraine.

• 85 % of people in the EU • 79 % of people in the EU

agree that Russia’s invasion of agree that Russia’s invasion of
Ukraine shows the EU needs to Ukraine shows the EU needs to
ensure its energy and economic increase military cooperation
security. between Member States.

• 77 % of people in the EU • 71 % of people in the

agree that the Russian authorities EU agree that the EU should
should be held accountable for continue to show solidarity with
the current situation in Ukraine. Ukraine.

Sources: Flash Eurobarometer 533, September 2023; Standard Eurobarometer 100, December 2023.
12

EU sanctions
T H E E U I N 2023

In addition to financial aid and other tangible support being to weaken Russia’s economic capacity and limit
for Ukraine and its people, the EU has imposed its ability to finance its war of aggression. In this
unprecedented and far-reaching sanctions against sense, sanctions fulfil the EU’s key objective, which
Russia in response to its war of aggression against is to continue to work for a just and lasting peace.
Ukraine. Since 23 February 2022, the EU has imposed a total
of 12 sanctions packages against Russia. They target
Sanctions are one of the EU’s instruments in
not only specific people and entities, but also the
response to this unjust and illegal war, with the aim
financial, industrial, transport and energy sectors.

In February and June 2023, the EU adopted its 10th and 11th packages of sanctions against Russia.
These added 225 individuals and entities to the EU’s sanctions list. The additional measures included
new bans on exporting critical technology and industrial goods to Russia, particularly technology with
potential military applications. Furthermore, these packages targeted additional Russian sources of
disinformation, expanded the list of prohibited imports from the country and introduced measures to
prevent the circumvention of these sanctions, including efforts for greater cooperation with key non-EU
countries to better monitor, control and block re-exports.
The 12th and most recent sanctions package was adopted on 18 December, and added another
140 individuals and companies to the sanctions list. New import and export bans – such as a ban on
the export of Russian diamonds to the EU – were also established, and will be carried out in close
cooperation with the G7 partners. Moreover, the package strengthened the implementation of the oil
price cap by introducing new measures to better monitor how tankers are being used to circumvent
the cap. It also included stricter asset-tracing obligations and tough measures on non-EU companies
circumventing sanctions.

Together with its partners, the EU has agreed depreciating rouble, increasing inflation and a tight
a priority list of sanctioned battlefield goods. labour market reflecting a loss of workers. The rouble
Businesses should apply due diligence to these has lost about 40 % of its value from its peak in
goods, and non-EU countries must not export summer 2022, which has forced the Russian central
them to Russia. In addition, the EU has identified bank to raise its interest rates from 8 % to 16 % and
economically critical goods that are experiencing to strengthen capital controls. Budget revenues from
anomalous trade flows. These goods have been oil and gas fell by 40 % in 2023 thanks to the oil
tracked moving to Russia via certain non-EU price cap agreed with the G7 partners. This effect will
countries. only intensify over time, as the measures have been
designed to have a long-term impact on Russia’s
Asset-freezing measures are one of the most visible
budget and on its industrial and technological base.
and politically important types of sanction. In total,
almost 1 950 entities and individuals are currently Sanctions are also being imposed on Russia’s ally,
subject to restrictive measures, and over €28 billion Belarus. On 3 August 2023, the Council adopted a
of assets belonging to Russian and Belarusian seventh package of sanctions in response to human
oligarchs and companies have been frozen. Member rights violations and the repression of civil society
States have also reported over €200 billion of frozen within the country. The EU is not imposing blanket
Russian central bank assets in the EU. sanctions on the entire country, but instead targeting
strategic sectors of the Belarusian economy, such
The war itself, and restrictive measures, are putting
as the arms trade, the trade in technologies with
Russia’s economy under considerable strain, as they
potential military use and the trade in goods used in
are contributing to rapidly growing expenditure, a
the aviation and space industries.
 13

Countering disinformation Targeted social media communications and

GENERAL REPORT
campaigns to debunk Russian disinformation on
Through its state-owned news outlets and affiliated sanctions and on food and energy security continued
channels, Russia disseminates skewed information in 2023. Finally, to make sure displaced people from
and war propaganda, attempting to rationalise its Ukraine are aware of their rights, the Commission
aggressive actions against Ukraine and shift blame carried out an awareness-raising campaign on the
onto Ukraine and the West. To counter this, the EU importance of using official sources of information.
supports Ukraine’s outreach towards global partners,
including in international forums and discussions.
The EU acts on many levels to reach as many people Humanitarian and civil protection
as possible, supporting government institutions, civil
society, media organisations and online platforms
aid for Ukraine
in line with the updated Code of Practice on EU civil protection and humanitarian funding helps
Disinformation. people inside Ukraine through multiple forms of
support. In total, this help is worth around €1.6 billion
As part of the sanctions against Russia, the EU has
(around €800 million in humanitarian aid and
suspended the broadcasting activities of numerous
€800 million in civil protection in-kind offers). The
Russian state-owned and pro-Kremlin disinformation
humanitarian aid includes providing food, water,
outlets. More generally, 2023 marked a step change
essential household items, healthcare, mental health
in the fight against disinformation in the EU. With the
and psychosocial support, and emergency shelter.
entry into force of the Digital Services Act, providers
The EU’s aid to Ukraine also includes helping young
of very large online platforms and of very large
Ukrainians continue their education and delivering
online search engines need to routinely evaluate any
cash assistance to help cover basic needs. The EU
potential societal risks posed by their services. These
coordinates its humanitarian and development aid
include threats to freedom of expression and the risk
through a nexus approach, ensuring not only that
of their services being used for disinformation
it addresses immediate needs, but also that it is
campaigns.
sustainable in the long run.
In July, the Commission launched a call for proposals
Psychosocial support is extended to displaced
worth €1.2 million for projects that can decipher how
people in the Member States via the EU4Health
disinformation narratives on Russia’s war against
programme and, in large part, with the collaboration
Ukraine, elections and the LGBTIQ community
of the International Federation of Red Cross and Red
emerge online and offline, and how to tackle them
Crescent Societies. In addition, the EU is coordinating
once they do. These projects will form part of the
medical evacuations of Ukrainian patients in urgent
wider efforts to fight disinformation, such as the
need of treatment, transferring them to hospitals
EUvsDisinfo platform and the Rapid Alert System.
across Europe to receive specialised care. Almost
3 000 patients needing medical evacuation were
successfully transferred to 22 Member States or
European Economic Area countries between March
2022 and 19 December 2023.

P O D C A S T Listen
to or read this
article published by
EUvsDisinfo on the way
Russia twists the truth.
14
EU humanitarian funding to Ukraine in
2023 by sector
Other 5 % Action on landmines 2 %

Food and basic needs 5 %

Water, sanitation Shelter 27 %

and hygiene 8 %
T H E E U I N 2023

Protection 9 %

Health 10 %
Cash assistance 24 %

Education during emergencies 10 %

Through its Emergency Response Coordination

Centre, the EU is coordinating its largest-ever civil
protection operation to provide emergency assistance
to people in need (see Chapter 8).
All 27 Member States, along with Iceland, North
Macedonia, Norway, Serbia and Türkiye, have offered
in-kind assistance through the EU Civil Protection
Mechanism, ranging from medical supplies, shelter
items and vehicles to firefighting and energy
equipment. To channel these emergency items to
Ukraine, the EU has opened additional logistical hubs
in Poland, Romania and Slovakia. By the end of 2023,
almost 100 000 tonnes of such assistance had been
delivered to Ukraine.

© Litgrid

Russia is targeting Ukraine’s energy infrastructure. To power

Ukrainian services and provide heating amidst freezing winter
temperatures, the EU has donated more than 5 500 power
generators and over 6 million pieces of electrical equipment. This
transformer, worth more than €2 million, was offered by Litgrid, a
Lithuanian electricity company, and is part of the biggest logistics
operation coordinated under the EU Civil Protection Mechanism.
© Litgrid
24 January 2023.
 15

The EU has also deployed assistance from its Additionally, water treatment stations were

GENERAL REPORT
rescEU stockpiles. rescEU is a reserve of European dispatched in response to the Nova Kakhovka dam
capacities, fully funded by the EU. It includes a breach, while specialised equipment – such as
fleet of firefighting planes and helicopters, medical decontaminants, protection suits and iodine pills –
evacuation planes and a stockpile of medical items was supplied in response to public health risks, such
and field hospitals that can respond to emergencies. as chemical, biological, radiological and nuclear
For Ukraine, the EU has deployed power generators, threats.
medical equipment and temporary shelter units.

To help Ukrainian children

return to school, the EU
launched the campaign
‘School buses for Ukraine’ in
December 2022. As a result,
more than 380 buses were
sent to Ukraine by the EU
and its Member States.

A bus donated by the city of Luxembourg

leaving the EU Civil Protection Mechanism’s
logistic hub, Suceava, Romania, July 2023.

Welcoming those fleeing the war

Russia’s unprovoked and unjustified war of Ukraine enjoyed the right to residence, housing,
aggression against Ukraine triggered the largest healthcare, education and work in the EU. In October,
forced displacement of people in Europe since the this temporary protection was extended until
Second World War. To protect the rights of people March 2025. The Solidarity Platform helped Member
fleeing to the EU from Ukraine, the EU swiftly States to coordinate the reception of refugees
introduced the Temporary Protection Directive. By from Ukraine, and continues to help implement the
the end of 2023, almost 4.2 million people from directive.
16 6 April 2022
issued a recommendation on
4 March 2022 the quick, fair and flexible
activated temporary recognition of qualifications
protection measures
to help people fleeing 6 July 2022
the war provided guidance under the
Safe Homes initiative to support
14 June 2022 hosts and hosted people
issued guidance to
facilitate access to jobs,
training and adult
learning in the EU
T H E E U I N 2023

10 October 2022
launched the EU 4 March 2023
Talent Pool Pilot offered protection to
online tool to help 4 million people in the
To protect people search for EU, including more than
700 000 students
jobs in the EU
Ukrainians,
the EU:

Ensuring swift and effective integration into the The EU is also dedicated to ensuring access to high-
labour market is another important way in which quality education for displaced Ukrainian children.
the EU welcomes those fleeing the armed conflict. It has mobilised several tools, mainly under the
Measures adopted under the cohesion policy in European Education Area strategic framework, such
2022, such as the Cohesion’s Action for Refugees as policy guidance on peer learning, online platforms
in Europe and Flexible Assistance to Territories and funding. The Erasmus+ funding programme is
packages, introduced the necessary flexibility in the also being used to support the education of refugee
cohesion-policy funding rules to ensure that Member students. Higher education is further supported
States could use this funding to welcome refugees through the MSCA4Ukraine fellowship scheme.
from Ukraine. In 2023, these measures continued to Thanks to the funding and support provided by
allow funding to be allocated to social integration this initiative, by the end of 2023, 124 Ukrainian
programmes, healthcare, food, basic assistance researchers had been able to continue their work in
and orientation for the job market. The latter area the EU and in various non-EU countries that are part
includes language courses, education, social services of the Horizon Europe programme.
and childcare. Employment helps people rebuild their
In addition, the Commission has launched three
lives, develop their skills, contribute to their host
new initiatives to boost the EU’s cooperation on
communities and, eventually, support reconstruction
research and innovation with Ukraine: a new Horizon
in Ukraine.
Europe office in Kyiv; the new European Innovation
Council initiative to support the Ukrainian deep
More than 1.5 million Ukrainians tech community; and a new European Institute of
Innovation and Technology community hub.
are now working in the EU.
Lastly, the EU knows the value of cultural expression
Source: European Network of Public Employment Services survey. in helping people process traumatic events and
The EU is helping Ukrainians integrate into the labour in creating a sense of community and mutual
market by allowing for the swift validation of skills understanding. In 2022, the EU’s Creative Europe
and the recognition of professional and academic programme launched a call for projects that would
qualifications. It has set up the EU Talent Pool Pilot, support artists and cultural organisations outside of
an online job-searching tool that matches people Ukraine. In May 2023, the winners were announced:
who have fled the war in Ukraine with suitable jobs the ZMINA, Culture Helps and U-RE-HERIT consortia
and vacancies. In addition, Member States’ public will support Ukrainian artists and contribute to the
employment services connect jobseekers with reconstruction of Ukraine’s cultural heritage.
employers at the national level. In July, the European
Network of Public Employment Services adopted
common guidelines to further support labour market
integration.
 17

Integration into the Single Market and other agreements

GENERAL REPORT
In April 2023, Ukraine joined the EU Civil Protection Ukraine has been further integrated into the
Mechanism as a participating state. In August, while EU’s Single Market by joining the Single Market
still in the process of formal accession to the Programme, signing an association agreement at
mechanism, Ukraine contributed 51 first responders a meeting between the European Commissioners
and 19 vehicles to assist in rescue efforts in Slovenia and the Ukrainian government in Kyiv on 2 February
following devastating floods. As a fully participating 2023. This agreement allows small and medium-
state, Ukraine will be able to dispatch aid via the sized enterprises in Ukraine to benefit from specific
mechanism alongside other members when another calls for proposals that can result in funding, and
country faces a crisis, offering the same solidarity it to participate in initiatives like Erasmus for Young
has received. It also signals an important step Entrepreneurs and the Enterprise Europe Network.
towards EU integration for Ukraine and extends the
Two calls for proposals, with a total budget of
EU Civil Protection Mechanism’s Eastern
€7.5 million, were launched specifically to support
Neighbourhood.
the integration of Ukrainian small and medium-
sized enterprises into the Single Market. In addition,
work progressed swiftly on the negotiations for
an Agreement on Conformity Assessment and
Acceptance of Industrial Products with Ukraine.
This agreement, once in place, will foster economic
integration, thereby assisting the Ukrainian economy
and Ukrainian businesses in their recovery.

From left to right: Ihor Klymenko, Ukrainian

Minister for Internal Affairs, Olha Stefanishyna,
Deputy Prime Minister for European and Euro-
Atlantic Integration of Ukraine, and Janez
Lenarčič, European Commissioner for Crisis
Management, at the signing of an agreement See how Erasmus for
granting Ukraine full membership of the EU
Civil Protection Mechanism, Kyiv, Ukraine, Young Entrepreneurs supports
20 April 2023. Ukrainian entrepreneurs.

See how the EU and the

Enterprise Europe Network
support Ukraine.
18
T H E E U I N 2023

Ukraine also benefits from another important Single Simultaneously, the Commission is working on
Market feature. In April 2022, the EU collaborated embedding this roaming agreement into the EU–
with European and Ukrainian mobile operators to Ukraine Association Agreement. Once finalised, it will
offer affordable or free roaming between the two ensure cost-free mobile use for both Ukrainian
regions. This agreement, renewed in July 2023 for visitors in the EU and EU travellers in Ukraine. The
another year, aids those displaced from Ukraine in pace of Ukraine’s integration into the EU’s roaming
maintaining contact across borders, with operators market will depend on its adoption and execution of
further reducing connection costs. relevant EU laws.

Food security
Russia is worsening the world food security crisis by In 2022, the EU, its Member States, Ukraine and
deliberately blocking grain exports via the Black Sea, Moldova established the EU–Ukraine Solidarity
targeting grain silos and agricultural infrastructure in Lanes to get the grain trapped in Ukraine out to
Ukraine and limiting the export of agricultural goods the rest of the world. These alternative routes,
and fertilisers. spanning railways, roads and waterways, facilitate
both exports from Ukraine and vital imports such as
humanitarian aid and fertilisers.

The Solidarity Lanes: a critical role in global

food security
In total, in 2022 and 2023, the Solidarity Lanes
enabled Ukraine to:
• export over 65 million tonnes of agricultural
products, including nearly 61 million tonnes of
grain, oilseeds and related products, including
to those countries most affected by food
scarcity;
The unloading of Ukrainian grain from
a barge on the Danube River, Moldova, • export over 51 million tonnes of non-
12 December 2022. agricultural products from Ukraine, such as
ores, iron, steel and wood;
• generate about €44 billion for Ukrainian
farmers and businesses;
• import over 43 million tonnes (with a value of
€88 billion) of crucial goods such as fuel.
 19

In June 2023, the EU announced that it was investing Finally, a Joint Coordination Platform was set up

GENERAL REPORT
€250 million in nine cross-border projects to improve in 2023 to improve the flow of trade between the
connections between Ukraine, Moldova and their EU EU and Ukraine. The platform’s efforts intensified
neighbours Hungary, Poland, Romania and Slovakia. following Russia’s termination of the Black Sea Grain
The projects include studies and works at rail and Initiative on 17 July, effectively halting grain exports
road border-crossing points to extend and upgrade via the Black Sea route.
infrastructure, improve parking areas and improve
transhipment facilities and equipment.

Supporting Member States

The effects of Russia’s war of aggression against In addition, after suspending cooperation
Ukraine are being felt beyond Ukraine’s borders. As programmes with Russia and its ally Belarus, in
neighbours of Ukraine, the Member States are also 2023 the EU transferred an additional €135 million
being affected, particularly in the areas of energy initially envisaged for projects with these two
and food markets. (For more information on how the countries to other programmes that will strengthen
EU is addressing the energy crisis, see Chapter 4.) the cooperation between Member States and Ukraine
and Moldova.
In 2023, the EU authorised €487 billion in State aid
to support Member States in the context of Russia’s During the year, the EU also ensured that all regions
war of aggression against Ukraine. in Estonia, Latvia, Lithuania, Poland and Finland
that were supposed to participate in cooperation
The Temporary Crisis and Transition Framework,
programmes with Russia and Belarus could
applicable as of 9 March 2023, is one of the tools
participate in other existing interregional cooperation
that Member States can use to mitigate the war’s
programmes.
effect on their economies.

The Temporary Crisis and Transition Framework gives

Member States the flexibility they need to:

1 grant limited amounts of aid 2 ensure that sufficient liquidity 3 compensate companies for the
to companies affected by the remains available to businesses additional costs incurred due
current crisis or by the related to exceptionally high gas and
sanctions and countersanctions electricity prices
20

© AFP The wheat harvest in the Donetsk region,

Ukraine, 4 August 2023.
T H E E U I N 2023

Supporting EU farmers
Given the importance of Russia and Ukraine to In total, more than €156.3 million was provided
the global supply of cereals and oilseeds, Russia’s from the Common Agricultural Policy agricultural
ongoing war against Ukraine has created great reserve to support those farmers most affected in
uncertainty and volatility on these markets. the five Member States neighbouring Ukraine. The
Member States concerned were also permitted to
As Ukraine’s usual export routes through Black Sea
use national means of support to provide additional
ports have been blocked or heavily restricted, exports
compensation, if necessary, through either a top-up
have not reached their destinations as effectively as
or dedicated State aid. Moreover, in a third support
before. Instead, Ukrainian cereals and oilseeds have
package, the Commission mobilised an additional
increasingly been found in the markets of Member
€330 million of funding to be allocated to EU
States neighbouring Ukraine, creating logistical
farmers in other Member States impacted by high
bottlenecks.
input costs and specific problems caused by the
In 2023, the EU introduced two support packages Russian war of aggression. The recently established
and a temporary ban on the import of wheat, European Food Security Crisis Preparedness and
maize, rapeseed and sunflower seed from Ukraine Response Mechanism enabled the swift mobilisation
to Bulgaria, Hungary, Poland, Romania and Slovakia, of expertise and drew the attention of public and
under the Autonomous Trade Measures for Ukraine private stakeholders to problems and bottlenecks
Regulation. This helped to alleviate logistical at an early stage. The outcome of the discussions
bottlenecks and address the concerns of farmers in among these stakeholders directly informed the EU’s
the affected Member States, while still allowing the responses.
EU to continue its economic support of Ukraine in the
form of zero tariffs on all Ukrainian imports.

Investigation and prosecution of war crimes

Since Russia’s war of aggression against Ukraine International Criminal Court and the European Union
began, Russian authorities have continually violated Agency for Law Enforcement Cooperation.
international human rights, with numerous reports
Because of the complexity of gathering evidence of
of war crimes and attacks on civilians. By the
international crimes (e.g. collecting testimonies from
end of 2023, Ukraine and 16 Member States had
people in different countries), Eurojust also set up a
launched investigations into the international crimes
database in 2023 to preserve and store evidence of
committed by Russia in Ukraine.
these crimes (the Core International Crimes Evidence
Six days after the war began, the European Union Database). Eurojust will lend its expertise to this
Agency for Criminal Justice Cooperation (Eurojust) database by analysing the evidence, and will provide
helped establish a joint investigation team with the practical guidance to national judicial authorities in
purpose of collecting evidence and investigating identifying evidence located in other countries that
war crimes and crimes against humanity. Today, the may be relevant to their own investigations.
team consists of Ukraine, six Member States, the
 21

GENERAL REPORT
Eurojust also hosts the newly established The launch of the International Centre for the Prosecution of the
International Centre for the Prosecution of the Crime Crime of Aggression against Ukraine, The Hague, Netherlands,
3 July 2023. Background, from left to right: Kenneth Polite, US
of Aggression against Ukraine. Opened in July 2023, Assistant Attorney General for the Criminal Division, Andriy Kostin,
the centre is composed of independent national Prosecutor General of Ukraine, Dilan Yeşilgöz-Zegerius, Dutch
prosecutors from the joint investigation team’s Minister for Justice and Security, Ladislav Hamran, President of
members and six Ukrainian prosecutors, and was set Eurojust, Didier Reynders, European Commissioner for Justice, and
Karim Asad Ahmad Khan, Prosecutor of the International Criminal
up to prepare and contribute to any future Court.
prosecution of Russia’s crime of aggression against
Ukraine. A crime of aggression is when high-ranking
political and military leaders plan, initiate or carry
out large-scale acts of aggression using state
military force. This is the first time in history that
such a crime is being investigated as it unfolds.
At the centre, prosecutors will be able to work
together on-site, enabling them to exchange Through its Freeze and Seize Task Force, Eurojust
evidence quickly and agree on the way in which they is also ensuring that EU sanctions are properly
will carry out their investigative and prosecution implemented. The task force is investigating possible
strategy. The Core International Crimes Evidence links between criminal activity and Russian and
Database will be central to its work, and the evidence Belarusian individuals and businesses. It is also
collected by the centre can be used before other looking at how criminal-law measures such as asset
jurisdictions, including national and international confiscation can contribute to the reconstruction of
courts. Ukraine.

• Support for investigations (International Centre for the

Prosecution of the Crime of Aggression against Ukraine
and joint investigation teams)

• Collection, preservation and analysis of evidence

(Core International Crimes Evidence Database)

Eurojust support for Practical guidance

justice for Ukraine
•

• Training for judicial practitioners

• Support for the EU Freeze and Seize Task Force

22

Ukraine’s reconstruction
T H E E U I N 2023

The EU is committed to ensuring that Russia will cities in a sustainable and inclusive way. The Phoenix
pay for the damage caused in Ukraine. As such, it (Project for a Holistic Orientation towards
is exploring options to support the reconstruction Environmental New Infrastructure in Ukrainian Cities)
of Ukraine – in line with EU and international law – initiative was launched in March. The initiative will
with the extraordinary revenues generated by the allow Ukrainian cities access to cutting-edge
management of the Russian central bank reserves technologies and expertise from the New European
that are currently frozen in the EU because of Bauhaus community. It will also connect Ukrainian
sanctions. To this end, in December the Commission cities with similar ones in the EU to exchange
adopted proposals on the freezing of extraordinary know-how and good practices on how to build
windfall revenues from Russian central bank assets. climate-neutral and more energy-efficient cities. It
will combine funding from the Horizon Europe
The EU is also coordinating the reconstruction of
Mission for Climate-Neutral and Smart Cities and the
Ukraine with its international partners. The EU,
LIFE programme, with the immediate mobilisation of
Ukraine and G7 partners launched the G7 Multi-
at least €7 million.
agency Donor Coordination Platform in January
2023. The platform plays a key role in coordinating Finally, at the Ukraine Green Recovery Conference
support for Ukraine’s immediate financing needs and that took place between 28 November and
for its future economic recovery and reconstruction 1 December in Vilnius, Lithuania, the EU reaffirmed
across various sources and established financing its continued support for Ukrainian municipalities
instruments. and presented the ongoing implementation and the
first results of the Phoenix initiative. In parallel, the
During the February visit to Ukraine by the College of
Circular Economy Mission brought EU companies
Commissioners, the EU announced a €1 billion aid
and industry stakeholders focusing on the circular
package for the reconstruction efforts as part of its
economy together with Ukraine-based businesses
overall package of assistance to the country. The
and public buyers, boosting the business dimension
Commissioners and the Ukrainian government also
of Ukraine’s green recovery.
discussed how the EU could help Ukraine rebuild its

At the Ukraine Recovery Conference in London, in June, the EU

presented a new facility proposing up to €50 billion in grants and
loans to aid Ukraine’s recovery and modernisation from 2024 to
2027.
This demonstrated the EU’s unwavering support for Ukraine amid
Russia’s ongoing war of aggression and affirmed its commitment to
Ukraine’s path towards EU membership.
Additionally, the EU signed agreements amounting to more than
€800 million to mobilise private investment for the recovery and
reconstruction of Ukraine’s economy.

Ursula von der Leyen, President of the European Commission, speaking at the
Ukraine Recovery Conference, London, United Kingdom, 21 June 2023.
 23

GENERAL REPORT
2. Strengthening
© AFP

the economy
and the EU’s
competitiveness
Employees oversee the assembly of an electric vehicle at the
Neapco Europe facility in Dueren, Germany, 22 August 2023.
Introduction
In 2023, the European Union continued to focus on Market, and during the year the EU introduced a
boosting competitiveness and making its economy unitary patent system and measures to facilitate
green, digital, inclusive and resilient. With the cross-border business. To ensure the EU economy
Green Deal Industrial Plan, proposed in 2023, the benefits from digitalisation, the EU proposed a legal
EU aims to enhance the competitiveness of net- framework for a digital euro – which will complement
zero technologies and support the fast transition the continued use of cash – and introduced a
to climate neutrality. The EU also put forward a customs data hub. In addition, it submitted several
strategy for achieving economic security in the legislative proposals that will bolster its capital
EU and set out key indicators for strengthening markets union by making it safer for retail investors
its long-term competitiveness. Furthermore, it to invest; introduced legislation to counter the
updated the sustainable finance framework and took distortive effects of foreign subsidies on EU markets;
steps towards reforming the customs union. 2023 and reformed and introduced frameworks to make
also marked the 30th anniversary of the Single banks more resilient during economic shocks.
24

Continued recovery and long-term resilience

T H E E U I N 2023

Trends investments that Member States intend to complete

by the end of 2026, for which they can receive
In 2023, the EU economy continued to grow, albeit financing up to a previously agreed allocation. The
with reduced momentum due to the formidable Commission disburses payments to Member States
economic shocks it had endured. Inflation eased that are contingent upon the successful achievement
throughout the year, thanks to declining energy of predetermined milestones and targets outlined in
prices and the moderation of inflationary pressure their plans. These measures are designed to tackle
from food and industrial goods. the Member States’ key challenges and align with EU
The EU economy is being supported by an objectives.
exceptionally strong labour market, which has seen The Recovery and Resilience Facility is driving
record low unemployment rates, the continued reforms and investment in six policy areas: (i) the
expansion of employment and rising wages. The green transition; (ii) the digital transformation;
implementation of reforms and investment under the (iii) smart, sustainable and inclusive growth;
Recovery and Resilience Facility remains central to (iv) social and territorial cohesion; (v) health,
keeping the EU economy on the right track. economic, social and institutional resilience; and
Looking ahead, Russia’s ongoing war of aggression (vi) policies for the next generation.
against Ukraine and wider geopolitical tensions The EU also offers Member States help with
continue to pose risks to the EU economy’s growth implementing their recovery and resilience plans
prospects. via the Technical Support Instrument. To date,
more than 400 projects have benefited from this
support. Twenty-three Member States have received
The success of the Recovery and or are currently receiving general support with the
Resilience Facility horizontal aspects of recovery and resilience plan
implementation, including support in revising their
In 2023, the implementation of the Recovery and
plans, while all 27 Member States are benefiting
Resilience Facility, at the heart of the €800 billion
from thematic support linked to the implementation
NextGenerationEU recovery plan, continued to drive
of the Recovery and Resilience Facility measures.
economic recovery. The instrument bolstered the
economic and social resilience of the Member States
and supported REPowerEU, the EU’s initiative to help A majority of people in
Member States accelerate their transition away
from fossil fuels, in the light of Russia’s unprovoked
Europe (53 %) think that
invasion of Ukraine (see Chapter 4 for more on the NextGenerationEU can be effective
REPowerEU initiative). in responding to current economic
The facility is unique due to its performance- challenges.
based nature. To benefit from it, a Member State
must submit a recovery and resilience plan to the Source: Standard Eurobarometer 100, December 2023.
Commission. These plans outline the reforms and
 25
Thanks to the implementation of Member States’ recovery and resilience
plans, by the end of 2022 (latest available figures):

ck

tock
tock
tock
Sto

eS
eS
S
b b
be

do

be
do do do
©A ©A ©A ©A

• 6.9 million individuals • 1.4 million businesses 5.9 million people

• • 22.1 million megawatt-

GENERAL REPORT
were engaged in received in-kind benefited from hours of annual primary
education and training support protection measures energy were saved
against climate-related
disasters

Funds flowing towards Recovery and Resilience Facility (RRF) objectives

Project examples
• Green transition • Social and territorial cohesion
• In France, the RRF has financed energy- • The RRF is enabling Austria to help long-
efficiency upgrades for 20 000 social term-unemployed people gain access to
dwellings and for student housing. training and qualifications.

• Digital transformation • Health, economic, social and

• The RRF is boosting Italy’s cloud capacity institutional resilience
by investing in data centres for the digital • An RRF-backed reform in Cyprus will enhance
economy. anti-corruption efforts and establish an
independent anti-corruption authority.

• Smart, sustainable and inclusive growth • Policies for the next generation
• The RRF has helped Spain assist more • RRF funds have helped Czechia give around
than 60 large companies and SMEs with 74 000 digital devices to pupils for remote
sustainable mobility research and innovation. learning.
26

The EU budget: making the EU fit

T H E E U I N 2023

for current and future challenges

In 2023, the EU’s long-term budget (the multiannual
financial framework) and NextGenerationEU were
central to Europe’s recovery, addressing challenges
such as the nearby war, high inflation, natural
disasters and humanitarian crises. To ensure that the
EU budget can continue to deliver on the most
essential priorities, the Commission proposed a
revision of the multiannual financial framework
in June.
In September, the EU’s annual budget for 2024 was
adopted. It addresses urgent crises in the Middle East
and in Europe and its neighbourhood.
To support NextGenerationEU and aid Ukraine, the
Commission raised around €116 billion in long-term
funds in 2023, including up to €12.5 billion in green
Johannes Hahn, European Commissioner for Budget and
bonds, positioning the EU as a leading green bond Administration, presenting the multiannual financial framework
issuer. review proposal, Brussels, Belgium, 20 June 2023.

Building long-term resilience

During the year, the Commission presented its
legislative proposals to implement the most
comprehensive reform of the EU’s economic
governance rules since the aftermath of the 2007–
2008 economic and financial crisis. The
proposals stemmed from thorough reflection and
extensive consultation. The new
rules aim to facilitate and
encourage Member States’
implementation of important
reforms and investments. They will
simplify economic governance,
improve national ownership, place
greater emphasis on the medium
term and strengthen the
enforcement of the EU’s fiscal
rules, within a transparent common
EU framework.

Valdis Dombrovskis, Executive Vice-President of the European Commission in charge of

an Economy that Works for People and European Commissioner for Trade (left), and Paolo
Gentiloni, European Commissioner for Economy (right), at a press conference on the review
of the EU’s economic governance framework, Brussels, Belgium, 26 April 2023.
 27

GENERAL REPORT
Croatia joins the euro area
On 1 January 2023, Croatia joined the euro
and the Schengen area.
The euro enhances convenience and
competitiveness for Croatians, simplifying
travel and trade. Its notes and coins symbolise
the EU’s promise of freedom and opportunity
for all Croatians.
A survey conducted in Croatia after the euro
fully replaced the kuna shows that 61 %
of Croatian citizens believe the changeover
© Martin Münd/European Central Bank
happened smoothly and efficiently, while 88 %
felt they were well informed about the single
currency.
In the EU, support for the euro continues to be very strong: 71 % of people in the EU
support European economic and monetary union with one single currency, with the
percentage standing at 79 % in the euro area.
Sources: Flash Eurobarometer 518, February 2023; Standard Eurobarometer 100, December 2023.

A cohesive European Union

2023 marked the 30th anniversary of the creation for 4.5 million businesses, the creation of over
of the Cohesion Fund. During its three decades of 370 000 new jobs, improved broadband access for
existence, the Cohesion Fund has invested nearly more than 7.9 million households and the installation
€179 billion in the economic, social and territorial of over 6 000 megawatts of additional capacity for
cohesion of the EU. Cohesion-policy funding for the renewable energy production.
2021–2027 period is expected to increase the EU’s
These achievements underscore the vital role of
gross domestic product by 0.5 % and support the
regional and local public administrations, which are
creation of 1.3 million jobs. Major projects completed
closest to the people and play a key role in delivering
or launched in 2023 include the restoration of
policy priorities and implementing EU legislation
the Pompeii complex, a new metro system for
on the ground. In recognition of this, the ComPAct
Thessaloniki and improved wastewater infrastructure
initiative, launched in 2023, aims to enhance public
in Romania. By the end of the year, cohesion-policy
administrations in the Member States.
programmes for the 2014–2020 period had achieved
significant results on the ground, including support
28

Elisa Ferreira, European

T H E E U I N 2023

Commissioner for Cohesion

and Reforms (first from right),
visiting the Greenhouses
to Reduce CO2 on Roofs
project, co-funded by the EU,
Bettembourg, Luxembourg,
13 March 2023.

A strong and resilient Single Market

30 years of the Single Market
In 2023, the EU celebrated the 30th anniversary For over 30 years, the Single Market has been central
of its Single Market, the establishment of which, to the EU’s competitiveness, improving the lives of
on 1 January 1993, was a significant milestone in citizens and making business easier. By increasing
European integration. The Single Market is more than the EU’s gross domestic product by 9 %, it has
just a legal framework or a market; it represents delivered substantial economic benefits, bolstered
an area of freedom, progress, opportunity, growth, by cohesion-policy support that enables all regions
shared prosperity, cohesion and resilience. This to engage with and benefit from it. The Single
significantly strengthens the EU’s global economic Market also plays a key role in facilitating the green
and geopolitical position. Accounting for 15 % of and digital transitions. As the source of the EU’s
global gross domestic product, it is the world’s regulatory, financial and supply-chain integration, it
largest integrated single market area, while helps build economies of scale that are instrumental
remaining one of the most outward-oriented. in helping businesses grow.
 29

GENERAL REPORT
The Single Market in a nutshell

The Single Market accounts for 18 % of global gross domestic product ...
... offering goods and services to more than 450 million people.
Source: ‘Annual Single Market Report’, January 2023.

It covers:

23 million
•
… employing
• •€965 billion of €3 428 billion
• • €8 163 billion
businesses … nearly 128 million intra-EU exports of intra-EU of intra-EU
people in services exports in goods investments

Did you know? (*)

• 47.5 % of EU exports • Over 60 % of foreign- Between 2010 and

• •2.4 % of tertiary-
of goods to non-EU controlled enterprises in 2021, the number of level students in
countries in 2020 were the EU are controlled by people employed in Member States are
in euro. a company in another Member States who had from another Member
EU Member State. citizenship of another State.
Member State increased
by 47.0 %.

(*) Data refer to the EU with 27 Member States and the latest Source: Eurostat.
year available.
30

How will the Unitary Patent

The Single Market has been crucial to the EU’s
T H E E U I N 2023

economic resilience, proving vital in recent crises system work?

such as the pandemic, or Russia’s actions in Ukraine
and the subsequent energy crisis. Moreover, it
serves as an important geopolitical tool, enhancing
the EU’s influence amid geopolitical shifts and the
race for clean technology. Despite its achievements,
the Single Market must evolve in the face of new
and changing geopolitical realities, technological
advances and the green and digital transitions, and
to boost the EU’s long-term competitiveness and
productivity.

A stronger Single Market

The EU is continually improving the business
environment across all sectors of its economy.
In September 2023, the Commission presented a
proposal to combat late payments by companies
and public authorities, a practice that compromises
the cash flow of small and medium-sized
enterprises (SMEs) and hampers the competitiveness
and resilience of supply chains. This proposal is part
of a broader series of measures in the relief package
the Commission has introduced to support SMEs
facing economic challenges.
The EU is also supporting innovation by making it
easier for businesses to protect their intellectual
property across the EU. The launch of the
Unitary Patent system in June was a significant step
towards completing the Single Market and enhancing
patent protection in Europe. This system provides a
one-stop shop for the registration and enforcement
of patents in Europe, leading to lower costs, less
paperwork and a reduced administrative burden for
innovators, and will benefit SMEs in particular.
In addition, the new Unified Patent Court, with
jurisdiction over both Unitary Patents and existing
European patents, will allow companies to enforce
their patent rights more effectively. Additionally,
the SME Fund, a joint initiative of the Commission
and the European Union Intellectual Property Office,
provides financial support (intellectual-property
vouchers) to SMEs to manage their intellectual-
property portfolios, including trademarks, designs,
patents and plant varieties.
 31

The Commission proposed a patent package Finally, the EU is supporting cross-border business

GENERAL REPORT
in April 2023, which complements the Unitary by eliminating barriers that impede economic growth
Patent scheme. Once adopted, businesses will and business.
benefit from a new, more balanced framework
for standard essential patents and simpler access
to supplementary protection certificates for
New measures to address barriers
pharmaceutical and plant protection products, along could add €713 billion to the
with clearer rules on compulsory licensing during economy by the end of 2029.
crises. In addition, the Regulation on Geographical
Indications for Craft and Industrial Products, which
One example is the proposed new rules to eliminate
came into effect during the year, allows EU producers
barriers to the free circulation of non-road mobile
to better protect craft and industrial products and
machinery, such as cranes, harvesters and forklifts,
know-how associated with their region.
on public roads.
With the proposed reform of the EU design protection
legislation, innovation and design protection in
the EU will also be strengthened, streamlined and
modernised.

The regulation on non-road mobile machinery will ultimately replace the

various regulatory regimes that currently exist in the Member States, and will:

•eliminate barriers reduce compliance

• •facilitate the use • ensure high and equal
to market entry and costs, facilitate of machinery across standards for the road
reduce market delays innovation and improve intra-EU borders safety of non-road
competitiveness mobile machinery
across the EU

In addition, to make it easier for non-profit Finally, in December, the Commission put forward
organisations to operate across borders, in an amended proposal for a regulation to facilitate
September the Commission proposed a new legal cross-border solutions. This aims to assist Member
form called the European cross-border association. States in resolving obstacles that affect the daily
This will improve the functioning of the Single Market lives of the 150 million citizens living in the EU’s
by removing legal and administrative barriers for cross-border regions. Tackling these obstacles will
non-profit associations that operate or want to significantly improve the functioning of the Single
operate in more than one Member State. Market and strengthen the economic, social and
territorial cohesion of the EU.
32

Boosting long-term competitiveness

T H E E U I N 2023

In the context of strong global competition and Member States and businesses. The Commission’s
new geopolitical challenges, the Commission has antitrust, merger and State-aid-control decisions
proposed focusing on nine key drivers to boost the ensure a balanced and efficient internal market,
EU’s long-term competitiveness. These are a properly which is crucial for the EU’s economy. State-aid
functioning Single Market, access to private capital, control ensures that government subsidies align
public investment and infrastructure, research with shared goals and maintain consistent business
and innovation, energy, circularity, digitalisation, conditions throughout the EU. Vibrant private-sector
education and skills, and trade and open strategic competition leads to better quality and fairer prices
autonomy. for consumers. Every competition-policy decision
by the Commission upholds consumer and business
The EU also ensures long-term competitiveness and
interests, while also protecting people in the EU from
a thriving Single Market by uniformly applying rules
unscrupulous economic players.
aimed at maintaining fair competition across all

The nine drivers of competitiveness

1
Functioning Single Market

2 Access to private capital Circularity 6

Environmental
sustainability
3 Public investment and Resilience, Digitalisation 7
stability
infrastructure
Sustainable
competitiveness
Productivity

4 Research and innovation Well-being Education and skills 8

for all, fairness
Trade and open 9
5 Energy strategic autonomy

Growth-enhancing regulatory framework

The Digital Markets Act is a good example of how competition policy benefits the public. The act, which
complements EU competition rules without replacing them, is one of the first pieces of legislation in
the world to curb the gatekeeping power of major digital companies, resulting in economic and social
benefits for citizens. (For more information, see Chapter 5.)
 33

The EU not only ensures that internal

GENERAL REPORT
competition is fair, but also checks that
businesses in the EU have a fair chance
to succeed when faced with international
competition. In July, the EU introduced the
Foreign Subsidies Regulation. This allows
the Commission to examine financial
contributions given by non-EU
governments to companies operating in
the EU. If the contributions provide an
unfair advantage to these companies, the
Commission can take measures to correct
V I D E O The Foreign Subsidies Regulation. the distortive effects.

The effectiveness of EU competition rules hinges on their implementation. Here are some ways in which the
EU ensures fair competition by enforcing rules.

• 335 merger decisions were •€487 billion of State aid • In June 2023, the Commission
taken in 2023. was authorised during sent a Statement of Objections
the year, especially in the to Google with its preliminary
context of Russia’s war of view that the company
aggression against Ukraine favours its own online display
and its implications for prices advertising technology services
in the EU. to the detriment of rivals.

Critical raw materials are indispensable to

a wide range of strategic sectors, including
net-zero technologies, the digital industry
and the aerospace and defence sectors. The
Critical Raw Materials Act will improve the
EU’s capacity to monitor and mitigate the
risk of disruptions and enhance circularity
and sustainability. Along with the reform
of the electricity market design and the
Net-Zero Industry Act, both of which were
announced as part of the Green Deal
Industrial Plan (see Chapters 3 and 4), this
act will foster a regulatory environment
conducive to the growth of net-zero
Thierry Breton, European Commissioner for Internal Market, during a technologies and the competitiveness of
press conference on the Critical Raw Materials Act, the EU’s long-term-
competitiveness strategy and 30 years of the Single Market, Brussels,
European industry.
Belgium, 16 March 2023.
34

The Net-Zero Industry Act is also set to enhance Improving economic security is another key factor
T H E E U I N 2023

the competitiveness of the EU economy by offering in enhancing the competitiveness of the EU. In June,
a better regulatory framework for industries. the Commission and the High Representative of the
This will support their move towards green and Union for Foreign Affairs and Security Policy, Josep
digital innovations. As part of the Green Deal Borrell, launched the European Economic Security
Industrial Plan, it will create a more predictable Strategy – a comprehensive approach aiming to
and simplified regulatory framework aimed at make the EU economy stronger. This strategy will
encouraging investment in the manufacturing of promote the development of the EU’s industrial base,
products essential to achieving the EU’s climate protect its essential economic security interests and
neutrality goals. partner with the broadest possible range of non-
EU countries to advance shared action to promote
The act will also strengthen and make more resilient
economic security at the international level. The
the EU’s industrial base in net-zero technologies,
strategy is essential for the EU to be able to assess
which are crucial to a cost-effective, reliable and
and manage economic risks, while also preserving its
sustainable clean-energy system. Furthermore, it will
openness and continuing to engage internationally.
speed up the creation and production of net-zero
technologies, helping to lessen the EU’s dependence
on Russian fossil fuels and avoid new dependencies
that could block key technologies and components
needed for the green transition (see Chapter 4).

Stronger EU–China relations to boost

competitiveness
The EU’s relations with China are central to efforts
to strengthen the EU’s competitiveness.
Faced with an increasingly assertive China that
hardened its overall strategic posture, in 2023
the EU rolled out the approach of de-risking and
rebalancing its relationship with China, while
continuing to work towards a stronger rules-
based international order.
Ursula von der Leyen, President of the
Rebalancing involves the continuation of bilateral European Commission, delivering a
speech on EU–China relations, Brussels,
economic relations and cooperation on global
Belgium, 30 March 2023. In her speech,
challenges with China, while also addressing the President outlined the strategic
market distortions resulting from China’s approach she would adopt during her
disproportionate state subsidies. visit to China on 6 April 2023; at the
G7 Summit in Hiroshima, Japan, on
De-risking includes reducing critical dependencies 19–21 May 2023; and during the EU–
and tackling specific risks relating to China’s China Summit on 7 December 2023
(see Chapter 8).
strategy to advance its military development
by exploiting innovations stemming from joint
research, academia and international private
firms.
 35

Financial systems

GENERAL REPORT
The capital markets union
Capital markets are financial markets where On 24 May 2023, the Commission adopted a retail
securities, such as stocks and bonds, are bought investment package that will empower and protect
and sold. They allow businesses, governments and retail investors. Retail investors are individual, non-
other entities to raise capital from a wide range professional investors who invest in capital markets
of investors. The capital markets union is the EU’s to manage their finances, including preparing for
initiative to create a single market for capital, retirement needs. The EU wants to ensure that retail
allowing cross-border capital flows and giving EU investors are duly protected and treated fairly when
companies, including SMEs, access to more sources investing, so that they can take full advantage of
of funding. the capital markets union to make their wealth grow.
Boosting investor confidence and improving the
To boost investment, investors need to feel protected
capital markets union are also essential means of
and confident that their investments will yield
channelling private funding into the EU economy and
worthwhile returns. This is why one of the main goals
funding the green and digital transitions.
of the EU’s 2020 Capital Markets Union Action Plan
is to make the EU a safer place for people to invest
their savings in the long term.

What is the problem?

• Retail investors are •Social media and new • Financial advice may • Some investment
struggling to access marketing channels not always be in the products do not offer
relevant, comparable and are increasingly putting best interests of retail value for money to the
easily understandable retail investors at risk investors. retail investor.
information to make of undue influence.
informed investment
choices.

Consequences

• Only 17 % of EU household assets were held in financial securities (such as stocks or bonds) in
2021, well below the level for US households. (Source: Eurostat.)

• 40 % -higher fees are paid by retail investors compared with institutional investors (e.g.
pension funds). (Source: European Securities and Markets Authority costs and performance report,
January 2023.)

• 45 % of people in the EU are not confident that the investment advice they receive from
financial intermediaries is in their best interests. (Source: Flash Eurobarometer 525, July 2023.)
36

In May, the Parliament and the Council also agreed and use of liquidity management tools relating to
T H E E U I N 2023

on a proposal to establish a single access point funds, bringing them into line with international
for all public financial and sustainability-related recommendations on supporting financial stability. It
information about EU companies and EU investment also establishes a common framework for funds that
products. This will increase companies’ visibility give loans to companies (loan-originating funds) and
among investors, opening up additional financing enhances transparency on delegation rules, ensuring
sources. This is particularly important for small supervisors understand how much fund managers
companies in small capital markets. The European depend on third-party expertise.
Single Access Point will also provide easy access
Together, the three aforementioned proposals
to corporate sustainability reports published by
will ensure that investors have better access to
companies, which will support the objectives of the
company and trading data. The measures will also
European Green Deal.
encourage long-term investment and make it easier
In addition, the Parliament and the Council agreed and safer for investment funds to be sold across
on a legislative proposal to revise the regulation borders. Overall, the proposals will better connect
governing rules about the structure of the markets EU companies with investors, improving companies’
in financial instruments on 29 June. The revision will access to funding, broadening investment
ensure that the right conditions for a consolidated opportunities for retail investors and further
tape provider are in place to deliver a consolidated integrating EU capital markets.
view of trading across the EU. The consolidated
In November, the EU updated the Central Securities
tape will gather the prices and volumes of financial
Depositories Regulation. This regulation was
instruments, such as shares and bonds, from
originally introduced to improve the safety and
hundreds of execution venues across the Member
efficiency of settlement activities in financial
States into a single stream of information, making
markets, namely the completion of a securities
it equally accessible to everybody. All execution
transaction through the transfer of cash, securities
platforms, such as stock exchanges and trading
or both. The revised legislation will improve the EU’s
platforms, will be required to contribute their trading
capital markets and financial system by providing
data directly to the consolidated tape.
more proportionate and effective rules to reduce
On 19 July, the Parliament and the Council agreed compliance costs and regulatory burdens for central
on a proposal to improve the regulatory framework securities depositories, facilitating their ability to
applicable to the investment fund industry. The offer a broader range of cross-border services and
revision harmonises the rules governing the selection improving their cross-border supervision.

What is a consolidated tape?

• It is a system that consolidates transaction information from EU trading platforms in real time, or as
close as possible to real time.

• It allows both professional and retail investors to see the price of and other information about a
financial instrument (such as the volume and time of transactions) in one place.

• Without a consolidated tape, information on trading is scattered across multiple execution platforms,
such as stock exchanges, other trading venues and investment banks (also called ‘systematic
internalisers’).
 37

Central securities depositories are Digital finance

GENERAL REPORT
specialised financial institutions On 28 June, the Commission put forward
two proposals to ensure that people can pay with the
that hold and administer securities European Central Bank-issued euro in the form they
(such as stocks and bonds), ensuring find most convenient.
their safekeeping and enabling The first proposal is about protecting the use of cash.
securities transactions to be The proposal was put in place to ensure that cash
remains widely accepted as a means of payment and
processed efficiently. They underpin is easily accessible for people and businesses across
the functioning of modern financial the euro area.
markets. The second proposal is to establish a legal
framework for a potential digital euro, which
In December, a political agreement was reached the Central Bank may issue in the future as a
on the Commission’s proposals to strengthen complement to cash. In October, having investigated
the insurance regulatory framework. This update the possibility of introducing the digital euro for the
will modernise the Solvency II Directive by giving previous 2 years, the Bank decided to move to the
better incentives to the insurance and reinsurance preparatory phase.
(i.e. insurance for insurance companies) sector to While cash will remain widely accessible and
invest more in long-term capital in line with the accepted, more and more citizens and businesses
objectives of the capital markets union. It will are choosing to pay electronically. The aim of the
also ensure this sector remains strong in difficult digital euro is to provide an additional option, on top
economic times and protects consumers’ interests. of current private payment options. It would offer a
The new rules will take better account of certain way to pay digitally with a form of public money that
risks, including those relating to climate change, and is widely accepted, cheap, secure and resilient in the
will make insurers’ financial strength less sensitive euro area (and potentially beyond).
to short-term market fluctuations. They will also
introduce a new (re)insurance undertakings recovery The Central Bank may decide to issue the digital euro
and resolution directive, to ensure financial stability only after the digital euro proposal is adopted by the
and protect policyholders and taxpayers in the European Parliament and the Council.
event of a (re)insurer’s failure. This directive will
require larger and systemically important entities
to formulate pre-emptive recovery plans to ensure
they are prepared for crises. In addition, national
authorities will have the tools to tackle problems
with failing (re)insurers, including by taking them
off the market in an orderly way while preserving
the continuity of insurance coverage as much as
possible.
Finally, 2023 saw the Commission helping Member
States strengthen their national capital markets.
So far, 21 Member States have benefited from the
Mairead McGuinness, European Commissioner for Financial
Technical Support Instrument in this field. Reforms
Services, Financial Stability and Capital Markets Union, at a
contributed to removing regulatory barriers to press conference on the digital euro and the legal tender of euro
investment and tackling market inefficiencies. The banknotes and coins, Brussels, Belgium, 28 June 2023.
objectives of these reform projects are to increase
investment opportunities, bring higher market
visibility for businesses and help SMEs access bank
credit.
38

Benefits of the digital euro for people

T H E E U I N 2023

• Using the digital • Easier to use • Paying without • Possibility

euro anywhere than existing access to the to pay even
in the euro area digital payment internet. without a
(other private solutions. bank account.
digital payment
solutions do not
When using More choice for Free of
always offer this
• • •

the digital euro consumers. charge for

option).
offline, people’s consumers.
privacy would
be the same as
when using cash.

Would the digital euro replace cash?

Absolutely not.
The digital euro would simply be a complement to cash and an alternative to today’s existing
private digital solutions.

What about privacy?

When paying online, When paying offline,

the bank would privacy is stronger
only have access to than for any other
the personal data digital means of
needed to perform payment – the bank
the payments and would only see the
to prevent fraud same data as when
and fight money withdrawing money
laundering. from a cash machine.
This is the same as Nobody would be able
when paying with to see what people are
other digital means of paying for when using
payment, for example the digital euro offline.
a credit card.

The European Central Bank would not have access to people’s data.
 39

Open finance and payments

GENERAL REPORT
With the rise of electronic payments, new service First, the Commission proposed to amend and
providers – such as entities providing open banking modernise the current Payment Services Directive
services – have emerged. More sophisticated types of (PSD2, which will become PSD3), and also proposed
fraud have also started to appear, putting consumers a payment services regulation. These changes will
at risk. In response to these developments, and ensure consumers can continue to make electronic
to ensure that the EU’s financial sector is capable payments and transactions safely and securely in the
of reaping the benefits of the ongoing digital EU. They aim to safeguard consumers’ rights while
transformation, the Commission proposed two sets also providing a greater choice of payment service
of measures on 28 June. providers on the market.

The proposal for a revised payment services directive and new

payment services regulation will:

• make widely available a service to verify name– • give victims of fraud a right of refund by their
account matches before confirming transfers bank or other payment service provider, in
specific circumstances

help banks and other payment service

• • oblige banks to improve customers’
providers cooperate against fraud through awareness about fraud
more fraud-related information sharing
40

Second, the Commission proposed a Framework for with a bank account in the EU. The new rules,
T H E E U I N 2023

Financial Data Access. This framework will establish which modernise the Single Euro Payments Area
clear rights and obligations relating to managing Regulation, aim to ensure that instant payments in
customer data sharing in the financial sector beyond euro are affordable, secure and processed without
payment accounts. In practice, this will lead to more obstacles across the EU. Instant payments offer fast
innovative financial products and services for users and convenient solutions for people in everyday
and will stimulate competition in the financial sector. situations, such as receiving funds promptly (in under
10 seconds) in case of emergencies or splitting
The proposed package aims to ensure that the
shared costs immediately in various social settings.
EU’s financial sector adapts to the ongoing digital
They also improve cash-flow management for public
transformation and to the risks and opportunities it
administrations and businesses, especially SMEs;
presents.
enable charities and non-governmental organisations
On 7 November, a political agreement was reached to access funds quickly; and encourage banks to
between the Parliament and the Council on the develop innovative financial services and products.
Commission’s proposal to make instant payments
in euro available to all people and businesses

Financial data access has the following benefits

For customers: For data users:

k
k

St
oc

to

S
obe ob e
© Ad © Ad

• more transparency and control over • increased access to key customer

their data-sharing relationships; datasets would boost innovation;
• increased trust and confidence in data • enabling new services and revenue
sharing; streams for data users.
• more innovative and cheaper financial
services from which to choose.
 41

GENERAL REPORT
VIDEO
Companies can use the EU
Taxonomy rules to improve their
environmental performance,
while investors can make use of
the EU Green Bond Standards
to determine how green their
investments really are.

Sustainable finance
The main goal of the EU Sustainable Finance On 13 June, the Commission presented a package to
Framework is to channel investment towards strengthen the EU Sustainable Finance Framework.
meeting the ambitious targets of the European This initiative supports companies and the financial
Green Deal. Although implementation is advancing, sector by promoting private investment in transition
further efforts are required to make the rules projects and technologies and by channelling
effective in practice and the tools user-friendly. financial resources into sustainable investment.
The package includes new criteria under the EU
To enhance the framework’s efficiency and ease its
Taxonomy, expanding its classification system to
implementation, the EU provides clear definitions of
encompass a broader range of economic activities
which economic activities qualify as environmentally
through the EU Taxonomy Environmental and
sustainable, and how to demonstrate their degree
Climate Delegated Acts.
of greenness. This is key in preventing greenwashing
and ensuring that funds are allocated to sectors The diagram below illustrates the key new economic
crucial for the green transition. activities that are now recognised as being
environmentally sustainable.
42
EU Taxonomy – economic sectors and activities covered

Disaster risk management Buildings

Nature-based solutions.
Demolition, road maintenance and use

New
Emergency services, flood-risk
of concrete in civil engineering.
New

prevention and protection infrastructure.

Construction, energy-efficiency
measures and renovations.
Water supply
and sewerage
T H E E U I N 2023

Urban wastewater, sustainable

drainage systems and phosphorus Climate Manufacturing
New

Delegated Act Plastic packaging goods, electrical and

recovery from wastewater.
and electronic equipment and

New
Water supply, sewerage, waste Environmental pharmaceuticals.
management and remediation. Delegated Act Enabling technologies, heavy industry
(transitional).
Transport
New transitional water and air transport, Energy
New

and automotive and rail components. Renewables, transmission, specific

Low emissions, transitional alternatives nuclear and natural gas activities
until 2025 and infrastructure. (subject to stringent conditions).

Services ICT and

Sale of spare parts and second-hand professional activities
goods. Forestry Software and consultancy, and
Preparation of end-of-life products and Afforestation, conservation, forest data-driven solutions for information and
components for reuse, and a marketplace management and the rehabilitation operational technologies.
New

New
for trading second-hand goods. and restoration of forests.
Research, data solutions and data centres.

The package also includes a recommendation on framework’s tools on a voluntary basis to channel
transition finance, providing guidance and practical investment towards the green transition and manage
examples for companies and the financial sector. their risks stemming from climate change and
These show how companies can use various of the environmental degradation.

Tools for financing the green transition

Example of a company in transition

Voluntary tools that companies can

Invests in use to finance their transition towards
new green sustainability over time include:
activities
Upgrades EU taxonomy,
Sustainability performance

production EU climate benchmarks,

Increases technology
European Green Bond standard,
energy efficiency
science-based targets,
2023 2028 2033 transition plans.

Proportion of green activities

 43

Environmental, social and governance (ESG) ratings Commission proposed a regulation that will address

GENERAL REPORT
also play an important role in the EU’s sustainable the ESG rating market’s lack of transparency, making
finance market, as they provide information to it more reliable. New organisational principles and
investors and financial institutions regarding, for clear rules on the prevention of conflicts of interest
example, investment strategies relating to and risk will increase the integrity of ESG rating providers’
management of ESG factors. In June 2023, the operations.

What is changing with the environmental, social and governance (ESG)

ratings proposal?

Before

A lack of clarity about ESG rating A lack of clarity about ESG

•

methodologies and data sources.

! ! •

rating providers’ operations.

Investors do not trust the quality !

c
! Companies are unsure whether ESG
k

Sto
•

be
of ESG ratings. © Ado ratings reflect their actual performance.

!
•

Investors and rated companies cannot make informed decisions.

The Single Market’s potential to contribute to European Green Deal and UN Sustainable Development
goals is not fully exploited.

After

More transparency.
•

•
More integrity.
•
Clearer objectives and
methodologies.
c
Authorisation requirements, along
k

Sto
be
•

•
Better clarity on data sources. © Ado with ongoing supervision.

•
Investors and rated companies can make informed decisions.

A better functioning Single Market

•

•
contributing to the EU’s Green Deal and the UN Sustainable Development Goals.
44

To ensure that companies report sustainability transition. On 28 February 2023, the Parliament and
T H E E U I N 2023

information in a harmonised way, the Commission the Council reached an agreement on the proposal
also adopted the first set of mandatory European for a European Green Bonds Regulation to establish
Sustainability Reporting Standards in July 2023. an official green bond standard. The regulation came
The standards cover ESG issues, including climate into force in December. A green bond standard is a
change, biodiversity and human rights. They provide set of criteria that provides a framework for issuing
information for investors to help them understand green bonds. The European Green Bond Standard
the sustainability impact of the companies in which ensures that green bonds finance projects with
they invest. They also take account of discussions genuine environmental benefits and helps maintain
with the International Sustainability Standards integrity and trust in the green bond market. Issuers
Board and the Global Reporting Initiative to ensure of European green bonds would need to ensure that
a high degree of interoperability between EU and at least 85 % of the funds raised by the bond are
global standards and to prevent unnecessary double allocated to economic activities that align with the
reporting by companies. Taxonomy Regulation. The new legislation also
establishes a framework for the authorisation and
The European Green Deal of 11 December 2019
supervision of third-party reviewers, which will help
underlined the importance of channelling financial
verify the features of the bonds, thereby improving
and capital resources towards green investment.
trust in green claims.
Green bonds play an increasingly important role in
financing assets needed for the low-carbon

PODCAST
EU Finance Podcast, ‘Episode 9 – The one about the European
Green Bond Standard’.

Banking
Following the 2007–2008 global financial crisis, and smaller banks. In the past, many failing small
substantial work was done to make sure that EU and medium-sized banks were helped using methods
banks became more resilient. Thanks to these outside the established resolution framework.
efforts, the EU’s financial institutions have fared well Sometimes this meant using public funds (taxpayers’
throughout more recent crises, such as the COVID-19 money) instead of the bank’s own money or other
pandemic, Russia’s war of aggression against backup funds financed by the industry and designed
Ukraine and the US banking crisis in spring 2023. to protect depositors (deposit guarantee schemes
Today, EU banks are well capitalised, highly liquid and resolution funds). The reformed framework will
and well supervised. As shown by the 2023 stress facilitate the use of industry-funded safety nets
tests carried out by the European Banking Authority, to shield depositors in banking crises, such as by
they are resilient even in very adverse scenarios. transferring them from an ailing bank to a healthy
one. The use of such safety nets must only be a
To further strengthen banks, the Commission
complement to the banks’ own reserves, which
adopted a proposal on 18 April to reform the EU’s
remain the first line of defence.
existing bank crisis management and deposit
insurance framework. The focus is on medium-sized
 45

Bank crisis management and deposit insurance framework reform

GENERAL REPORT
Objectives

Preserve financial stability Improve protection for Shield the real economy
and protect taxpayers’ money depositors from the impact of bank failure

What are we doing?

Improving bank-failure systems and depositor protection, especially for small and
medium-sized banks

Small and medium-sized banks

Business model with high share of deposits in the balance sheet

Before the reform After the reform

If a bank fails, the losses need to be absorbed by: If a bank fails, the losses can be absorbed by:

shareholders and shareholders and

creditors creditors
(which remain the first line
of defence)

depositors
Scheme
(instead of depositors)
c
k

Sto
be
© Ado
national resolution fund / national resolution fund /
Single Resolution Fund Single Resolution Fund
(in the banking union) (in the banking union)
46

Another important breakthrough during the year on Banking Supervision. The initial phase of the
T H E E U I N 2023

was the political agreement on the Commission’s Basel III reforms – mandating higher and better-
proposal for a review of the EU’s banking rules quality capital, reduced leverage and strict liquidity
(the Capital Requirements Regulation and the requirements – is already in effect in all EU banks.
Capital Requirements Directive), known as the With the completion of these standards, the EU seeks
banking package. This package implements the to enhance the regulatory framework’s simplicity,
final set of international banking regulation comparability and risk sensitivity, ultimately restoring
standards (the Basel III standards) agreed by the confidence in risk-based capital requirements.
EU and its G20 partners in the Basel Committee

What is in the banking package?

•Basel III: new rules on Better supervision

• Sustainability
•

internal models Supervisors will have Banks will be required to

A new limit will be stronger tools to oversee take environmental, social
introduced to ensure risks EU banks, including complex and governance risks into
are not underestimated banking groups. Minimum account when managing
when banks use their own standards will be introduced their business.
calculation models. to supervise non-EU banks
in the EU.

Fair, simple and modern taxation and customs

Reform of the customs union
In May, the Commission proposed the most The reform includes the establishment of an EU
ambitious reform of the customs union since its customs authority, which will oversee a new customs
establishment in 1968, in response to increased data hub. This will lead to a more centralised and
trade volumes, e-commerce growth and higher EU digitalised approach to customs that should lower
standards. The current system’s digital fragmentation compliance costs for traders, free up resources for
and suboptimal coordination between national national authorities and ensure a more efficient,
authorities have raised administrative compliance strengthened and fraud-proof customs union.
costs for traders and opened avenues for fraud.
 47

GENERAL REPORT
The DP World container terminal in
Constanța, Romania, 10 May 2023.

Tackling tax evasion and tax Towards fairer, simpler and more
fraud modern taxation
New reporting and information-exchange requirements, Dealing with 27 different national tax systems, each
in line with the Organisation for Economic Co-operation with its specific rules, makes it costly for companies
and Development’s Crypto Asset Reporting Framework, when it comes to tax compliance. This discourages
will assist the Member States in addressing tax evasion cross-border investment in the EU, putting businesses
and fraud in the crypto-asset and e-money sectors. at a competitive disadvantage compared to
The agreement reached in 2023 requires all EU-based elsewhere in the world.
crypto-asset providers to report transactions by clients
To address this issue, in September the Commission
residing in the EU, enhancing the detection of tax fraud
adopted the business in Europe: framework for
and avoidance.
income taxation proposal. This framework would
As part of the 2020 Capital Markets Union Action introduce a unified set of rules for determining the
Plan and the Action Plan for Fair and Simple Taxation tax base for groups of companies. This will reduce
Supporting the EU’s Recovery, the Commission proposed compliance costs by up to 65 % for large businesses
streamlining withholding-tax procedures for investors, operating in multiple Member States. Additionally, it
financial intermediaries and tax administrations. will simplify the process for national tax authorities,
This move aims to prevent both double taxation making it easier to determine the correct taxes due.
and abuses of the refund or relief system. It also
While the proposal is mainly aimed at large groups
seeks to harmonise the procedures for seeking relief
operating across the European Union, the EU has
from withholding taxes, thereby reducing costs for
also taken measures to simplify tax rules for micro
stakeholders.
companies and SMEs. The proposed directive on head
The Commission also proposed a directive on transfer office taxation introduces a simplification framework
pricing, aimed at reducing the compliance burden, for SMEs operating in other Member States through
increasing tax certainty and reducing disputes permanent establishments. It gives them the option
about transfer pricing. This is intended to prevent to interact with just one tax administration (or
both double taxation and instances of double head office) rather than the tax offices of all of the
non-taxation. Member States in which they operate. This aims to
encourage cross-border expansion.
48
T H E E U I N 2023

3. Creating a
climate-neutral and
prosperous Europe

Introduction
The European Green Deal is the European Union’s greenhouse-gas emissions by at least 55 % by 2030
roadmap for tackling the threefold threat of the was adopted in mid October. Extreme weather once
climate, environmental and biodiversity crises. With again exposed the harsh reality of climate change
it, the EU raised the level of its climate ambitions across the EU and the world, highlighting the need
by committing to reach climate neutrality by 2050. for continued efforts to cut emissions as quickly as
It is transforming the EU into a fair and prosperous possible. At COP28, the EU played a leading role in
society with a modern, resource-efficient and securing both a global agreement to accelerate the
competitive economy. In 2023, the EU reached an transition away from fossil fuels and a commitment
important milestone on its path towards achieving to triple global renewable-energy capacity and
climate neutrality. The key legislation to meet – and double the rate of energy-efficiency improvements
even exceed – its midterm target of cutting net by 2030.
 49

The reality of a boiling planet

GENERAL REPORT
The disruption and destruction brought by extreme In response to the increasing wildfire risk, in 2023
weather events in Europe and the world in 2023 the EU strengthened its anticipatory and foresight
was a stark reminder of the grave and ever-present capabilities, reinforced its rescEU firefighting fleet
threat climate change poses to societies, and of the and positioned hundreds of firefighters so they were
need for urgent action to protect the planet. able to provide immediate support. It also created
a Wildfires Support Team as part of its Emergency
Dry conditions contributed to longer and more
Response Coordination Centre.
dangerous wildfire seasons, with large outbreaks as
early as March in Spain, and record-breaking fires Wildfires are a global concern. To help tackle the
devastating parts of Greece, Spain and Portugal worst wildfires in Canada in a decade (which burned
in July and August. The wildfire in Greece’s north- around 4 million hectares, an area as big as the
eastern region of Evros was the biggest the EU Netherlands), the EU Member States offered the
has ever seen. According to the European Forest services of around 300 firefighters to the country via
Fire Information System, by 22 July more than the EU Civil Protection Mechanism (see Chapter 8).
181 000 hectares of land across the EU had already
been reduced to ashes – more than 40 % above
the average recorded between 2003 and 2022
(128 225 hectares).

With 7 record-breaking
months and two record-
breaking seasons, 2023 was
the world’s warmest year in
recorded history. According to
the EU’s Copernicus Climate
Change Service, close to
50 % of the days in 2023
were more than 1.5 °C above
the pre-industrial average
(1850–1900).

© AFP

Wildfires rage in the

municipalities of Candelaria
and Arafo, Tenerife, Spain,
16 August 2023.
50
T H E E U I N 2023

Extreme rainfall caused deadly

floods in parts of the EU,
including Croatia, Italy, Austria
and Slovenia.

An aerial view of the areas affected

by flooding and landslides in Emilia-
Romagna, Italy, 25 May 2023.

As a result of the unprecedented floods and forest

fires, calls in 2023 for disaster recovery and
reconstruction support from the European Union
Solidarity Fund mobilised all available resources to On 15 July, the EU inaugurated the annual
provide assistance. Day for the Victims of the Global Climate
Beyond Europe, climate change is also a serious Crisis, to commemorate victims in Europe and
threat to the world’s poorest countries, aggravating worldwide. The event aims to raise awareness
pre-existing crises and requiring greater efforts of the specific steps that people can take to
to meet the rise in humanitarian needs (see help reduce the damage caused by climate
Chapter 8). According to the UN Food and Agriculture change and to be better prepared for climate
Organization, the proportion of low- and middle- disasters.
income countries exposed to climate extremes has
increased from 76 % to 98 % over the last two
decades.
 51

Towards net zero

GENERAL REPORT
The UN Intergovernmental Panel on Climate Change Thanks to existing climate and
report, released in March, once again saw the energy legislation, the EU’s
scientific community issue a stark warning about
the need for action to tackle the climate crisis. The greenhouse-gas emissions have
report reaffirms that the world is warming up rapidly already fallen by 32.5 % compared
due to human influence, with weather extremes to 1990, while the EU economy has
and catastrophes putting lives and livelihoods at
risk around the world. The science is clear: the only grown by 60 % in the same period.
way to halt global warming and lessen the effects
of climate change is by bringing greenhouse-gas To achieve this, in 2021 the European Commission
emissions to net zero. This means achieving a presented the ‘fit for 55’ package of legislative
balance between the amount of greenhouse-gas proposals. In 2022, under the REPowerEU Plan, it
emissions released into the atmosphere and the raised the level of ambition of some of the proposals
amount removed from it. (notably those on energy efficiency and renewable
energy) with a view to further reducing the EU’s
Making Europe the first climate-neutral continent is
dependence on imports of Russian fossil fuels (see
the cornerstone of the European Green Deal. This
Chapter 4). By the end of 2023, the key legislation
objective is enshrined in the European Climate Law,
to achieve the 2030 target of a 55 % net reduction
alongside the legally binding commitment to reduce
was in place (see below). This includes legally binding
net greenhouse-gas emissions by at least 55 % by
targets covering all sectors of the economy, a target
2030, compared to 1990 levels.
to boost natural carbon sinks and an updated EU
Emissions Trading System.

More than 9 in 10 Climate change is considered:

EU citizens consider a very serious problem by 77 %

climate change a
•

a fairly serious problem by 16 %

serious problem.
•

• not a serious problem by 7 %

Source: Special Eurobarometer 538, July 2023.

52

The existing system was strengthened in 2023, A new mechanism for importing goods from outside
T H E E U I N 2023

and its scope was expanded to cover emissions the EU will ensure that a carbon price is set in
from maritime transport. A separate new Emissions targeted sectors. New legislation also includes
Trading System was created to extend carbon pricing updated targets on renewables and energy efficiency,
to new sectors of the economy, in particular to and rules to boost charging infrastructure and the
fuels for buildings and road transport. In addition use of alternative fuels in road transport, shipping
to putting a price on pollution and generating and aviation.
investment in the green transition, the new system
In 2023, the Member States had to submit their
will provide social support for people and small
updated draft national energy and climate plans,
businesses to ensure no one is left behind.
which outline how they intend to meet the EU’s
energy and climate targets for 2030. In December,
The final legislative package is the Commission assessed the plans and issued
recommendations.
expected to reduce the EU’s net
greenhouse-gas emissions by 57 %
by 2030, compared to 1990.

Leaving no one behind

To ensure a fair and inclusive green transition,
€55 billion will be generated in investment over
the current decade to support those living in
the EU regions facing the greatest challenges in
shifting to a climate-neutral economy.
In cooperation with national, regional and local
stakeholders, the EU is helping to diversify
regional economies and give people the chance
to thrive in the new economy (see also
Chapter 6).

V I D E O The Just Transition Platform.

 53

Fit for 55 – adopted legislation

GENERAL REPORT
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reform System for building and road
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• Effort Sharing Regulation • Regulation on Land Use, Carbon dioxide emissions

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• Carbon Border Adjustment • Renewable Energy Directive • Energy Efficiency Directive

Mechanism

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• Alternative Fuels Infrastructure • ReFuelEU Aviation Regulation • FuelEU Maritime Regulation

Regulation
54

The EU’s competitiveness will rely greatly on its by the Emissions Trading System. It aims to bring
T H E E U I N 2023

capacity to develop and manufacture the clean solutions to the market to decarbonise European
technologies required for a successful transition to a industry and support the transition to climate
net-zero economy. To strengthen the competitiveness neutrality, while boosting the EU’s competitiveness.
of net-zero technologies in the EU and support the Some Member States are also supporting the
fast transition to climate neutrality, the Commission manufacturing capacity of innovative technologies
presented the Green Deal Industrial Plan for the Net- under their national recovery and resilience plans.
Zero Age in February 2023. The plan aims to create a The Commission has launched a series of Clean
more supportive environment for scaling up the EU’s Transition Dialogues to be able to support every
manufacturing capacity for net-zero technologies sector in building its business model for the
and products (see Chapter 4). decarbonisation of industry, starting with dialogues
on hydrogen and energy-intensive industries in 2023
The EU is also supporting innovative net-zero
(see Chapter 4).
technologies through the Innovation Fund, financed

Towards a circular economy

During the year, the EU continued to make progress
in moving towards a circular economy, with the aim
of making sustainable products the norm, reducing
pressure on natural resources, cutting waste and
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Every year, more than 5 million tonnes of clothing is

discarded in the EU (over 11 kg per person), yet only Food waste
22 % of this waste is collected separately for reuse
or recycling, while the remainder is often incinerated
or sent for landfill. Proposed new rules on textiles • 58.4 million tonnes
will hold producers accountable for the life cycles (131 kg/person/year) are generated annually in
of their products, in particular waste management, the EU. (Source: Eurostat, 2023.)
thus promoting sustainable textile-waste handling
across the EU. Increasing the availability of used and
recycled textiles is expected to create local jobs and
save money for consumers in the EU and beyond, • Approximately 10 % of all food supplied
while alleviating the impact of textile production on to retailers, food services and households is
natural resources. The ReSet the Trend campaign wasted.
was launched in 2023 to raise awareness about
sustainable fashion.
Food waste has a huge economic, social and
environmental impact. Under a new proposal
• Over half of food waste is generated by
households (54 %).
presented by the Commission in July, Member States
will be expected to reduce food waste in processing
and manufacturing by 10 % by 2030 and by 30 %
(per capita) jointly at the retail and consumption
levels. These new targets will benefit food security
• The second-largest share (21 %) is
from the processing and manufacturing sector.
and cut greenhouse-gas emissions, while also saving
costs for businesses and consumers.
 55

Underpinning these efforts, the Commission has Proposed new rules, which cover all aspects of a

GENERAL REPORT
adopted a revised Circular Economy Monitoring vehicle from its design and placement on the market
Framework to better track progress in the transition to its final treatment, are expected to generate
to a circular economy in the EU, and its contribution €1.8 billion in net revenue by 2035. They will also
to global sustainability and EU resilience. This lead to significant carbon savings and reduced
framework includes new indicators, such as the dependency on raw materials, and create additional
material footprint and resource productivity, to jobs and enhanced revenue streams for the waste-
measure progress towards waste-prevention targets. management and recycling industry.
Every year, almost 6 million vehicles in the EU reach
the end of their life. Inadequate end-of-life handling
of vehicles results in lost value and pollution.

New measures to boost circularity in the

automotive sector could lead to up to 4 million
more cars being recycled and 22 000 more jobs
by 2035.

Virginijus Sinkevičius, European Commissioner for Environment,

Oceans and Fisheries (right), visiting a company that is a front
runner in the area of the circular economy, Belgium, July 2023.

A political agreement was reached on the where appropriate, to broaden the scope of the
Commission’s proposal for new rules on waste requirements with which products must comply.
shipments, which will ensure that the EU takes
Empowering consumers for the green transition is
greater responsibility for its own waste. The export
an important element in achieving the sustainable-
of plastic waste from the EU to countries that are
consumption objectives of the European Green
not members of the Organisation for Economic
Deal. The European Parliament and the Council
Co-Operation and Development will be banned. The
of the European Union reached an agreement in
agreement will contribute to reducing waste pollution
September on the proposal for new rules that will
and advancing the circular economy.
ensure that consumers are better informed about
Products have a significant environmental impact the durability and repairability of the goods they
throughout their life cycle – from the extraction purchase, and better protected against unfair
of raw materials to their manufacture, transport, commercial practices. There will also be a new ban
use and end of life. In December, an agreement on misleading claims on products based on offsetting
was reached on the proposal to make sustainable emissions. The Commission has also presented
products the norm in the EU. The new Ecodesign a proposal to improve access to and information
for Sustainable Products Regulation builds on the about repair services. This promotes repair over
existing ecodesign rules that have successfully replacement during the legal guarantee and requires
driven the improved energy efficiency of products in manufacturers to repair goods that are and will
the EU for almost 20 years. The new law will extend become subject to specific repairability (ecodesign)
the existing framework in two ways: first, to cover requirements under EU law.
the broadest possible range of products; second,
56
Making sustainable choices
To complement measures to empower New rules have been finalised to help
consumers, the Commission has also consumers make informed and eco-friendly
proposed new rules to tackle greenwashing – choices when buying mobile phones and
where products or processes are made to tablets. New ecodesign rules will improve the
appear more environmentally friendly than durability, repairability, reusability and
they really are. Ensuring that environmental recyclability of such devices. Meanwhile, the
labels and claims are credible and new energy label on smartphones and
T H E E U I N 2023

trustworthy will allow consumers to make tablets will detail their efficiency and
better-informed purchasing decisions. It will durability, and a repairability score will guide
also boost the competitiveness of businesses consumers towards sustainable choices. The
striving to rules will apply from 20 June 2025.
increase the
environmental
sustainability of
their products
and activities.

V I D E O The proposed
new law on green
claims.

Advancing the Zero-Pollution Action Plan

Water
In 2023, with the revised Drinking Water Directive In June, in response to evidence that there is now
having been incorporated into national legislation, less rain in many parts of the EU, new requirements
new rules began to apply across the EU. These rules for the safe reuse of treated wastewater in
will ensure some of the highest standards in the agricultural irrigation started to apply.
world for drinking water.

An EU report analysing one of the largest

ecological disasters in Europe in recent memory,
in which around 360 tonnes of fish died in the
Oder River, was published in February 2023. It
identifies the likely cause as being a substantial
toxic algal bloom, and proposes recommendations
to help prevent such a catastrophic event from
happening again.

© Getty Images
 57

Although maritime safety in EU waters is very high,

GENERAL REPORT
with few fatalities and no recent major oil spills,
more than 2 000 marine accidents and incidents are
still reported every year. In June, the Commission
presented five legislative proposals to modernise EU
rules and prevent water pollution from ships. The
proposals also aim to prevent illegal discharges into
European seas in order to lower the environmental
impact of maritime transport activities and preserve
the marine ecosystem.

Increasing maritime safety

Stringent EU safety standards are effective, but new challenges

and technologies require new approaches.

What to expect

Port-state Maritime accident

inspectors inspect investigations
Flag states
foreign ships when determine the root causes
must ensure that the
they are in ports of accidents to prevent
ship is fit to sail
similar cases from
happening in the future

Sharing information Greater use of digital

solutions, such as Improving the safety
between flag states
e-certificates of fishing vessels
on the results of
inspections
Improving Member
States’ ability to
More effective detect safety issues
inspections and environmental
and pollution
non-compliance

Extended support by the European Maritime Safety Agency

58
T H E E U I N 2023

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Chemicals Noise
Under a Commission proposal to protect Noise represents the second-biggest
EU citizens and the environment from toxic environmental health threat in Europe after
mercury, the use of dental amalgam will be air pollution. A report on the implementation
fully prohibited. Some 40 tonnes of mercury is of the Environmental Noise Directive sets out
used annually in the EU for this purpose. The how noise can be further reduced to achieve
proposal will also prohibit the manufacture the reduction target of 30 % by 2030.
and export of certain products containing
mercury, such as lamps.

Industrial emissions Microplastics

The Industrial Emissions Directive regulates The Commission took another major step
around 52 000 larger industrial and livestock in protecting the environment by adopting
installations across the EU. It requires them measures that restrict microplastics
to hold a permit based on the use of best intentionally added to products. The new
available techniques. In 2023, a new series rules will prevent the release into the
of best-available-technique evaluations was environment of around half a million tonnes
made concerning slaughterhouses, animal of microplastics.
by-products and edible co-product industries.
Some 800 slaughterhouses in the EU will have
to comply with these new standards to reduce
their environmental impact.

Check the quality of the environment where you live:

https://discomap.eea.europa.eu/atlas/?page=Check-your-place.
Check the quality of the air around you (also available as a mobile app):
https://www.eea.europa.eu/themes/air/air-quality-index.
 59

Biodiversity

GENERAL REPORT
Nature is vital in combating climate change. The launched in April, brings together regional and local
degradation of the natural environment increases the policymakers, stakeholders and citizens in a vibrant
likelihood and severity of events such as floods and community that cares for soil health. More than
wildfires, making Europe’s nature and biodiversity its 2 100 individuals and 350 organisations had signed
best defence against natural disasters. up to the voluntary initiative by the end of the year.
Signatories recognise the need for action on soil
A provisional political agreement was reached
health and engage in activities for soil protection and
in November on the Nature Restoration Law,
restoration.
setting in motion a process for the continuous and
sustained recovery of nature. Member States will put
restoration measures in place in at least 20 % of
the EU’s land areas and 20 % of its seas by 2030. Pollinators
By 2050, such measures should be in place for all With one in three bee, butterfly and hoverfly species
ecosystems that need restoration. in the EU disappearing, the Commission presented
a renewed initiative in 2023 setting out action to be
taken by the EU and the Member States to reverse
Soil the decline of pollinators by 2030. Citizens have
Healthy soils are crucial for ensuring food increasingly been calling for decisive action against
security, achieving climate neutrality and stopping pollinator loss, most recently through the successful
desertification and land degradation. Yet over 60 % European Citizens’ Initiative ‘Save Bees and Farmers’.
of European soils are unhealthy. The proposal The EU also lowered the maximum residue levels
for a soil monitoring law aims to put the EU on of two neonicotinoid pesticides in food to the
a pathway to healthy soils by 2050 by gathering lowest level that can be measured with the latest
data on the health of soils and making it available technologies. The outdoor use of clothianidin and
to farmers and other soil managers. The new thiamethoxam has already been banned in the EU.
law will also make sustainable soil management The new levels will apply to food and feed products
the norm. The Commission has also published produced in or imported into the EU. This will ensure
guidance on EU funding opportunities for healthy that food placed on the internal market does not
soil for stakeholders. The Mission Soil Manifesto, contribute to the decline of pollinators, regardless of
where it is produced.

Soil health directly affects

EU food security

95 % of our food • Soil erosion costs the 83 % of EU soils More than 23 % of

€1.25
• • •

is directly or indirectly EU billion a contain pesticide agricultural land suffers

produced in soil. year in lost agricultural residues. from compaction,
productivity. reducing productivity.

Images: © Adobe Stock.

60
T H E E U I N 2023

© Arnis Tarassu

Forests In November, the Commission proposed a forest

monitoring law that aims to create a comprehensive
Forests are a crucial ally in the fight against climate knowledge base that will allow Member States,
change and biodiversity loss. The extent to which forest owners and forest managers to improve
land, and the land-use sector in particular, can their response to the growing pressures on forests,
contribute to climate mitigation depends largely on which are exacerbated by climate change. As well as
how these areas are used and managed. Carbon ensuring forests are more resilient to cross-border
removal in the EU land-use sector has decreased threats (pests, drought and wildfires), the monitoring
significantly in recent years, and the land-sink framework will help forest owners and managers
function is in decline. In 2023, the EU upgraded its benefit from ecosystem payment schemes such as
legislation on land use, land-use change and forestry the EU carbon removal certification scheme.
to boost carbon removal and promote sustainable
agricultural and forest land management.

The pioneering EU Regulation on Deforestation-

free Supply Chains, a key building block in the
fight against climate change and biodiversity loss,
entered into force in June. Operators and traders
will have 18 months to implement the new rules.
Once applied, they will ensure that a set of key
goods exported from the EU or placed on the EU
market will no longer contribute to deforestation
and forest degradation, either in the European
Union itself or elsewhere in the world. The list
includes palm oil, coffee, soy and chocolate. The
new rules will also help secure the livelihoods of
millions of people, including indigenous peoples
and local communities across the world, who rely
© Adobe Stock heavily on forest ecosystems.
 61

Sustainable food systems

GENERAL REPORT
The approval of all 28 strategic plans by the of the EU’s agricultural area through appropriate
Commission marked the start of the new Common management practices, with crop rotation expected
Agricultural Policy (CAP) on 1 January 2023. A total on 85 % of CAP-supported arable land.
of €264 billion of EU funding will support European
At a time of growing concerns about food supply,
farmers in the transition towards a more sustainable
the Commission continued its work on mapping
and resilient agricultural sector and help preserve the
the drivers of food security. A new proposal to
vitality and the diversity of rural areas between
enable the safe use of new genomic techniques will
2023 and 2027. Close to €98 billion will be devoted
contribute to the advance towards more sustainable
to delivering benefits for the climate, water, soil, air,
food systems while safeguarding food security.
biodiversity and animal welfare, in line with the
These techniques can create climate-resilient, pest-
objectives of the European Green Deal.
resistant and high-yielding plant varieties, reducing
The new CAP will contribute to EU objectives on the need for chemical pesticides and the EU’s
reducing the use of and risk from chemical pesticides reliance on agricultural imports. The Commission has
and will substantially increase targeted support for proposed new EU legislation on the production and
organic farming. It will also provide incentives to marketing of plant and forest reproductive material
land managers to store carbon in soil and biomass to increase the diversity and quality of seeds,
and to reduce greenhouse-gas emissions in 35 % cuttings and other plant material.

The CAP is not only a tool to support recovery and

restoration measures after a crisis; it also enables
farmers to anticipate and adapt to the effects of
climate change and other challenges. The EU is
looking into how best to support EU farmers, and
how to adapt EU agriculture policies with their
needs in mind. To deliver on this, the Strategic
Dialogue on the Future of EU Agriculture will be
launched in January 2024.

Janusz Wojciechowski, European Commissioner for Agriculture

(foreground, right), visiting communities impacted by floods in
the fields in Thessaly, Greece, October 2023.
62

Animal welfare
T H E E U I N 2023

The EU has been acting to improve animal welfare cats will also be reinforced through mandatory
for over 40 years, progressively making the lives of identification and registration in national
animals better and adopting welfare standards that databases to fight illegal trading, and will allow
are among the highest in the world. This continued for better control of the welfare conditions in such
in 2023 with a proposal to overhaul the current establishments.
EU rules on transporting animals, which will improve
the well-being of the 1.6 billion animals transported The Commission responded during the year to the
within and from the EU each year. The proposal European Citizens’ Initiative ‘Fur Free Europe’ –
focuses on specific objectives, including reducing the 10th successful initiative, supported by over
travel times, increasing minimum space allowances 1.5 million citizens across the EU. While no further
and improving conditions for animals exported from legislation is proposed at this stage, the Commission
the EU. The enforcement of existing legislation envisages a series of measures to address the aims
remains a priority, and regular audits and controls of the initiative, including tasking the European Food
continued during 2023 in various areas. Safety Authority with preparing a scientific opinion on
the welfare of fur animals by March 2025.
In addition, the first-ever rules on the welfare and
traceability of dogs and cats will establish uniform Further measures on animal welfare, for example
EU standards for the breeding, housing and handling the follow-up to the ‘‘End the Cage Age’ European
of dogs and cats in breeding establishments, pet Citizens’ Initiative, are under preparation.
shops and shelters. The traceability of dogs and

What do people in the EU have to say about animal welfare?

The need to better protect The welfare of farmed animals

the welfare of animals

91 % consider it
84 % think that the welfare
•

•
important.
of farmed animals should be
better protected. • 8 % do not
consider it important.

• 74 % think that the welfare

of companion animals should be
better protected.

The welfare of animals is important

Source: Special Eurobarometer 533, October 2023. to people in the EU, as the results of
a Eurobarometer survey published
Images: © Adobe Stock. in October show.
 63

Sustainable fisheries and oceans shark fins, starting with banning the trade on the

GENERAL REPORT
EU market. The Commission will consider whether
Climate change and biodiversity loss threaten the legislation is necessary. It will also step up the
sustainability of fisheries and aquaculture resources. enforcement of EU traceability measures and engage
A package of measures put forward in February sets with international partners to protect and sustainably
out measures to tackle these challenges through manage sharks globally.
the implementation of the Common Fisheries Policy
and a new Marine Action Plan. The measures provide After more than a decade of multilateral
ways to increase the resilience and sustainability of negotiations, the High Seas Treaty was adopted
fisheries and aquaculture, including by supporting in June. This treaty is a historic achievement in
the much-needed energy transition (see Chapter 4). efforts to protect the ocean, tackle environmental
The package contributes to the EU’s commitment to degradation, fight climate change and prevent
protect at least 30 % of its seas (with 10 % under biodiversity loss in the high seas. It has been a
strict protection). The proposed measures will be priority for the EU and its Member States, which
carried out gradually to enable the sector to adapt. led the negotiations at the global level. The treaty
will enter into force once it has been ratified by 60
New rules adopted by the Parliament and the parties.
Council in 2023 aim to help prevent overfishing and
create a more effective and harmonised fisheries The EU formally accepted the World Trade
control system, taking full advantage of modern Organization Agreement on Fisheries Subsidies
technologies. This includes the use of remote on behalf of its Member States. The agreement is
electronic monitoring and CCTV on board fishing crucial for ensuring that fisheries subsidies have
vessels, and the mandatory use of digital tools in sustainability as their core objective and avoid
catch certification and traceability processes to harming the ocean and fish stocks, on which the
prevent imports obtained from illegal fishing. livelihoods of coastal communities around the world
depend. It will enter into force once two thirds of the
The Commission welcomed the European Citizens’ 164 members of the organisation have completed
Initiative ‘Stop Finning – Stop the trade’, which their domestic ratification processes.
asked it to help end the international trade in loose
64

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Sustainable mobility Aviation

T H E E U I N 2023

In October, the EU adopted the ReFuelEU

The EU is investing in a wide range of transport Aviation Regulation to promote the use
projects to improve cross-border infrastructure and of sustainable aviation fuels. The new
promote new technologies through the 2021–2027 rules will require aviation fuel suppliers to
Connecting Europe Facility. Projects that received blend kerosene with increasing amounts of
EU funding in 2023 include major cross-border rail sustainable fuels from 2025. It is projected
connections, notably the Brenner Base Tunnel (linking that this will reduce carbon dioxide emissions
Italy and Austria), Rail Baltica (connecting the three from aircraft by around two thirds by 2050
Baltic states and Poland with the rest of Europe) compared to a no-action scenario, and provide
and the cross-border section between Germany climate and air-quality benefits.
and the Netherlands (Emmerich–Oberhausen). The
€6.2 billion worth of funding supports projects The Alliance for Zero-Emission Aviation,
contributing to a more efficient, greener and smarter launched in 2022, is preparing for the entry
network of railways, inland waterways, roads into service of hydrogen-powered and
and maritime routes, with the majority going to electric aircraft. Close to 300 experts from
sustainable transport modes. To improve cross- the alliance’s 141 member organisations
border rail connections across Europe, the EU are addressing issues fundamental to their
announced support in 2023 for 10 EU pilot projects roll-out. The progress report published by the
establishing new rail services or improving existing alliance argues that the coming years must
ones – making them faster, more frequent and more be used to establish an appropriate regulatory
affordable. framework.

Shipping
The new FuelEU Maritime Regulation,
adopted by the EU in July, will promote the
use of cleaner fuels and energy for maritime
transport, ensuring that the greenhouse-gas
intensity of fuels used by the sector gradually
decreases over time – by 2 % in 2025 to as
much as 80 % by 2050.
The EU welcomed the agreement reached at
the International Maritime Organization to set
a goal of net-zero emissions from ships ‘by or
around, i.e. close to, 2050’. It also welcomed
the indicative checkpoints: at least 20 % –
striving for 30 % – in 2030, and at least
Adina Vălean, European Commissioner for Transport 70 % – striving for 80 % – in 2040 (compared
(right), during the 2023 Urban Mobility Days in to 2008 levels).
Seville, Spain, 4 October 2023.
 65

In addition, the EU invested over €540 million in The Commission has put forward a revision of the

GENERAL REPORT
alternative-fuel infrastructure along the Trans- standards for carbon dioxide emissions from heavy-
European Transport Network. This will translate duty vehicles such as trucks, city buses and long-
into approximately 14 000 charging points and distance buses. These are responsible for over 25 %
81 hydrogen refuelling stations, along with the of greenhouse-gas emissions from road transport
electrification of ports and airports. in the EU and over 6 % of total EU emissions. To
stimulate faster deployment of zero-emission buses
The EU also proposed to revise its Combined
in cities, the Commission proposed to make all new
Transport Directive, with the aim of making
city buses zero-emission as of 2030.
freight transport more sustainable by improving
the competitiveness of using two or more
transport modes.

Reducing carbon dioxide emissions from heavy-duty vehicles

Previous
targets
2025 – 15 %

2030 – 30 %

2030 – 45 %

New
2035 – 65 %
targets
(compared to
2019 levels)
2040 – 90 %
Image: © Adobe Stock.
66

Acting globally for the planet

T H E E U I N 2023

The 2023 UN Climate Change Conference (COP28) in All parties agreed to transition away from fossil fuels
Dubai, United Arab Emirates, marked the conclusion and to take urgent action in this critical decade for
of the first global stocktake under the Paris the climate. With the talks having a particular focus
Agreement to see how much progress countries have on the energy sector, countries agreed to take action
made since the adoption of the global agreement on to reduce emissions by 43 % by 2030 and to set the
climate change. world on a path to reaching net-zero emissions by
2050, in line with the best available science.
The EU led a global initiative at the conference to
triple global renewable energy capacity and double
the rate of energy-efficiency improvements by 2030,
launching the Global Pledge on Renewables and
Energy Efficiency during the talks. With the support
of the COP28 presidency, and backed by some 130
countries, the pledge was endorsed by the entire
world in the conference outcome document, the
‘UAE Consensus’.
The EU announced it would invest €2.3 billion from
the EU budget to support the energy transition in
V I D E O COP28 outcomes. the European Neighbourhood and around the globe
in the next 2 years, through the Global Gateway
strategy (see Chapter 8).
The EU succeeded, with partners from around the Under the Global Methane Pledge, launched by the
world, in keeping alive the possibility of delivering on EU and the United States in 2021, more than 150
the commitment made in Paris in 2015 to limit the countries are now implementing a collective goal to
global average temperature increase to 1.5 °C. reduce global methane emissions by at least 30 %
Recognising that the world is not currently on track below 2020 levels by 2030. At COP28, the EU and its
to reach this goal, the parties agreed a pathway to Member States announced funding of €175 million
get back on course. in support of the Methane Finance Sprint to boost
methane reduction.

Wopke Hoekstra, European Commissioner

for Climate Action, at COP28, Dubai, United
Arab Emirates, 8 December 2023.
 67

Maroš Šefčovič, Executive Vice-President

of the European Commission in charge of
the European Green Deal, Interinstitutional
Relations and Foresight, participates in the
United Nations Framework Convention on
Climate Change meeting in the context
of COP28 in Dubai, United Arab Emirates,

GENERAL REPORT
4 December 2023.

The global stocktake also addressed the means of At the start of the year, the EU partnered with
implementing the necessary transition, with parties 26 countries to launch the Coalition of Trade
agreeing on the final steps towards setting the new Ministers on Climate, the first ministerial-level global
collective quantified goal on climate finance at next forum dedicated to trade, climate and sustainable
year’s conference. A framework for the Global Goal development issues. The coalition aims to drive trade
on Adaptation, which aims to strengthen the world’s policies that address climate change both locally and
resilience to climate change, was also agreed at the globally.
conference.
The EU forged a green alliance with Norway in April,
The EU helped to operationalise the new Loss and and another with Canada in November, to deepen
Damage Fund, which will assist developing countries cooperation on the climate, the environment, energy
that are particularly vulnerable to the adverse effects and clean industry. The EU and South Korea also
of climate change. The EU and its Member States established a green partnership in May, with the aim
contributed more than €400 million to the fund – of strengthening cooperation and exchanging best
over two thirds of the initial funding pledges. practices on climate action, a clean and fair energy
transition, protection of the environment and other
To address the human impact of the climate crisis
fields of the green transition.
in fragile and conflict settings, the EU joined two
new flagship initiatives launched by the COP28
presidency: Getting Ahead of Disasters: A charter Sustainable Development Goals
on finance for managing risks and the Declaration
on Climate, Relief, Recovery and Peace. The charter The first voluntary review by the EU on the
sets out principles to ensure better use of finance implementation of the 2030 Agenda for Sustainable
to manage risks and protect people in the most Development shows that it is fully committed to
vulnerable countries, while the declaration calls for delivering the 17 Sustainable Development Goals,
urgent financial support for climate adaptation and which were adopted by all UN member states
resilience in those countries. in 2015.
At the UN Water Conference in March, the first The EU has firmly placed sustainable development
summit of its kind in almost 50 years, the EU at its core, and is making efforts to advance
confirmed its strong commitment to ensuring global the 2030 Agenda both at home and around the
water resilience and security. The EU delegation world by supporting partner countries in their
presented 33 voluntary commitments to the implementation efforts.
Water Action Agenda, a platform to accelerate The EU has integrated the goals into its policies,
global progress on the water-related Sustainable budgets and long-term planning. Through its
Development Goals. comprehensive whole-of-government approach, the
European Green Deal is leading the way towards a
more sustainable and prosperous future for all.
68
T H E E U I N 2023

4. Ensuring
© AFP

affordable, secure
and sustainable
energy for Europe
Introduction
After facing one of the worst global energy crises in The EU launched a comprehensive reform of
decades, in 2023 the European Union took drastic its electricity market so that consumers will
action to save energy, diversify its energy supply be better protected against energy price shocks.
and accelerate the clean-energy transition. The It also introduced new initiatives to boost its
continuing climate, environmental and biodiversity competitiveness and build industrial capacity for
emergencies unfolding all over the world further clean technologies. These initiatives aim to ensure
highlighted the need for urgent action. During the access to critical raw materials and reduce strategic
year, the EU continued phasing out Russian fossil dependencies in critical technologies and value
fuels to safeguard its economy, while making it chains, thereby improving the EU’s economic security
more sustainable through an increase in renewable- and technological sovereignty.
energy production and energy-efficiency measures.
 69

Energy security

GENERAL REPORT
Gas imports from Russia

Phasing out Russian fossil fuels (billion cubic metres)

To ensure that people in the European Union have 2021 155
access to energy that is affordable, secure and
sustainable, the EU launched the REPowerEU Plan
in May 2022. Its objective is to significantly reduce
the EU’s dependence on Russian fossil fuels by 2022 80
producing more clean energy at home, reducing
energy consumption and diversifying the EU’s energy
supplies. Within the first 12 months of its launch, the
EU had made substantial progress on these three 2023 42.9
goals.
By the end of 2023, overall EU imports of Russian
gas amounted to just 42.9 billion cubic metres (bcm), A further EU measure to address security-of-supply
compared to 80 bcm in 2022 and more than issues, introduced in 2022, is the Gas Storage
150 bcm in 2021. During the year, Norway and Regulation, which requires Member States to fill
North Africa were again the main suppliers 90 % of their storage facilities by 1 November
of pipeline gas to the EU, while the United States to guarantee sufficient stocks for the winter. This
was the main supplier of liquified natural gas. measure helped ensure that stocks reached 95 %
of capacity ahead of the winter of 2022/2023.
In addition to REPowerEU, several tools are helping With prices substantially lower – and less volatile –
the EU Member States diversify their gas supply. One than in 2022, progress on filling storage moved
of these, the AggregateEU common gas purchasing particularly swiftly in 2023, reaching the 90 % target
mechanism, allows gas and gas-consuming on 18 August and remaining at over 95 % at the
companies to band together to pool demand, start of December.
coordinate on infrastructure use, negotiate with
international partners and prepare for joint gas and
hydrogen purchases.

Ursula von der Leyen, President of the European Commission

(fourth from left), and Jens Stoltenberg, Secretary General
of NATO (fifth from left), on a visit to one of the Norwegian
company Equinor’s natural gas extraction platforms located
© NATO
off the west coast of Norway, 17 March 2023.
70
T H E E U I N 2023

A liquefied natural gas (LNG) carrier at

a shipping terminal recently deployed in
Germany to import gas as an alternative
to the Nord Stream gas pipelines,
Brunsbüttel, Germany, September 2023.
LNG is natural gas that has been cooled,
changing it from a gas into a liquid
that is one 600th of its original volume.
This significant reduction allows it to be
shipped safely and efficiently aboard LNG
carriers.

Several new energy infrastructure projects completed Published every 2 years, the list contains projects
over the last 2 years have also helped the EU to that will improve the interconnectivity of the Member
secure alternative sources of gas supply. Examples States’ energy systems. The projects can benefit
include the Baltic Pipe and the Interconnector from accelerated permitting procedures and funding.
Greece–Bulgaria, along with new terminals for It is the first list under the revised Trans-European
liquified natural gas in various Member States. Network for Energy Regulation to exclude fossil
fuel projects and include hydrogen and electrolyser
In November, the EU took another step towards
projects. It also includes projects that will link the
making the EU’s energy system fit for the future by
EU’s energy system with the United Kingdom, the
publishing the first of its lists of Projects of Common
Western Balkans and North African countries.
Interest to be fully in line with the European Green
Deal. It is set for formal adoption in early 2024.

Access to affordable energy

Since summer 2021, energy prices have skyrocketed, 20 years, the energy crisis has shown that further
severely affecting consumers and putting many at improvements are necessary. That is why the
risk of energy poverty. In 2023, the EU focused on Commission presented a proposal in March 2023
introducing rules that reform the energy market to revise the rules of the EU’s electricity market
to protect consumers against future price shocks. design. This reform will give consumers more rights
These long-term measures supplement emergency and options, while simultaneously increasing their
measures taken in 2022, such as the market protection by making energy bills independent
mechanism that limits excessive gas prices and from the short-term market price of electricity and
an extra contribution imposed on certain energy by making the EU energy market more resilient.
companies that are making excessive profits. The European Parliament and Council reached an
agreement on the reform at the end of the year.
Although the EU has a well-integrated single energy
market that has benefited consumers for over
 71
The revised EU electricity market design
empowers and protects consumers
Consumers now have the right to: • It protects vulnerable
customers from
• fixed-price contracts, allowing them to lock in
disconnection.
secure, long-term prices;
• It protects against future
• multiple contracts;
market manipulation and energy uncertainty.
• share the renewable energy they produce with
• It requires energy suppliers to guard against high
neighbours.
price spikes and the risk of failure.

GENERAL REPORT
The EU’s efforts to diversify its energy supplies and this price was no longer proving reliable as it did
suppliers have also helped to reduce energy prices – not reflect the new market conditions. A benchmark
and their volatility – relative to the excesses seen figure is now published regularly by the European
in 2022. The EU Energy Platform (and specifically Union Agency for the Cooperation of Energy
the AggregateEU mechanism mentioned earlier in Regulators, showing much less volatility than the
the chapter) pools demand and carries out joint Title Transfer Facility price.
purchases of energy. This translates into better
Finally, the EU has enabled Member States to directly
prices for EU consumers.
support vulnerable families and small and medium-
The Commission has also introduced a mechanism to sized enterprises through exceptional measures
correct price peaks in the gas market by establishing known as SAFE (Supporting Affordable Energy).
a new benchmark price for liquified natural gas. This Falling under cohesion-policy rules, these measures
was necessary as an alternative to the previous allow Member States to use unspent EU funds under
approach whereby the gas price used by the Dutch their 2014–2020 allocation to provide direct support
Title Transfer Facility was used as a proxy. However, to at-risk groups facing increased energy costs.

Efficient use of energy

The energy sector – heating of homes, powering 1990 levels), as set out in the European Green Deal
industry sectors, and transport – is responsible for (see Chapter 3).
almost three quarters of global greenhouse-gas
In the winter of 2022/2023 – thanks to milder
emissions. This means that reducing energy
weather and the joint efforts of the EU, its Member
consumption makes a big difference in the fight
States, individuals and companies – gas consumption
against climate change. The EU wants to reduce its
in the EU fell by 18 % (or 53 bcm). However, to
emissions by at least 55 % by 2030 (compared to
keep a careful balance between energy supply and
demand, voluntary measures to save energy are
still needed. The emergency regulation on reducing
gas consumption (originally agreed in July 2022),
has therefore been extended. The aim is to reduce
consumption by a further 60 bcm between April
2023 and March 2024. Other emergency rules from
2022 on the market correction mechanism, solidarity
rules and permitting have also been extended to
guard against further problems.

© Adobe Stock
72

The new Energy Efficiency Directive has established more ambitious long-
T H E E U I N 2023

term goals for energy consumption

• A new target to reduce energy • Member States must achieve an
consumption by 11.7 % by 2030 annual saving of 1.3 % of final
relative to forecast consumption energy consumption by 2024, rising
(the original target proposed in to 1.9 % by 2028, up from the
2021 was 9 %). 2023 level of 0.8 %.

Improving the use of energy in buildings is another improve their products’ performance. Tumble dryers,
important way to save energy. The political local space heaters, mobile phones, tablets and
agreement on revisions to the Energy Performance industrial fans are among the products subject to the
of Buildings Directive in December will help the new or revised, and stricter, rules. These changes will
building sector reduce its energy consumption and be reflected in the EU energy label, which continues
make buildings greener. These revisions set out a to be widely recognised and used by consumers in
range of measures to help EU governments boost the EU.
the energy performance of buildings, with a specific
The EU aims to make sustainable products the norm.
focus on improving the worst-performing buildings.
Towards the end of the year, the Parliament and the
Energy savings are achieved not only by using less Council reached an agreement on the Sustainable
energy and using it more efficiently, but also through Products initiative, proposed in March 2022, which
the design of everyday products and appliances by challenges the traditional ‘take-make-dispose’
manufacturers. The new EU ecodesign rules specify consumption model. The initiative aims to ensure
that electrical appliances should use less energy that products are built to last, thereby decreasing
in standby mode, giving manufacturers 2 years to waste and conserving resources.

The Commission estimates that reducing the

electricity consumption of products in standby
mode will save 1.36 million tonnes of carbon
dioxide per year. These savings are also good
for consumers’ wallets, with the total savings
for consumers estimated at €530 million a year
by 2030.
 73

Accelerating the production of green energy

GENERAL REPORT
Switching to clean, renewable energy is essential networks, including €35.51 billion specifically for
to realising the European Green Deal’s goal of a renewable-energy generation. The Recovery and
climate-neutral Europe. The REPowerEU Plan, which Resilience Facility also enables Member States to
is central to this transition, focuses on green energy allocate funding to Important Projects of Common
production, phasing out Russian fossil fuels and European Interest in areas such as hydrogen and
promoting energy conservation. The Recovery and batteries.
Resilience Facility and the Green Deal Industrial
In addition to the facility’s support for investment
Plan are pivotal in supporting REPowerEU, providing
in both mature and innovative renewable-energy
financial and strategic backing for the shift towards
technologies, a range of broader initiatives was
renewable energy and the broader goal of a climate-
introduced in 2023 to address the structural
neutral Europe.
challenges affecting the EU’s clean-energy sector.
The Recovery and Resilience Facility plays a One of these initiatives, the Green Deal Industrial
significant role in the financing of green energy Plan, aims to enhance the competitiveness of
projects and infrastructure to accelerate the net-zero technologies in the EU (thus speeding
transition towards renewable energy, with about up the transition to climate neutrality) by building
42 % of its funds dedicated to the green transition. on the strengths of the Single Market. The EU has
(See Chapter 2 for more on the facility.) Member simplified regulations so that it is easier to obtain
States are amending their recovery and resilience the raw materials needed for clean technologies,
plans to include a dedicated REPowerEU chapter, and has made it easier to obtain funding for green-
meaning that they will show how they will address energy technologies. It is committed to upskilling
its objectives in their recovery plans. To date, 23 and reskilling people to work in the clean-technology
Member States have submitted their REPowerEU sector, and to improving open trade to ensure access
chapters, with €61.87 billion from the amended to raw materials and so that green technologies can
plans allocated to renewable energy and energy thrive. As a result, communities will benefit from the
high-quality jobs that the clean-technology industry
provides, while individuals will enjoy the advantages
of a cleaner environment and a more sustainable
market economy.
The European Green Deal
Making Europe the first climate-neutral
continent by 2050
The Green Deal Industrial Plan
Building the industrial capacity for the clean
c
technologies that make up the European Green Deal.
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REPowerEU
Responding to energy-market disruption with
affordable, secure and sustainable energy for Europe.

The Recovery and Resilience Facility

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green and digital transitions.
74

The Green Industrial Plan is based on four complementary pillars

T H E E U I N 2023

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•A predictable and • Faster access to • Enhanced skills • Open trade for resilient
simplified regulatory funding supply chains
environment

As part of the Green Deal Industrial Plan – Amid global demand for critical raw materials, and
specifically relating to simplifying the regulatory in a fast-changing and increasingly challenging
environment for the clean-technology sector – the geopolitical environment, it is crucial to ensure that
Commission also introduced proposals in March the EU has access to a secure and sustainable supply
2023 for a Critical Raw Materials Act and a Net-Zero of these materials. This is also essential for the EU’s
Industry Act. These two acts will work in tandem to competitiveness, particularly in sectors such as green
support the EU’s net-zero manufacturing capacity and digital technologies and in the defence and
and ensure the availability of necessary raw aerospace industries.
materials for manufacturing clean technologies in
Formally agreed by the Parliament and the Council
the EU.
in November, the Critical Raw Materials Act will
strengthen domestic capacities for critical raw
materials throughout the entire supply chain. It
Critical raw materials establishes clear targets to increase extraction,
processing and recycling capacities by 2030.
Critical raw materials are at the beginning of many Moreover, the EU will diversify its import sources to
industrial supply chains, and global demand for them avoid relying on any single supplier for more than
is increasing. 65 % of its consumption. This strategy includes
forming international partnerships, supported by the
Global Gateway.
• Rare earth elements are key The Net-Zero Industry Act will strengthen the
components of permanent magnets resilience and competitiveness of the EU’s sector
used in wind turbine motors. for the manufacturing of net-zero technologies,
k
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energy system. The act will improve conditions
• Lithium, cobalt and nickel are used for setting up net-zero projects in the EU and
in battery manufacturing. attracting investment. It sets an ambitious target:
by 2030, the EU’s strategic capacity for net-zero-
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technology manufacturing should meet or exceed
Silicon is used for 40 % of the EU’s deployment needs. Achieving this
will significantly accelerate progress towards the
•

semiconductors.
European Union’s 2030 climate and energy targets
and the broader transition to climate neutrality.
Moreover, it will boost the competitiveness of EU
industry, create high-quality jobs and support the
EU’s efforts to achieve energy independence.
 75

Finally, the EU’s aim to speed up the use of In December, a political agreement on the low-

GENERAL REPORT
renewables, notably those produced in Europe, carbon gas and hydrogen package marked another
is also reflected in its energy policy. One of the significant milestone. This initiative is designed to
biggest milestones of 2023 was the revision of promote the use of renewable and low-carbon gases,
the Renewable Energy Directive to accelerate the with a particular emphasis on establishing a market
roll-out of renewable energy. This revision raised for renewable hydrogen.
the EU’s renewable-energy target to a minimum of
In March, the European Clean Hydrogen Alliance – set
42.5 % by 2030, with the ambition of reaching 45 %,
up in 2020 to support the large-scale deployment
compared to the previous goal of 32 % set in 2018.
of clean hydrogen technologies by 2030 – published
The revised directive addresses recent bottlenecks
a roadmap on hydrogen standardisation. It provides
and inefficiencies by introducing new measures on
a comprehensive overview of the standardisation
renewable hydrogen and on renewables in transport
gaps, challenges and needs identified by alliance
and industry. It also clarifies technical issues,
members. The alliance also published a Learnbook on
including sustainability criteria for bioenergy, and
Hydrogen Supply Corridors, which provides an up-to-
makes permanent the previously temporary rules
date overview of the evolution of key infrastructure
put in place to shorten and simplify the permitting
projects across the EU that are required to establish
procedures for renewable-energy projects.
the low-carbon European Hydrogen Backbone. This is
an initiative that aims to make use of both existing
Renewables and new gas pipelines to create a hydrogen network
across the continent.
After adopting the EU Solar Energy Strategy and
launching the Biomethane Industrial Partnership in As regards renewable hydrogen production, the
2022, the EU shifted its focus in 2023 to renewable European Electrolyser Partnership renewed its
hydrogen and wind power. commitment to the joint declaration in 2022 on
expanding EU electrolyser manufacturing capacity by
In terms of hydrogen and getting this new a factor of 10 by 2025.
technology off the ground, the first step was to
define what counts as renewable hydrogen. This The Commission has also proposed to establish a
was set out in the Hydrogen Delegated Acts, which pan-European hydrogen facility, called the European
also stipulated the importance of creating additional Hydrogen Bank. The Hydrogen Bank will ensure
renewable energy to produce renewable hydrogen. investment security and business opportunities for
Setting these EU standards is crucial for the European and global renewable hydrogen production.
expansion of this sector. It will do so through two financing mechanisms

Kadri Simson, European Commissioner for

Energy (left), and Pascal De Buck, Managing
Director and Chief Executive Officer of
Fluxys (right), on a site visit during the
construction of a gas pipeline carrying
hydrogen, Lokeren, Belgium, 7 July 2023.
76

Frans Timmermans, then Executive Vice-

President of the European Commission
in charge of the European Green
Deal, speaking at the World Hydrogen
Summit 2023, Rotterdam, Netherlands,
11 May  2023.

(one to stimulate EU production of hydrogen, the To address some of the issues still present in the
T H E E U I N 2023

other for international imports into the EU); by sector, the Commission presented the European Wind
assessing demand and infrastructure needs; and by Power Action Plan in October.
coordinating different sources of funding for more
streamlined investment in sustainable hydrogen. The action plan includes the launch of the Accele-RES
initiative, which will help digitalise the permitting
The Commission signed a joint declaration with
process and will launch a dedicated online tool to
European stakeholders in March to boost research
assist with permitting procedures. In addition, the
and innovation on renewable hydrogen in order to
plan will strengthen the competitiveness of the EU’s
advance the deployment of renewable hydrogen and
wind manufacturing industry by making it easier
drive forward the clean-energy transition.
for EU manufacturers to access foreign markets;
The EU has also taken action to accelerate the protect against trade distortions (such as the unfair
deployment of and innovation in wind power. As subsidisation of wind-related products imported into
opposed to hydrogen power – which is still in its the EU); and standardise wind-energy equipment to
early stages – the EU’s wind-power sector is already improve interoperability, quality and sustainability.
a success story. This sector has achieved a levellised
Finally, 21 Member States submitted wind pledges at
cost of energy that is on par with or even below
the end of 2023, indicating the wind-power projects
that of fossil fuels, and in 2023 (January to August),
and wind-energy deployment volumes they envisage
wind energy accounted for, on average, 17.2 % of
for the immediate future (2024–2026). This will
electricity consumed in the EU. However, some issues
create more certainty for both manufacturers and
remain. Permitting delays, skills shortages and the
investors, leading to more wind-power projects being
way in which national tenders are designed to favour
launched.
cost over sustainability are some of the challenges
faced. Moreover, wind turbine manufacturers
lack clear wind deployment plans from Member
States, complicating project planning amid global
competition and commodity cost surges.

The European Wind Power Action Plan consists of six main parts that address related
concerns, and will help wind power capacity grow from 204 gigawatts in 2022 to the
desired goal of 500 gigawatts in 2030

1 Acceleration of deployment and

permitting

6 Industry engagement 2 Improved auction

and Member State design
commitments

5 Skills 3 Access to finance

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4 A fair and competitive

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 77
A battery-based energy storage facility
(implemented by the company Energy
Cells), totalling 200 megawatts and with
a 200 megawatt-hour capacity, Vilnius,
Lithuania, 25 July 2023. This project
received €87.6 million of funding from the
Recovery and Resilience Facility, and will
enable Lithuania to disconnect from the
Russian-controlled electricity grid while
simultaneously helping it synchronise with
the continental European electricity grid.

GENERAL REPORT
Supporting the transition to renewable energy
Switching to renewable energy also means finding European Union designated 2023 the Year of Skills
ways to capture and store it for times when, for (for further details, see Chapter 6).
example, the wind is not blowing and the sun is not
In 2023, in addition to addressing specific skills
shining.
shortages through initiatives like the Wind Power
One way to store renewables is by making use of Action Plan, the Commission helped launch a
batteries. Since 2017, the European Battery Alliance, large-scale skills partnership for energy-intensive
set up by the EU to support the European battery industries and a large-scale renewable energy skills
ecosystem, has been playing a vital role in partnership. These partnerships will ensure that the
supporting progress in this area. Its seventh high- workforces from these industries are equipped with
level meeting took place in March 2023, and the right skills to keep up with the EU’s transition
emphasised the importance of equipping enough to renewable energy and help them to navigate
people with the skills needed for the battery industry. the changing labour market. The partnerships aim
to both identify skill gaps and develop appropriate
Ensuring a just transition and upskilling workers in
curricula and training programmes to address these
industries that are affected by the switch to clean
gaps.
energy are other important aspects of making the
transition to renewables. Against this backdrop, the

The fisheries and aquaculture sector’s

energy transition
In February 2023, the Commission presented a
communication on the energy transition of the EU
fisheries and aquaculture sector. The measures
under the initiative aim to support the transition
of the sector to cleaner energy sources, thus
helping to reduce the sector’s current dependence
on fossil fuels, which is not only environmentally
unsustainable, but also makes it vulnerable to © ULSTEIN
energy price increases. (For further details, see
Chapter 3.)
A Danish eco-friendly fishing vessel design, with fuel savings
of at least 25 % per kilo of fish product. Innovations such as
these, along with structures put in place by the EU, will speed
up this sector’s energy transition.
78

These partnerships also complement existing chain together to exchange ideas and best practices
T H E E U I N 2023

initiatives, such as the European Battery Alliance on how to strengthen the industrial dimension of
Academy, which aims to train, reskill and upskill the European Green Deal. The second dialogue took
workers to meet the demand for skilled workers in place with representatives from energy-intensive
the rapidly growing European battery value chain. industries.
Currently, the academy is developing and rolling out
Finally, to support the switch to renewable energy,
cutting-edge training in cooperation with education
the EU is giving practical advice and tailor-made
and training providers across the Member States.
guidance to Member States through the Technical
The Net-Zero Industry Act and the Critical Raw Support Instrument. In 2023, this instrument
Materials Act have also introduced key initiatives to helped 17 Member States to identify reforms and
promote a skilled workforce in the EU. The Net-Zero investments needed to phase out Russian fossil
Industry Act establishes Net-Zero Industry Academies fuels. The areas of technical support included faster
to support the production of net-zero technologies. permitting for renewable energy; energy efficiency
Similarly, the Critical Raw Materials Act creates a and building renovation; hydrogen and biomethane
Raw Materials Academy, focusing on enhancing skills production; diversification of gas supply; and industry
that are essential for the workforce in the critical raw decarbonisation. This support will contribute to
materials supply chain. achieving the green transition and reducing the
price of energy, to the benefit of individuals and
2023 also saw the launch of the Clean Transition
businesses.
Dialogues. The first of these focused on hydrogen,
bringing representatives of the entire hydrogen value
 79

GENERAL REPORT
© AFP
5. A Europe fit for
the digital age
The humanoid robot NAO is introduced at an inclusive daycare
centre, where it accompanies the children in their everyday lives,
Karlsruhe, Germany, 7 June 2023.

Introduction
The EU supports a human-centric, sustainable However, there are still many challenges associated
vision for digital society that empowers citizens with the digital transformation, and the EU is tackling
and businesses and acts as a catalyst for climate them through a comprehensive framework known as
action. Digital society and digital technologies bring the Digital Decade. In 2023, the EU stepped up action
with them new freedoms and rights, along with new to strengthen cybersecurity and data protection,
opportunities to learn, entertain, work, explore and provide guard rails for artificial intelligence (AI),
fulfil ambitions beyond physical communities and curb unfair practices in the digital space and
geographical places. protect the rights of users of digital services, with
special attention paid to the most vulnerable – our
children. Other priorities included measures to
improve connectivity, mobility, education and judicial
cooperation.
80
T H E E U I N 2023

V I D E O Once upon a Time in Europe’s Digital Decade.

Progress on the Digital Decade

The aim of the Digital Decade is to ensure all with people at its core. It also showed the potential
aspects of technology and innovation work and the success of their collective efforts. A standout
for people. From advancing digital skills and point was the pressing need to boost investment in
modernising infrastructure to integrating AI into digital technologies, skills and infrastructure.
business practices and enhancing public services
with digital tools, the EU is committed to a holistic
transformation. In September 2023, the inaugural Digital Europe Programme
report on the Digital Decade reviewed the EU’s The European Commission has formalised its
digital progress. It provided recommendations to EU commitment to digital leadership with the adoption of
Member States to help achieve the Digital Decade’s the Digital Europe Work Programme for 2023–2024.
ambitions. The report also included the annual The work programme comes with strategic investment
Digital Economy and Society Index and analysed the that will be instrumental in achieving the Digital
implementation of digital multi-country projects – Decade ambitions. More than just a monetary
large-scale projects that no single Member State commitment, this programme is about the EU’s
could develop on its own. technological sovereignty, which goes hand in hand
Furthermore, the document examined how Member with the European Green Deal. With it, the EU is
States implemented the Declaration on Digital Rights charting a course to a digital future, in which
and Principles, reflecting the EU’s commitment to a individuals, businesses and government bodies all
secure, safe and sustainable digital transformation, stand to benefit.

Digital Europe Programme funding for 2023–2024

 81

Digital Europe Programme: key highlights of 2023

GENERAL REPORT
March
Adoption of two multiannual work programmes
for the Digital Europe Programme.

Calls open to businesses, public administrations

and other entities from the EU Member States,
EFTA/EEA countries and associated countries.
May
The Commission launches:
• the first set of calls for
proposals, worth over
€122 million, to strengthen
digital technologies and
competences across the EU;
• two sets of calls, together
worth €107 million, to
30 June
strengthen cybersecurity The Commission signs association
in the EU. agreements on the Digital Europe
Programme with Montenegro,
North Macedonia, Albania and Serbia on
the margins of the Regulatory Dialogue
with the Western Balkans.
31 August
Association agreement sealed
with Türkiye.

28 September
Launch of calls supporting
advanced digital skills and
data spaces.

21 November
Launch of calls supporting
advanced digital skills.

14 December
Adoption of amended 2024
work programmes.
82

Digital for industry

T H E E U I N 2023

Connectivity such as social credit scoring. The act also aims

to encourage innovation by setting up regulatory
Navigating the digital transformation demands sandboxes – special frameworks where businesses,
both rapid adaptation and increased connectivity. In particularly start-ups, can test new products and
February 2023, the Commission rolled out a plan to services in a real-world environment without the
bring gigabit connectivity to every corner of the EU. usual regulatory challenges.
The proposed gigabit infrastructure act aims to cut
the time required for and the cost of rolling out very- In an effort to establish international standards
high-capacity networks. To help national authorities for trustworthy AI, the Commission is working with
navigate this, the draft gigabit recommendation like-minded partners, such as the G7, including
outlines the conditions under which operators can through the Hiroshima AI process. The Commission
access competitors’ networks. On top of this, the contributed to and welcomed the G7 leaders’
Commission launched a consultation at the same agreement on International Guiding Principles
time to gather views on the future of the electronic for AI and on a voluntary Code of Conduct for AI
communications sector and its infrastructure. developers.
In 2023, the EU took further steps in building up a
world-class supercomputer network in its Member
Artificial intelligence and States. The European High Performance Computing
supercomputers Joint Undertaking – a legal and funding entity
that brings together EU companies to develop
From interactions with chatbots to tailored online supercomputers – selected a vendor to acquire,
recommendations, people in the EU are making AI an supply, install and maintain Jupiter, the first European
integral part of their daily lives. Given its widespread exascale supercomputer (a computer capable of
use, it is crucial that a framework be put in place to performing more than a quintillion calculations per
prevent misuse and protect people’s privacy. second). In addition, in June, the joint undertaking
The EU aims to be a leader in AI that people can signed hosting agreements with six sites across the
trust. It wants to improve research and industrial EU (in Czechia, Germany, Spain, France, Italy and
capacity, while making sure that the technology Poland) to host and operate quantum computers.
remains safe and that people’s rights are protected. The EU has used its world-class network of
In December, negotiations between the European supercomputers to bring generative AI ‘made in
Parliament and the Member States in the Council Europe’ to the international stage. This move will help
of the European Union on the groundbreaking AI start-ups across the EU to train their AI models faster.
Act resulted in a political agreement. The world’s
first comprehensive legal framework for AI will
promote its growth in the EU for the benefit of all
© AFP
and manage the risks that come with the technology.
It provides AI developers, deployers and users with
clear requirements and obligations for its safe use
in the EU; ensures that AI respects the fundamental
rights of individuals in the EU; and prohibits practices

Margrethe Vestager, Executive Vice-President of the European

Commission in charge of a Europe Fit for the Digital Age and
European Commissioner for Competition (fifth from right), at the
meeting of the G7 Digital and Technology Ministers, Takasaki,
Japan, 30 April 2023.
 83

Supercomputers in the EU

EU supercomputers introduced in 2023

GENERAL REPORT
It is announced that the Jules Verne consortium
June will host and operate the EU’s second exascale
supercomputer in France.

Linköping University in Sweden is selected to host

and operate Arrhenius.

Deucalion is inaugurated in Guimarães, Portugal.

September
The new system will improve energy-saving
technology, weather forecasting and marine
research, and will help develop new medicines
and environmentally friendly energy methods,
among other things.

EU supercomputers
October The procurement contract for Jupiter, the EU’s already in operation
first exascale supercomputer, is signed.

December MareNostrum5 is deployed in Barcelona, Spain.

LUMI

Karolina

MeluXina Vega
Discoverer

Leonardo
The Deucalion supercomputer at the
Portuguese Foundation for Science
and Technology, University of Minho,
Guimarães, Portugal, 6 September 2023.
84

Semiconductors
T H E E U I N 2023

Semiconductors – commonly referred to as chips – steer the EU towards technological sovereignty in

are the hearts and brains of today’s electronics. semiconductor technologies and applications. Its
The European Chips Act, which came into effect on ambitious target is for the EU to double its global
21 September, is a bold step towards strengthening market share in semiconductors to 20 % by 2030.
the European semiconductor sector. It will also
Since the
Act was
The European Chips Act proposed in
early 2022,
more than
Threethe
Supporting pillars 2023 achievements
Monitoring €100 billion
development market of industrial
and innovation developments investmen

• Supporting the development of and innovation in • In November 2023, the Chips Joint Undertaking
advanced chip technologies through the Chips Joint announced its first calls dedicated to pilot production
Undertaking. lines. The initial call provides €1.67 billion from
the EU, expected to be topped up by Member
States and private funds
Since theto a total of around
€3.3 billion. The jointAct
undertaking
was will strengthen
the EU’s semiconductor proposed in and Europe’s
ecosystem
technological leadership.
early The
2022, objective is to bridge
the gap between laboratories
more thanand manufacturing.
Supporting the This means translating €100research
billion and prototypes
Monitoring
development developed in laboratories into
of industrialscalable processes for
market
factory production. investmen
and innovation developments

• Attracting large-scale investment to produce chips in • Since the act was proposed in early 2022, more
the EU and ensure a stable supply. than €100 billion of industrial investment has been
announced in the EU.
Monitoring
market
developments

• Monitoring market developments and anticipating • The Semiconductor Alert System was introduced
future crises through a mechanism for coordination in May 2023 to monitor the semiconductor supply
between the European Commission and the Member chain for potential risks.
States.
 85

European Strategy for Data

GENERAL REPORT
Data provide the fuel for digital transformation,
innovation and growth. Certain public-sector data – such
as weather or air-quality data – that have societal,
environmental and economic benefits should be freely
available. In January 2023, the Commission published
a list of high-value datasets that must be available for
free, in machine-readable formats.
What is a European Digital
The Data Governance Act, which has been applicable
since September 2023, will unlock the potential of
Innovation Hub (EDIH)?
public data and promote trust in voluntary data sharing.
It will regulate the reuse of publicly held protected data EDIHs are one-stop shops, spread across the
and introduce common logos to identify intermediaries Member States, that help businesses and public-
and data altruism organisations in the EU. The act also sector organisations address digital challenges
seeks to remove technical barriers, with the help of and become more competitive.
the European Data Innovation Board. The Commission
presented plans during the year for a European Tourism
Data Space and a European Public Procurement Data
Space. It has also set out the framework for both a
European Tourism Stakeholder Collaboration Platform • More than • Co-financed with
and an innovative Public Buyers Community Platform 150 EDIHs €314 million
for better cooperation between public buyers. have been established under the Digital
In November, the EU adopted a new Regulation on throughout Europe Europe Programme
harmonised rules on fair access to and use of data (the
Data Act), which is to apply from 2025. It aims to boost
the EU’s data economy, improve access to industrial
data and promote a reliable EU cloud market. The
Data Act will provide more control over data, promote Who does an EDIH help?
innovation and encourage further data creation.
EDIHs help small and medium-sized enterprises,
Support for businesses mid-caps and public-sector organisations respond to
digital challenges. Their mission aligns with Europe’s
Every business, regardless of size, must embrace Digital Decade goal of ensuring that over 90 % of
digital transformation to stay competitive. The small and medium-sized enterprises reach at least
European Digital Innovation Hubs provide answers a basic level of digital intensity by 2030.
and support to businesses that need help during their
digital transition. How can an EDIH help?

EDIHs offer a wealth of services, providing

technical expertise, professional training and
financial advice.
86

Digitalisation of company law Digitalisation of transport

T H E E U I N 2023

Modern business also calls for a sharper legal and mobility

framework. With the further development of online Just as digital business rules foster economic growth,
tools for company set-up and cross-border activities, digital transport ensures that growth is sustainable,
doing business in the EU is becoming easier. The latest efficient and far-reaching. The EU has therefore
Commission proposal in this regard aims to expand the adopted new rules to boost intelligent transport
use of digital tools and processes in EU company law. systems. This update to the current directive on
Its once-only principle is set to reduce administrative the subject optimises multimodal travel planning,
burdens, as companies expanding within the EU will not streamlines traffic management and encourages
have to resubmit information. Moreover, the Business eco-friendly travel. A proposal for a unified European
Registers Interconnection System ensures company Mobility Data Space was also adopted in November, to
data remain both trustworthy and easily accessible simplify data sharing and pooling.
across the EU.
The EU has also been working on making roads safer.
A big step towards this in 2023 was the proposal to
Combating online piracy modernise driving licence rules. The proposal includes
introducing a digital driving licence that would be
Sharing copyrighted content without permission
valid across the EU. It will also make enforcing traffic
harms creative businesses and stands in the way
rules across borders easier. These changes are key to
of innovation and economic growth. Knowing the
improving road safety and achieving the EU’s ‘Vision
importance of stopping online piracy, especially
Zero’ goal – no road deaths by 2050.
during live events such as sports and concerts, the
Commission recommended measures in May 2023. It The rapid expansion of the commercial drone market
encourages Member States to take steps to deal with in the EU has sparked a wave of new regulations on
illegal broadcasts, thereby supporting the EU’s sports the safety and efficacy of drones. New EU rules
and creative industries. began to apply in 2023, establishing a dedicated
airspace for drones, known as U-space, to make
drone traffic safe and allow operators to offer a wider
range of services. From package delivery to
emergency assistance, and from search and rescue
missions to infrastructure monitoring, the vision of
the European Drone Strategy 2.0 will steadily come
to fruition.

Work on the Wörth–Germersheim–Speyer line in Germany as part

of the Fast-Track Programme to help digitalise the rail network,
21 July 2023.
 87

Digitalisation for citizens

GENERAL REPORT
Cybersecurity and resilience Data protection
The new rules to secure a common high level of In today’s interconnected world, data flow globally at
cybersecurity across all Member States, known the touch of a button. Protecting data upholds people’s
as the NIS2 Directive, came into force in January trust. That means all who handle personal data should
2023. Compared to the earlier 2016 cybersecurity play by the same rules. This is underscored by the
measures, the new rules cover more sectors, such Commission’s July proposal for a new regulation on
as telecoms providers, postal services, public the procedural rules of the General Data Protection
administration and healthcare. Companies operating Regulation (GDPR). The proposed regulation aims to
in these sectors now have stricter risk management strengthen GDPR enforcement in cases that affect
and incident-reporting duties. people located in more than one Member State.
Its intention is clear: the faster resolution of cases,
On 30 November, the Parliament and the Council
meaning faster remedies for people and more legal
agreed on the Cyber Resilience Act, intended to
certainty for businesses.
enhance rules for more secure hardware and
software products. This is the first law of its kind in Thanks to rising global standards for data protection,
the world. It will raise the level of cybersecurity for international cooperation has flourished. Notable
all digital products in the EU, helping consumers and outcomes include the release of the EU–Association
businesses. The law will apply to everything from of South-East Asian Nations guide on data transfer
baby monitors to routers, with security rules varying clauses in May, the EU–US Data Privacy Framework
based on the product’s risk level. agreed upon by the Commission in July and the
successful review of the data agreement with Japan.
In April, the Commission also proposed the EU Cyber
Solidarity Act, to help countries work together against
online threats.

V I D E O EU cybersecurity: stepping up its efforts to protect citizens,

businesses and infrastructure against cyberattacks, the EU is
funding research to boost its digital defences.

Věra Jourová, Vice-President of the European Commission in

charge of Values and Transparency (second from left), participates
in the conference ‘5 Years of the GDPR: Still a benchmark in the EU
digital landscape?’, Brussels, Belgium, 23 May 2023.
88

The Digital Services Act and the Member States too have been encouraged to act
T H E E U I N 2023

quickly against online terrorist content and hate

Digital Markets Act speech, so as to speed up the enforcement of the
To better protect fundamental rights and curb unfair DSA. The Commission has also signed administrative
practices in the digital space, the EU started applying agreements with several national media regulators,
two new acts in 2023: the Digital Services Act (DSA) which are now leading the way in implementing the
and the Digital Markets Act. DSA. Their role in overseeing media operations and
upholding broadcasting standards goes beyond mere
The DSA makes sure online platforms and search supervision. They ensure that digital platforms are
engines are held accountable for harmful content. It not just passive hosts, but instead active participants
aims to protect children online, provide clarity on how in the moderation and management of online content
algorithms work and ban targeted advertising that that is illegal or presents a systematic societal risk.
profiles people based on categories such as ethnicity,
political views and sexual orientation. The related Digital Markets Act has set out clear
obligations to ensure that the dominant companies
By 17 February, these platforms had to disclose in the digital sector, known as gatekeepers, maintain
their user numbers in the EU. The biggest ones – a level playing field in the digital marketplace. Six
referred to as very large online platforms and search gatekeepers were designated at the beginning of
engines – were given until the end of August to September, and they have until March 2024 to fully
comply with the obligations in the act. Since then, comply.
the EU has been collecting information from major
platforms to check whether they are complying The signatories to the 2022 Code of Practice on
with parts of the DSA, particularly in protecting Disinformation, including all major online platforms,
children and removing harmful content. To support have also launched the new Transparency Centre and
the application of the DSA, the European Centre for published the first baseline reports on how they are
Algorithmic Transparency was established to oversee putting the code’s commitments into practice.
these companies’ algorithms.

V I D E O Thanks to the Digital Services Act, targeted advertising

will be more transparent and more limited. For example,
advertising that is based on sensitive data (such as sexuality,
religion or race) or that targets children will be banned.
 89

A participant in the European Citizens’ Panel on Virtual Worlds

practises a life-saving technique using a virtual reality tool,
Brussels, Belgium, April 2023.

GENERAL REPORT
Virtual worlds February to April 2023, gathering input on virtual
worlds in the EU (see Chapter 9).
According to an EU study, 98 % of professionals
see extended reality as being a major force in their This collective feedback fed into the new Strategy for
industry in the next 5 years. Knowing this, the EU is Web 4.0 and Virtual Worlds, adopted in July, which
keen to understand both the benefits and the risks of aims to create an EU digital landscape that is
such technologies, while always keeping in mind the transparent, safe and welcoming for all – be they
rights of the individual. To get genuine feedback, the people, businesses or public authorities.
Commission hosted a European Citizens’ Panel from

What will virtual worlds make possible?

Health Green transition Industry

Students and professionals can 3D models can simulate the By 2025, industrial virtual worlds
be trained to deal with emergency effects of global warming, leading will reduce vehicle delivery times
situations and carry out surgery to a better understanding of its by 60 % and the carbon footprint
simulations, leading to a lower causes and mitigation measures. of vehicle manufacturing by 50 %.
risk of surgical complications and
Faster set-up times and less
better accuracy of diagnosis.
wasting of energy, materials
and resources will contribute
to the green transition across
the industry.

Art and design Education

From fashion to cultural heritage, and from music to A more experiential learning process can help
visual arts and design, virtual works will offer new students learn faster and understand the world better.
ways to create. They will give users the feeling of
being in a real museum, or at concerts, theatre plays
or immersive ballets.

Cross-border cooperation and travel abroad, but also for companies to do

business in other Member States, and for national
When EU residents move within the EU, their administrations to coordinate social security across
social security rights, including healthcare and borders.
pensions, move with them. On 6 September, the
Commission proposed a digital plan to make Thanks to the EU Digital Identity Wallet, every EU
accessing these benefits across borders quicker and resident could soon have access to a secure mobile
easier. Better data exchanges between Member app that allows them to prove their identity, both
States and streamlined benefit-claim procedures online and offline, and store personal documents such
will make it easier not only for people to live, work as their driving licence, ID and academic certificates.
90

Key initiatives to improve social security through digital transformation

T H E E U I N 2023

Accelerate the implementation

of EESSI
Fully engage in Esspass
The aim is to move away from paper- pilot activities
based to digital exchange between
national social security institutions by The European Social Security
having the Electronic Exchange of Social Pass (Esspass) aims to simplify
Security Information (EESSI) system the cross-border issuance and
operational in all participating European verification of citizens’ social
countries by the end of 2024. security entitlement documents.

Incorporate the EU
Digital Identity Wallet
Take social security
The EU Digital Identity
coordination procedures online
Wallet will be a digital tool
The aim is to make it even easier for for EU citizens to verify
people to move and work abroad, and to their identity online and
ensure rapid access to statutory benefits. access services across the
Member States can build on the Single Member States.
Digital Gateway Regulation, which provides
for certain administrative procedures to be
fully online by 12 December 2023.

In November, the Parliament and the Council reached with national judicial authorities. Court hearings can
a political agreement on the core elements for the now use video calls, and new protocols are in place
legal framework of the EU Digital Identity. As part of for the use of electronic signatures and seals, the
this framework, the wallet will give users full control legal effect of electronic documents and the electronic
over their data via a publicly guaranteed system, payment of court fees in civil proceedings.
rather than one offered by a large private platform.
The future of healthcare is also digital, and the
The EU has also updated its rules on cross-border European Health Data Space, proposed in 2022,
cooperation in legal matters. Previous rules covered could soon play a key role in this transformation. In
judicial cooperation, but not communication via digital December, the Parliament and the Council adopted
means. Now, competent authorities in Member States their positions in support of creating this space,
must connect to a decentralised IT system to exchange which is designed to provide EU residents with
data securely. The system will be interoperable with easier access to and control over their health data,
e-CODEX, which is a communication tool developed even when in another Member State. It will enable
specifically for the judicial sector, managed by healthcare professionals to deliver effective care
the European Union Agency for the Operational based on a complete medical history. Furthermore,
Management of Large-Scale IT Systems in the Area of it is envisaged that it will be a key component in
Freedom, Security and Justice. enabling the secure use of health data for important
research and the development of health policies.
In addition, a European electronic access point is now
available for people and businesses to interact digitally
 91

Using the EU Digital Identity: applying for a bank loan

GENERAL REPORT
Without the EU Digital Identity With the EU Digital Identity

1 1
Arrange a bank appointment The user has all their documents in
their personal digital wallet, from
2 identity card to their income statement.
Meeting at the bank
2
A document is missing They select only the documents
required by the bank for the loan
3 application, and send them simply
Provide all paper documents and securely.

4 3
Bank sends proposal The bank receives the documents
electronically. If a document is
missing, it is just a click away for
5 the user. The application is ready to
Arrange another bank appointment continue.

6
Another meeting at the bank Using the European Digital Identity streamlines
to sign the loan agreement this process and saves more time.

Digital skills
Digital skills are essential for people to be able to
participate in the labour market and in society at
large, and for achieving social inclusion. With 2023
being the European Year of Skills, the EU continued
to support Member States and the education and
training sector in providing high-quality, inclusive and
accessible digital education and training to develop
the digital skills of people living in the EU. During the
year, the EU launched multiple initiatives to close the
skills gap.
Aiming for the Digital Decade policy’s target of
reaching 20 million gender-balanced ICT specialists by
2030, master’s programmes and short-term training
courses in advanced digital skills have been initiated
under the Digital Europe Programme. Since 2023, these
have been accessible through the Digital Skills and
Jobs Platform, which has now grown further with 22
national coalitions for digital skills and jobs.
92

The situation
T H E E U I N 2023

• In the future, 90 % of jobs More than

• one third
of • Only 54 % of people in the
will require digital skills. the EU’s labour force lacks the EU between the ages of 16 and
digital skills required for most 74 can perform basic digital
jobs, across all sectors – from tasks.
business to transport, and even to
agriculture.

More than
• 70 % of • The EU faces a critical shortage
of digital experts, including in
• 9.4 million information
businesses report a lack of staff and communications technology
with adequate digital skills as cybersecurity and data analysis. (ICT) specialists are employed
being an obstacle to investment. These shortages will likely (4.6 % of total EU employment).
increase with the projected Under current conditions, the
decline in the working age number of ICT specialists in the EU
population from 265 million in will be close to 12 million by 2030,
2022 to 258 million falling short of the 2030 target
by 2030. (at least 20 million ICT specialists
employed) by around 8 million.

What is the EU doing about it?

Financial support for the development of digital skills includes:

€29 billion (*)

€2 billion
•

• Recovery and resilience • €580 million

• European Social Fund plans Digital Europe
Plus programmes
•

• (*) This figure shows estimated

expenditure for the original
recovery and resilience plans.
 93

EU initiatives to support digital skills

GENERAL REPORT
1. Deep Tech Talent Initiative (under the New European Innovation Agenda)
In the first year of the initiative, the European Institute of Innovation and Technology made
significant progress towards the goal of qualifying 1 million learners in deep tech by 2025.

• It launched a special call for • It launched the first Deep

proposals and collaborated Tech Talent Training Prize
with other initiatives, including to recognise and reward
Girls Go Circular. organisations that excel in
tackling deep-tech training
challenges.

• It received pledges from

several universities and • It launched its new online
companies to train over platform – the EIT Campus –
650 000 learners. in January 2023, bringing
together over 2 500 courses
in entrepreneurship and skills
development.
Images: © Getty Images.

2. European Digital Skills Certificate

• September 2022 • April 2023 • December 2023

A feasibility study is carried A pilot project is launched with The outcomes of both work
out to gain an insight into the five EU Member States (Spain, streams are presented and
existing certification schemes France, Austria, Romania and discussed at a final event.
for digital skills. Finland) to test building blocks
for a European certificate.

3. European Digital Skills Awards

• The European Digital Skills • In 2023, the awards promoted • Seven winners were selected
Awards encourage the sharing initiatives in five categories: from 330 applicants.
of experiences on how to close youth, women, inclusion,
the digital skills gap. digital upskilling at work and
digital skills for education.

4. Cyber Skills Academy

In recent years, cyber threats in the EU have increased dramatically. The academy will strengthen the EU’s
cybersecurity capabilities and increase the number of skilled cybersecurity professionals.
94

Space
T H E E U I N 2023

Space technology plays an essential role in the In 2023, new services were deployed to enhance the
daily lives of people in the EU, for example when resilience and competitiveness of the EU’s Copernicus
they use mobile phones or car navigation systems, and Galileo satellite constellations. For example, the
watch satellite television or withdraw money from upgraded Galileo satellite system now provides even
a cash machine. Satellites also provide important more accurate location tracking, down to 20 cm.
data during disasters, improving emergency response
coordination.

To support current data needs and

foster innovation, the Commission
has introduced the Dynamic
Purchasing System for Copernicus –
a new way of doing space
procurement in Europe. This makes it
easier for small and medium-sized
enterprises and start-ups to
participate in the space data market.

V I D E O Copernicus Data Space Ecosystem,

a new distribution platform that opens doors
to all the data and infrastructure needed for
Earth-observation applications.

In March, the EU adopted IRIS² (Infrastructure Demonstration and Validation programme is proof
for Resilience, Interconnectivity and Security by of this commitment. As the name suggests, it allows
Satellite), its third major satellite constellation. With space companies to trial new space technologies
a €2.4 billion contribution from the EU budget, the directly in orbit. This, for example, provides European
programme is designed to ensure secure government research centres with invaluable insights and helps
communications, support military and defence bring forward satellite launches for companies.
operations and expand commercial broadband
Recognising the need to attract more investment, at
services, especially in remote areas.
the beginning of 2023 the Commission also launched
For Europe to remain at the forefront of space Helios, the first-ever space stock index. This tool gives
technology, investment in research and innovation a clear picture of how European space companies are
is equally important, especially through EU funding doing financially. It helps them attract more attention
programmes such as Horizon Europe. The In-Orbit and makes it easier for people to invest in them.
 95

As Europe’s space infrastructure expands, protective In 2023, the European Space Policy placed significant

GENERAL REPORT
measures become increasingly important. The emphasis on security in space. In that respect,
European Union Agency for the Space Programme, in the Commission and the High Representative of
cooperation with 15 Member States, champions this the Union for Foreign Affairs and Security Policy,
cause through the EU Space Surveillance and Tracking Josep Borrell, presented a joint communication
Partnership. This partnership, equipped with a complex on a European Space Strategy for Security and
system of space surveillance and tracking sensors, Defence. This introduces measures for a common
serves over 190 registered organisations, protecting understanding of space threats and sets the stage
more than 400 satellites from the risk of collision with for a legislative proposal for an EU space law in 2024
space debris and other operational satellites. (see Chapter 8).
Space technology is crucial for environmental
protection, and the EU’s Destination Earth project
is a prime example of this intersection. It aims to
create a comprehensive digital model of the Earth for
better weather and disaster prediction. Confirmed in
December, the project’s second phase will enhance
the existing digital models, improve data handling
and incorporate advanced AI technology.

EU Space Surveillance and Tracking

2023 facts and figures

By the end of 2023, more than 15 600 close approaches

had been detected across three different orbits.

1 000
collision-avoidance high-interest events

127
re-entry analysis events

434
satellites monitored 6
fragmentation analysis events

196
organisations registered, ± 445 000
from 24 Member States measurements per day
96
T H E E U I N 2023

© Getty Images
6. Building
a fair and social
Europe
Transport workers campaigning for a just transition in the road
transport industry during COP28, Dubai, United Arab Emirates,
9 December 2023.

Introduction
The EU’s efforts to ensure that the economic developing skills and attracting talent to boost the
recovery from the pandemic and the green EU’s competitiveness. The EU also stepped up its
and digital transitions are socially just and fair groundbreaking work on ensuring gender equality,
intensified further in 2023. With hundreds of including by adopting measures to ensure equal
events and activities throughout the year, the pay for equal work and acceding to the Istanbul
European Year of Skills provided strong impetus Convention on Preventing and Combating Violence
for greater participation in lifelong learning and for against Women and Domestic Violence.
 97

A fair economy for the green

GENERAL REPORT
and digital transitions
With its core principles of equal opportunities and 2023 marked the second anniversary of the action
access to the labour market, fair working conditions, plan to turn the pillar into reality. Almost all of its 75
and social protection and inclusion, the European measures have now been implemented or presented.
Pillar of Social Rights acts as the EU’s guide to A review of the action plan is set for 2025.
making Europe’s societies fairer and more resilient.
The 2023 ‘Joint Employment Report’ was the first to
It aims to ensure that everyone has equal chances
provide an update on progress towards the EU and
in life and can benefit from the same social rights.
national employment, skills and social-protection
These range from good education and training
targets set for 2030. While the EU is well on track
throughout life, fair wages and benefits, and safe
towards its headline employment target of 78 % by
and healthy working conditions to childcare, pensions
2030, significant progress is still needed to reach the
and affordable, good-quality healthcare.
targets on adult learning and poverty reduction.

At least At least The number

78 % 60 %
• •
•

of people at risk
of poverty or social
of the population of all adults should exclusion should
aged 20 to 64 participate in decrease by at least

15 million
should be in training every
employment year by 2030
by 2030 by 2030

Strengthening social dialogue and the social economy

Negotiations between organisations representing To support the Member States in strengthening social
employers and workers through social dialogue help dialogue, the EU adopted a recommendation with
improve living and working conditions, and also play concrete measures for the greater involvement of
an important role in adapting to changing economic social partners – for example, promoting collective
and social circumstances. However, the degree of bargaining and consulting them when designing
involvement of social partners varies considerably and implementing economic, employment and
among EU Member States, while newer forms of social policies. Social partners were also consulted
employment and certain groups, such as young on action to strengthen the rights of European
people, are less likely to be represented. Works Councils, which are an important tool for
involving workers in decisions that may affect
their employment or working conditions made by
companies operating in several Member States.
98
T H E E U I N 2023

The social economy in numbers

The social economy prioritises people and social

2.8
The social
and environmental causes over profit. Social- More than •

13
economy
•

economy organisations span a diverse range of •

accounts for
million
sectors, from social and care services to housing,
recreation and affordable energy. They include
cooperatives, mutuals, non-profit associations,
million
paid jobs
social-economy
entities in
6.3 %
of EU employment
the EU
foundations and social enterprises.

Social economy organisations play a crucial role information on EU funding, training opportunities
in tackling societal challenges and promote fair and what is happening on the ground in the Member
working conditions by involving employees in States.
decision-making and governance. They also create
Today, non-profit associations engaging in activities
opportunities for under-represented groups, such
in another Member State face different rules across
as women and young people, and contribute to
the EU, resulting in administrative burdens and
making the green and digital transitions fair and
costs. To remove these obstacles, the European
inclusive. To support the further development of
Commission has proposed a new national form of
this important sector, the EU approved measures in
non-profit association specifically designed for cross-
November to create an environment that enables
border activities, which will allow them to enjoy their
social economy organisations to thrive and grow. A
Single Market freedoms.
new one-stop shop for the social economy provides

The Just Transition Fund and the European

Globalisation Adjustment Fund are key to
ensuring that no one is left behind. In addition,
the newly created Social Climate Fund will
support vulnerable EU households, micro
businesses and transport users facing energy and
transport poverty. Around €65 billion of the fund’s
€86.7 billion budget will come from revenue
generated by the new EU Emissions Trading
© Adobe Stock

System covering the building and transport

sectors. It will operate from 2026 until 2032.
(See also Chapter 4.)
 99

© Adobe Stock

GENERAL REPORT
Boosting competitiveness and skills
While the green and digital transitions are opening The urgency for such an initiative was highlighted by
up new opportunities for people and the European the results of a survey carried out in spring among
economy, many EU companies are reporting small and medium-sized enterprises, which revealed
difficulties in finding workers with the skills they results that could limit the EU’s capacity to achieve
need. To deliver the necessary reskilling and its goals.
upskilling of the European workforce and attract
people with the right skills to the EU, 2023 was
designated the European Year of Skills.

Skills shortages are holding Skills shortages by job role

SMEs back in relation to:
Percentage of SMEs facing skills
shortages in relation to:

general business activities machine operators, craft workers and skilled-trades workers

63 % 69 %
adopting/using digital technologies manual labourers
45 % 59 %
greening business activities professionals, associate professionals and technicians

39 % 58 %
managers

39 %
administrative, clerical and service workers

34 %

Initiatives such as the Pact for Skills are already Modelled on the European Battery Academy,
tackling challenges and shortages in skills launched in 2022, the Commission is proposing
development, and will make an important Net-Zero Industry Academies to equip workers
contribution to the Year of Skills. So far, more than with the necessary skills for the green transition.
2 million people have benefited from upskilling The academies, each focusing on one net-zero
and reskilling activities, and more than 1 500 technology, will bring together industry, social
organisations have signed up to the Pact for Skills partners, and education and training providers.
Charter, including 20 large-scale partnerships. Pact
members have also developed or updated more than
15 000 training programmes and invested close to
€160 million in skills initiatives.
10 0
T H E E U I N 2023

V I D E O The European Year of Skills.

The European Year of Skills

The European Year of Skills aims to get everyone
to recognise the importance of training and to
become active.
The EU is working with Member States, social
partners, employment services, chambers of
commerce and industry, education and training
providers, workers and companies to step up and
advance skills development on the ground.

The flagship Making Skills Count event brought

together around 300 people in Brussels and more
than 1 000 online. The European Vocational Skills
Week from 23 to 27 October highlighted the
importance of vocational education and training in
responding to economic, climate and social
challenges. By the end of the year, more than
900 events had been organised at the national
and local levels.

As one of the flagship initiatives of the European Framework for Traineeships. The framework aims
Year of Skills, the New European Bauhaus initiative to improve the quality of traineeships, particularly
launched the NEB Academy on skills for sustainable in terms of learning and training content and
construction. It will accelerate upskilling and reskilling working conditions, in order to ease the transition
in the construction ecosystem to support the from education, unemployment or inactivity and
transition towards a regenerative bioeconomy. This allow people to enhance their skills and gain work
is where renewable biological resources from the experience.
land and sea (e.g. crops, forests and fish) are used
The EU-wide Innovation Talent Platform, launched
to produce food, materials and energy. Identifying
in March, will help businesses, including start-ups,
knowledge gaps in the use of bio-based materials
find the talent they need beyond the EU. This will
and digital technologies will be among the first
increase the mobility of skilled individuals towards
areas of the academy’s focus, along with increased
and within Europe through international recruitment
circularity in construction.
and by supporting matchmaking between EU-
As an important contribution to the Year of Skills, the based employers and qualified nationals of non-EU
Commission consulted social partners on an initiative countries who want to move legally to and work in
to update and strengthen the European Quality the EU.
 101

Nicolas Schmit, European Commissioner

GENERAL REPORT
for Jobs and Social Rights (foreground,
second from right), visiting the
Professional Training Centre of
Santarém and Professional Training
Centre for the Metallurgical and Metal-
Mechanical Industry, Lisbon, Portugal,
17 February 2023.

In the coming years, the EU’s population will continue low proportion of people with a post-secondary
to decline. If left unaddressed, demographic change education, and those hit by the departure of young
will further exacerbate labour shortages and increase people. The Talent Booster Mechanism was launched
pressure on public budgets, as confirmed in the 2023 in January 2023 as part of the EU’s strategy for
demography report. Following a call by leaders at the harnessing talent in its regions. It will support EU
European Council in June, the Commission presented regions affected by the accelerated decline of
a toolbox of measures to help Member States their working-age population in training, retaining
manage demographic change. It aims to empower all and attracting the people, skills and competences
generations to realise their personal aspirations and needed to address the impact of the demographic
full potential in the economy and society at large. transition. The Harnessing Talent Platform was
officially launched in November, bringing together
Nurturing talent is particularly important in regions
policymakers from regions and Member States with
suffering from a shrinking labour force and a
those at the EU level.

A toolbox of measures to manage

demographic change

Parents Youth Older Migration

Facilitating the Enabling young people Attracting and
reconciliation people to realise integrating talent
of work and their potential Supporting from outside of
private life and in a high- healthy and the EU.
the realisation of quality learning active ageing
family plans. environment and enabling
and facilitate people to stay in
the transition to control of their
working life. lives and still
contribute to the
economy and
society.

Promoting economic prosperity and well-being in all regions with place-based policies.
10 2

The implementation of the long-term vision for initiatives is a proposal to establish an EU Talent Pool.
the EU’s rural areas is in full swing. Over 2 000 This will be the first EU-wide job-matching platform,
T H E E U I N 2023

organisations and authorities at the EU, national, aiming to facilitate international recruitment for
regional and local levels are now collaborating to forge occupations with shortages, at all skill levels. A set
stronger cooperation across different policy areas and of recommendations accompanying the initiative will
boost the sustainability and vitality of rural areas. simplify and speed up the recognition of skills and
2023 saw the creation of the Rural Pact Coordination qualifications acquired outside the EU. By providing
Group and the launch of the Rural Pact Community clear and transparent online information and guidance
Platform, with resources for rural communities facing on immigration and recognition procedures, the EU
population loss, ageing and demographic decline. The Talent Pool will support employers and jobseekers in
EU also provided political guidance aimed at further navigating the complex recruitment rules. It will make
strengthening the prosperity, resilience and social international recruitment easier, faster and more
fabric of rural areas and rural communities. effective for all concerned. The EU Talent Pool will also
help implement Talent Partnerships by providing a tool
In November, the Commission presented measures to
for effective job placements for participating non-EU
make the EU more attractive to talent from outside,
nationals.
and to make mobility within it easier. One of the core

Support for workers

Improving conditions for platform workers
The European Parliament and the Council advanced to. The directive also establishes new rules governing
in their negotiations on the proposed directive on the use of automated systems in monitoring and
improving the working conditions in platform work. decision-making on digital labour platforms. This
The proposal aims to ensure that people working promotes greater transparency and accountability
through digital labour platforms are granted the in algorithmic management, empowering people to
legal employment status that corresponds to their be aware of and challenge decisions affecting their
actual work arrangements, and that they can enjoy working conditions.
the labour rights and social benefits they are entitled

How many platform workers are there?

Platform workers make up

a substantial part of the
labour force in the EU.

2022

28.3 million +52 % 2025

digital platform
This figure
is expected to
43 million
workers grow rapidly.

Similar to the number of people

employed in manufacturing
(29 million).
 103

Peer learning for public Health and safety at work

GENERAL REPORT
administrations In November, the Parliament and the Council
In 2023, some 100 civil servants from 17 Member provisionally agreed to lower the exposure limits
States took part in a new exchange project to for lead to a fifth of the current limit value. Lead
prepare the next generation of policymakers in can affect sexual function and fertility, and can
the EU. The Public Administration Cooperation and harm the development of a foetus or the offspring
Exchange programme enables participants to learn of women exposed to it. They also supported the
from the working methods and cultures of other introduction of the first-ever exposure limit for
EU public administrations. It is financed under the chemicals called diisocyanates, which can cause
Technical Support Instrument, the EU programme respiratory diseases such as asthma. These changes,
that provides tailor-made technical expertise to following a Commission proposal based on the latest
Member States to help them design and implement scientific evidence, will be key in protecting workers
reforms. in the transition to climate neutrality. Both lead and
diisocyanates are likely to be used, for example, in
the production of batteries, in processes to make
Digital skills for health electric vehicles lighter, in wind turbines or as
insulating materials during building renovations.
professionals
The EU amended legislation to significantly lower
During the year, Estonia, Spain, Italy and Romania the occupational exposure limit for asbestos. This
benefited from projects funded by the Technical marks an important step towards better protection
Support Instrument to strengthen the digital of workers from asbestos, a highly dangerous,
competences of their healthcare professionals and cancer-causing substance that is still present in
ensure constant upskilling in the future. The projects many buildings. It is part of the EU’s comprehensive
support health authorities at the national and approach to better protecting people and the
regional levels in developing digital skills plans and environment from asbestos and ensuring an
operational guidelines to facilitate the adoption and asbestos-free future.
use of electronic health records.

Making life easier with digital

social security coordination
Practical steps were proposed to further digitalise
the coordination of social security systems in Europe.
Making full use of digital tools will improve the
exchange of information between national social
security institutions and speed up the recognition
and granting of eligible benefits across borders. This
will make it easier for EU residents to live, work and
travel abroad, for companies to do business in other
© Adobe Stock Member States and for national administrations
to coordinate social security across borders (see
Chapter 5).
10 4

Education, training and lifelong learning

T H E E U I N 2023

Erasmus+
With almost 14 million participants to date, Erasmus+
is one of the most emblematic EU programmes,
What was the profile of the average
covering education, training, youth and sport. The Erasmus+ higher education student
Commission increased the 2023 budget for the in 2023?
programme to a total of €4.43 billion – its highest-
ever annual financial allocation. This helped reinforce
the Erasmus+ priorities on inclusion, active citizenship
and democratic participation, and on the green Men Women
39% 61%
and digital transitions in the EU and internationally.
• •

The revised work programme included €100 million

to support learners and educational staff affected
by Russia’s war of aggression against Ukraine.
The international dimension of Erasmus+ was
strengthened, with a budget increase of €31 million
Time abroad Grant
to reinforce mobility projects and capacity building
5.18 per month
• •

in higher education in support of international •

months €374
cooperation projects. In 2023, this also supported
•

the creation of an open-education digital environment Age

22.5
•

for students enrolled in Ukrainian higher education

institutions, for those fleeing from Ukraine or for
•

internally displaced students.

The European Education Area

The European Education Area is an initiative to help
Member States work together to build more-inclusive
and more-resilient education and training systems. It
aims to improve access to quality education and
training, enable learners to move easily between
education systems in different countries and help
create a culture of lifelong learning. At the midterm
point in building the European Education Area, the
Council acknowledged the progress made and the
need for continued efforts by Member States, the
Commission and a wider stakeholder community to
make it a reality by 2025.

Iliana Ivanova, European Commissioner for

Innovation, Research, Culture, Education and
Youth (right), during the European Education
Area midterm review event, Brussels, Belgium,
10 October 2023. The high-level event reflected
on progress towards achieving the European
Education Area and the challenges ahead.
 105

A dedicated Citizens’ Panel on Learning Mobility More-inclusive education systems

GENERAL REPORT
(see also Chapter 9) generated 21 specific
recommendations aimed at improving learning Thanks to the Technical Support Instrument, Spain,
opportunities abroad for everyone in the EU. These Italy and Portugal are making their education
were taken into account in the drafting of the systems more inclusive for disadvantaged pupils
Commission’s proposal for a Council recommendation through a multi-country project aimed at combating
inviting Member States to make learning mobility regional disparities. Funding under the instrument
within the EU an integral part of all education and is also helping Ireland and Finland to develop
training pathways. roadmaps for upskilling teachers and promote quality
and inclusive education, and supporting Romania in
setting up and implementing a system to reduce the
Digital education number of early school leavers.
Digital skills are essential for people to participate in
society and work, and for achieving social inclusion.
The EU aims to improve the way people learn online
and ensure that everyone has the digital skills they
need, today and for the future.
With this in mind, in November the EU adopted two
recommendations that aim to guide and support
Member States in developing the people’s digital
skills and addressing the digital divide. The
recommendations are part of the implementation
of the 2021–2027 Digital Education Action Plan.
In parallel, work on the 13 actions under the plan
continues. For example, in June, a community of
practice was launched to support the European
Exchange Platform for higher education content and
educational data, as part of the Digital Education V I D E O Young Inventors Prize: accessible
Hub. The Commission has also started a pilot project programming for visually impaired children.
to explore the development of a European Digital
Skills Certificate, which would help people have their
digital skills quickly and easily recognised across
borders by employers and training providers. (For
more information on digital skills, see Chapter 5.)

Promoting books and reading

The first-ever Day of European Authors – a new
initiative under the Creative Europe programme –
was launched in March. Featuring over 1 000
events, it aimed to reconnect the younger
generation with book reading and encourage
people to discover the cultural and linguistic
diversity of European literature.
10 6

V I D E O EU Mission on Cancer – Addressing the needs

of Young Cancer Survivors.

Supporting research
T H E E U I N 2023

Taking research and innovation as their starting The Marie Skłodowska-Curie Actions are the EU’s
point, five EU missions, supported primarily flagship funding programme for doctoral education
by Horizon Europe funding, are helping the and the postdoctoral training of researchers.
Commission’s work on the European Green Deal, Throughout 2023, the programme supported almost
on making Europe fit for the digital age and on 3 000 projects and 4 400 organisations, which were
Europe’s Beating Cancer Plan. Each mission sets selected for funding in 2021 and 2022. The funding,
out ambitious, practical and measurable targets to amounting to over €1.6 billion, will train more than
deliver tangible outcomes for everyone in the EU. 15 000 doctoral candidates within and outside
A progress assessment shows that the missions are academia.
on track to meet their ambitious goals by 2030.
To create a real and lasting impact, the missions
mobilise a wide range of public and private
actors – from Member States and regional and local
authorities to research institutes, farmers, investors
and associated partners from outside the EU. They
also engage with citizens to boost the uptake of new
solutions and approaches. In 2023, the preparatory
phase was launched for a sixth mission on the New
European Bauhaus. With a focus on innovation, this
will aim to transform neighbourhoods across Europe
for the better, making them beautiful, sustainable
and inclusive by 2035.
As part of the Horizon Europe programme, the
European Research Council helps to push the Mariya Gabriel, then European Commissioner for Innovation,
boundaries of knowledge across all fields of science Research, Culture, Education and Youth, during an event on
and scholarship through its prestigious grant repowering the EU with Hydrogen Valleys, Brussels, Belgium,
1 March 2023. The Commission, together with the European
schemes. Grants from the council worth a total of
hydrogen industry, the scientific community and EU regions, is
€2 billion were awarded in 2023 to projects that committed to accelerating joint action on research into and the
were selected based on their scientific excellence. development, demonstration and deployment of Hydrogen Valleys.

Two EU-funded researchers were named as

winners of the 2023 Nobel Prize in Physics.
Ferenc Krausz and Anne L’Huillier have received
grants worth almost €9.5 million from the
© Kennet Ruona/Lund University

European Research Council. They have also

received support from other EU research
programmes, including the Marie Skłodowska-
Curie Actions. They won the prize, together with
© Peter Seidel

fellow physicist Pierre Agostini, ‘for experimental

methods that generate attosecond pulses of light
for the study of electron dynamics in matter’.

Ferenc Krausz (left) and Anne L’Huillier (right).

 107

In July, the Commission proposed a Council The first winners of a new prize recognising academic

GENERAL REPORT
recommendation to establish a new European and research organisations for driving the change
framework for research careers, a new charter for towards gender equality in research and innovation
researchers and a European competence framework were announced on International Women’s Day
for researchers. The main goal of these initiatives is (8 March). Three academic institutions from Ireland
to retain researchers in Europe, make it an attractive and one from Sweden took home the EU Award for
destination for researchers from outside and Gender Equality Champions.
promote research careers as an attractive option for
young students and graduates.

Stepping up measures for a Union of Equality

Gender equality
Even though the right to equal pay for equal work or ensure that victims of pay discrimination can be
work of equal value is one of the founding principles represented in court by relevant associations and
of the EU, women in the EU earn on average around bodies, such as equality bodies. It ensures better
13 % less than men. While the gender pay gap is a compensation for victims and stronger penalties for
complex issue, pay discrimination is considered a key the infringement of rights. The new rules must be
contributory factor. New rules on pay transparency incorporated into national law by 7 June 2026.
aim to strengthen the application of the principle and
The Commission continued its support for action
help close the gender pay gap. The Pay Transparency
to prevent and combat gender-based violence and
Directive gives workers the right to information
violence against children through its Citizenship,
on average pay levels for all those performing the
Equality, Rights and Values programme. Thirteen
same job or work of equal value, enabling workers to
projects were selected to receive funding of almost
identify and challenge any pay discrimination based
€30 million. Seven of the selected proposals focus
on sex.
on gender-based violence and domestic violence, five
The directive also gives workers the possibility to target violence against children and one covers both
enforce their right to equal pay if they believe they adults and children.
are being discriminated against. For example, it will

The EU’s accession to the Istanbul Convention

on Preventing and Combating Violence against
Women and Domestic Violence in June was
an important milestone. It demonstrates the
EU’s commitment to stepping up action against
gender-based violence across the 27 Member
States, and action in support of all victims of
violence against women and domestic violence.
The convention entered into force in the EU on
1 October 2023.

From left to right: Vĕra Jourová, Vice-President of the European Commission in charge of Values and Transparency,
Paulina Brandberg, Swedish Minister for Gender Equality and Deputy Minister for Employment, and Helena Dalli,
European Commissioner for Equality, on behalf of the Presidency of the Council of the European Union, participate
in the event marking the EU’s accession to the Istanbul Convention, Brussels, Belgium, 19 June 2023.
10 8
T H E E U I N 2023

Gender stereotypes are a root cause of gender

inequalities. The ‘#EndGenderStereotypes’
campaign, launched in March, targets gender
stereotypes that affect both men and women
across all aspects of life, including work–life
balance, career choices and opportunities for
leadership positions. It aims to raise awareness
about stereotypes in real-life situations and
encourage people to question and address
discriminatory practices.

V I D E O Challenging gender
stereotypes.

Implementing the 2020–2025 LGBTIQ Equality Strategy

The 2023 Progress report on the implementation of promote LGBTIQ equality, with €3 million allocated to
the LGBTIQ Equality Strategy 2020–2025 presents projects specifically benefiting the LGBTIQ community
numerous lesbian, gay, bisexual, trans, intersex and in 2023–2024.
queer (LGBTIQ)-related measures and shows that the
The ‘Keep Your Eyes Open’ campaign was launched
majority of actions under the strategy have either
by the Commission in 2023 as an initiative under
been delivered or are being implemented. The report
the 2020–2025 EU Strategy on Victims’ Rights to
will inform discussions on what remains to be done
raise awareness about the rights of victims of crime,
for the successful implementation of the LGBTIQ
including victims of anti-LGBTIQ hate crime. The
Equality Strategy by 2025.
campaign aims to encourage the friends and families
The Commission increased its funding under the of victims to offer help and support. The end goal
Citizenship, Equality, Rights and Values programme is to ensure that the victims understand their rights
to combat discrimination against LGBTIQ people and and feel empowered to use them to seek justice.

Thousands unite against discrimination

© AFP

at the annual Kraków Equality March,

Poland, 20 May 2023.
 109

Promoting inclusion and diversity

GENERAL REPORT
Winners of the 2023 European Capitals of Inclusion and Diversity Awards
The annual European Capitals of Inclusion and Diversity Awards are part of the EU’s work on
combating racism and discrimination. The 2023 winners, spread across seven Member States, were
celebrated for their work on building fairer societies by promoting diversity and inclusion in terms of
gender, sexual orientation, racial and ethnic origin, religion and belief, ability and age.

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11 0

How well does your employer/organisation manage diversity?

T H E E U I N 2023

The EU Diversity Self-Assessment Tool, published in May during European Diversity Month,
allows employers in the public and private sectors and organisations both big and small to
see how well they manage diversity across six categories.

• Organisational • Recruitment •Career • Terms and • Recognition • Organisational

diversity progression conditions of specific profile
infrastructure needs

Roma people are Europe’s largest ethnic minority. In late 2023, there was a marked increase in hate
Many Roma continue to experience discrimination and speech and hate crime in Europe, particularly towards
social exclusion. In January, the Commission issued Jewish and Muslim communities. In December, the
a stocktaking report of national Roma strategies, Commission published a communication titled ‘No
assessed them against the commitments made by place for hate: A Europe united against hatred’, which
the Member States and provided guidance on areas brought together EU measures on the subject. This
that require improvement or more-significant effort. drew on key existing work strands, including the EU
The Commission called on Member States to make Strategy on Combating Antisemitism and Fostering
the best use of EU funding instruments and to review Jewish Life, and served as a call to action to all
their national frameworks to make them follow the Europeans to stand up against hatred and speak up
Council Recommendation on Roma equality, inclusion for tolerance and respect (see also Chapter 7).
and participation more closely.

2021–2030 Strategy for the Rights of Persons with Disabilities

A Union of equality can only be achieved when
persons with disabilities enjoy their rights and can
participate fully in society and the economy, like
everyone else.

To ensure that persons with disabilities can enjoy

equal access to benefits from discounts and other
advantages across the EU, and can move freely
between Member States, the Commission has
proposed:
• a new European Disability Card; and
• an improved European parking card for persons
with disabilities.
 111

The proposed European Disability Card aims to serve to ensure accessibility. As a result, more than 2 500

GENERAL REPORT
as recognised proof of disability across all Member persons with disabilities contributed to the initiative.
States. It will grant cardholders equal access to the
The proposed new parking card will guarantee the
same special conditions and preferential treatment
same rights to use parking spaces and facilities
(e.g. free entry, reduced tariffs and priority access)
reserved for persons with disabilities as residents in
granted to residents of the Member State they are
the Member State concerned. It is intended to replace
visiting. This will apply to public transport, cultural
national parking cards.
events, museums, sports centres, etc. The card
will complement existing national disability cards. The initiative is being negotiated by the Parliament
The public consultation on the new card was made and the Council.
available through a number of alternative formats

Consumer protection
In 2023, the Commission, in collaboration with the New rules to protect consumers applying for credit
authorities responsible for enforcing EU consumer (e.g. a loan to pay for a car) came into force in
protection laws (in the Consumer Protection November. They aim to ensure that consumers
Cooperation Network), continued to make significant know exactly what they are signing up for and that
strides in protecting consumers from unfair practices. information is adapted to digital devices.
Addressing the travel sector, the network played a
In addition, modernised rules on financial services
crucial role in ensuring that consumers are treated
contracts concluded at a distance (e.g. online or by
fairly in the event of flight cancellations. In another
post) entered into force in December. The legislation
significant development, Google engaged in a
sets out clear rules concerning the information
dialogue with the network in which it committed
that needs to be provided to consumers before
to giving consumers clearer and more accurate
the conclusion of a contract. It also introduces
information to comply with EU rules.
the possibility for the consumer to withdraw from
Modernised rules will ensure that only safe products a contract through an easy-to-find ‘withdrawal
are offered to EU consumers, regardless of their button’ on the seller’s website. The new rules, which
origin and whether they are sold in traditional shops will apply from the middle of 2026, also provide
or online marketplaces. The new rules, which address consumers with the possibility to contact a person
the challenges of increasing digitalisation, new in cases where a chatbot is not satisfactory.
technological developments and globalised supply
chains, entered into force in June and will apply in all
Member States as of 13 December 2024.
11 2

© Adobe Stock
T H E E U I N 2023

Major travel agencies have committed to:

• better informing consumers of their rights in case of flight cancellations;

• expediting ticket refunds, with a maximum waiting time of 14 days for the consumer
(a maximum of 7 days for airlines to refund travellers or the intermediary used to
book the ticket and 7 days for the intermediary to process the reimbursement);

• offering transparent contact details;

• providing information on the specific benefits linked to their service packages;

• explaining the implications of specific services on consumer rights in the case of flight
disruptions.
 113

GENERAL REPORT
7. Protecting
people and
freedoms
Introduction
In 2023, as COVID-19’s status as a global health partnerships with non-EU countries. 2023 was also
emergency was finally lifted, the final building blocks the year that Croatia became the newest member
of the European health union were laid. In future, of the Schengen area, and began to enjoy the full
all European Union Member States will be better benefits of being part of the largest free-movement
prepared to tackle a public health crisis together area in the world. The Council of the European Union
and better able to protect both the physical and the also took the landmark decision to welcome Bulgaria
mental health of their citizens. The EU strengthened and Romania into the Schengen area, starting with
its response to the common challenge of migration lifting controls at air and sea borders as of the end
in terms of legislation – with the political agreement of March 2024. The EU also took comprehensive
between the European Parliament and the Council steps to protect its citizens from threats both inside
on the Pact on Migration and Asylum, along with and outside its borders.
operational measures – and comprehensive
11 4

Protecting citizens
T H E E U I N 2023

The terrorist attacks in a school in France and on to protect places of worship, with envoys appointed
the streets of Brussels in October 2023 were a stark to maximise the potential of EU policies to combat
reminder of the urgency of continuing to adapt and hatred.
reinforce the EU’s security architecture. A number of
The Commission also urged the Council to
measures were agreed over the course of the year to
extend the current list of EU crimes set out in the
help combat organised crime, terrorism, trafficking in
treaties to include hate speech and hate crime, as
human beings, drug trafficking and corruption.
proposed in 2021, and reiterated the importance of
The Commission also urged the Member States to intensifying the implementation of the 2021–2030
take the necessary steps to ensure full compliance Strategy on Combating Antisemitism and Fostering
with the Regulation addressing the dissemination Jewish Life.
of terrorist content online, which obliges service
People and businesses in the EU rely on critical
providers to remove terrorist content within 1 hour
infrastructure to deliver essential services. In
of receiving a removal order from Member State
an increasingly complex security and geopolitical
authorities. A set of recommendations was published
landscape, the EU is taking action to reduce
in October to coordinate the response of Member
vulnerabilities and increase resilience in this area.
States to the spread and amplification of illegal
The Commission has adopted a list of essential
content, such as terrorist content or unlawful hate
services, linked to critical infrastructure, to be
speech, before it can lead to a serious threat to
assessed by Member States. The Commission has
public security. (See Chapter 5 for more details.)
also proposed a Critical Infrastructure Blueprint to
The EU is committed to stepping up action against strengthen coordination at the EU level to respond
all forms of hatred. Following an alarming increase to significant cross-border incidents.
in hate speech and hate crime, targeting the Jewish
As part of a package of measures adopted on
and Muslim communities in particular, the European
the 30th anniversary of EU citizenship, in December,
Commission, together with the High Representative
the Commission proposed to amend rules to protect
of the Union for Foreign Affairs and Security
and support EU citizens abroad in times of crisis.
Policy, Josep Borrell, launched a call for action
The revised Consular Protection Directive aims
to all Europeans to stand up against hatred and
to ensure better and easier protection for citizens
speak up for tolerance and respect. With the joint
when travelling outside the EU, if their country
communication, the EU is reinforcing action across
of nationality does not have a consulate or embassy
policy areas such as security, digital, education,
where they are.
culture and sport. This includes additional funding

Ylva Johansson, European Commissioner for Home Affairs,

answering journalists’ questions at the Port of Antwerp in the
light of the continued rise in the quantity of cocaine seized at
the port, Belgium, 7 February 2023.
 115

Stepping up the fight against drug trafficking

GENERAL REPORT
Drug trafficking is highly lucrative for criminals, networks engaged in illicit activities is felt throughout
as demonstrated by the unprecedented increase communities – and economies – and demands a
in the amount of illicit drugs available in Europe collective, coordinated response from governments,
and the fact that drugs seizures in the EU law enforcement and private actors in key sectors.
are hitting record levels. The impact of criminal

•The estimated profit of • 50 % of all homicides in Europe • 70 % of all drug seizures in

organised crime from are directly linked to drug the EU take place in ports.
illicit activities, including trafficking.
drug trafficking, is around
€139 billion a year, which is
equivalent to 1 % of the EU’s
gross domestic product.

• 40 % of criminal networks active The European cocaine market

• •There were 6 200 deaths from
in the EU are involved in trading increased by 416 % between drug overdoses in 2021 in the EU.
illegal drugs. 2011 and 2021.

Source: European Union Serious and Organised Crime Threat Assessment, 2021.

To step up EU efforts to fight organised crime and priority areas. The measures build on the ongoing
drug trafficking, the Commission set out a roadmap implementation of the 2021–2025 EU Strategy on
in October with 17 targeted actions under four Organised Crime and the EU Drugs Strategy.

New EU roadmap to fight drug trafficking and organised crime

1 2 3 4

• Increasing the • Dismantling high-risk • Measures to prevent • Working with

resilience of ports criminal networks organised crime international partners,
against drug trafficking by means of through the exchange including in West Africa,
and criminal infiltration. more-coordinated of best practices among Latin America and the
investigations and Member States. Caribbean.
the use of Schengen
Information System
alerts.
11 6

In addition, the EU is strengthening the mandate of proposed new legislation to combat corruption
T H E E U I N 2023

key actors in the fight against drug trafficking, for and launched an EU network against corruption.
example by setting up the new EU Drugs Agency In addition, new rules on access to financial
in 2024. The agency will develop a European drug information, agreed by the European Parliament and
alert system to quickly notify national authorities the Council in June, will provide law enforcement
of new dangerous substances entering the market. authorities with quick access to information on the
The EU has also increased funding for the European accounts where criminals and terrorists keep or hide
Multidisciplinary Platform against Crime Threats, with their funds or assets.
significant results. Furthermore, it continues to invest
In the same month, the EU adopted new rules to
in innovative solutions for law enforcement agencies
make it easier and faster for law enforcement and
to help them keep pace with technological change
judicial authorities to obtain the electronic evidence
and maintain their effectiveness in protecting citizens
they need to investigate and prosecute criminals.
today and in the future.
This means a judicial authority in one Member State
Corruption constitutes a threat to security, as it will be able to obtain electronic evidence from a
enables and drives organised crime, terrorism and service provider (such as a telecom or social media
other forms of crime, including money laundering company) or its legal representative in another.
and drug trafficking. In 2023, the Commission

• 85 % of criminal • A cross-border request to • The average time required to

investigations involve obtain e-evidence is made in obtain electronic evidence was
digital data. over 50 % of all criminal 10 months for mutual
investigations. legal assistance procedures
and 120 days for European
Investigation Orders.

• The new rules (effective as of 2026) will bring the time

required to obtain electronic evidence down to just
10 days, and in cases of emergency to less than 8 hours.

Images: © Adobe Stock.

 117

Advancing towards a new migration policy

GENERAL REPORT
The New Pact on Migration and Asylum is designed In December, the Parliament and the Council reached
to manage and normalise migration over the long an agreement on five key proposals of the pact.
term, providing certainty and decent conditions for Once these proposals are formally adopted, the pact
people arriving in the EU. It also seeks to establish will be in place, creating a legal framework that
a common EU approach to migration and asylum, balances solidarity and responsibility between the
based on solidarity, responsibility and respect for Member States for an effective and fair approach to
human rights. managing migration.

New Pact on Migration and Asylum: key proposals agreed in 2023

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• Asylum Migration • Asylum Procedures • Crisis Regulation

Management Regulation Regulation Aims to ensure that the EU is
Establishes a new solidarity Addresses the common prepared in the future to face
mechanism to balance the procedure Member States situations of crisis, including
current system in which a few have to follow when people the instrumentalisation of
Member States are responsible seek international protection, migrants.
for the vast majority of asylum making asylum, return and
applications, and sets out border procedures quicker and
clear rules on responsibility for more effective.
asylum applications.

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• Eurodac Regulation • Screening Regulation

Puts in place a common database gathering Creates uniform rules concerning the
together more accurate and complete data. identification of non-EU nationals upon their
arrival, thus increasing security within the
Schengen area.
11 8

In parallel, operational measures have been stepped The European Contact Group on Search and Rescue
T H E E U I N 2023

up to support Member States along the main has been relaunched to promote closer coordination
migratory routes to Europe. In 2023, the Commission and best practices, notably among vessel flag states
presented action plans on the Eastern Mediterranean and coastal states. In addition, 19 Member States
and the Western Mediterranean and Atlantic and the four Schengen-associated countries (Iceland,
routes, with practical measures targeting relevant Liechtenstein, Norway and Switzerland) have
countries of origin and transit. These complement committed to implementing a Voluntary Solidarity
the action plans for the Western Balkans and Mechanism designed to support those Member
Central Mediterranean routes, presented in 2022. States most affected by migratory challenges. The EU
Measures undertaken by the EU, Member States and has also continued to monitor the migratory situation
international partners have contributed to managing through the EU Mechanism for Preparedness and
the number of irregular arrivals. Management of Crises Related to Migration, in order
to strengthen the joint response.
For the 2021–2027 period,
the Commission has allocated
€11.5 billion to the Member States
and the Schengen-associated countries
for programmes to tackle challenges
in migration, border management
and security. Following an increase in arrivals from North
Africa on the Italian island of Lampedusa in
September, the EU set out a 10-point plan
involving practical measures to reduce irregular
migration and provide immediate assistance to
the Italian authorities.

Ursula von der Leyen, President of the European Commission (third from left), Giorgia
Meloni, Prime Minister of Italy (foreground, third from right), and Matteo Piantedosi,
Italian Minister for the Interior (foreground, second from right), during their visit to
the migrant hotspot on the island of Lampedusa, Italy, 17 September 2023.
 119

Tackling irregular migration

GENERAL REPORT
Fighting migrant smuggling
The fight against and the prevention of migrant In line with the 2021–2025 EU Action Plan against
smuggling and trafficking in human beings are two of Migrant Smuggling, an Anti-Smuggling Operational
the EU’s priorities, and they are crucial to addressing Partnership was launched with Tunisia, building
irregular migration in a comprehensive way. Migrant- on partnerships concluded in 2022 with Morocco,
smuggling networks know how to exploit legal Niger and the Western Balkans.
loopholes and are using new methods of recruitment,
The use of commercial means of transport, mainly
such as social media and mobile applications.
by air, to facilitate irregular migration to the EU
This development, known as digital smuggling, is
has gradually emerged as a new modus operandi
a new challenge for law enforcement and judicial
of smuggling networks. To address this, in June
authorities. Migrant smuggling and trafficking in
the Commission adopted a toolbox of measures to
human beings are often interlinked: smuggling
support Member States, including through targeted
networks can exploit migrants along the routes or
outreach to transport operators.
smuggle them for the purpose of being exploited
once in Europe. In November, the Commission proposed an update
to the EU’s 20-year-old legislative framework to
Operational task forces supported by the European
counter migrant smuggling. This included a proposal
Union Agency for Law Enforcement Cooperation
laying down minimum rules to prevent and counter
and joint investigation teams under the European
the facilitation of unauthorised entry, transit and
Union Agency for Criminal Justice Cooperation are
stay in the EU, with tougher penalties for smugglers.
reinforcing efforts to tackle migrant-smuggling
New rules would reinforce the role of EU agencies,
networks. An operational task force was created,
in particular the European Union Agency for Law
for example, as part of the follow-up by Italy to
Enforcement Cooperation, and intensify cooperation
the 10-point plan for Lampedusa. The European
with partner countries to tackle the issue globally.
Union Agency for Law Enforcement Training is
The EU also launched a Call to Action for a Global
also contributing to efforts to combat criminal
Alliance to Counter Migrant Smuggling.
organisations.
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• 90 % of irregular migrants • 15 000 smugglers were • There were 331 000

are brought in by smugglers. reported by Europol in 2022. irregular entries at the EU’s
external borders in 2022.
12 0

Emerging challenges The Commission took further steps in building

T H E E U I N 2023

A coordinated visa policy is part of efficient migration the common EU system for managing the
management. The EU has visa-free arrangements return of irregular migrants, including through a
with more than 60 countries, bringing many benefits Recommendation on Mutual Recognition of Return
to citizens on both sides, and also to Member States Decisions and Expediting Returns. The EU’s Return
and partner countries. However, visa-free travel Coordinator, supported by representatives of the
also presents migratory and security challenges. For Member States and the European Border and Coast
example, insufficient alignment with EU visa policy Guard Agency, finalised the operational strategy
can turn a visa-free country into a transit hub for guiding the work of the High-Level Network
irregular entry into the EU. Additionally, investor for Returns and began its implementation. The
citizenship schemes operated by visa-free countries Commission is already working together with
outside the EU pose security risks. Member States on targeted return actions. The
Member States reported an increase of 9 % in
In response, the Commission has proposed a revision return decisions issued to non-EU nationals between
of the current Visa Suspension Mechanism. The January and September 2023, compared to the
proposal introduces new grounds to suspend visa- same period the year before.
free regimes, more flexible thresholds to trigger the
mechanism and provisions to strengthen monitoring
and reporting obligations. Safe and legal pathways
In October, the Commission also presented to Europe
the sixth report to the Parliament under the Labour and skill shortages persist across the EU in a
Visa Suspension Mechanism. The report covers range of sectors and at various skill levels. The EU’s
developments in the visa-free countries in the drive to fill shortages starts at home, by tapping the
Western Balkans and the Eastern Partnership. It also potential of the EU’s domestic workforce. However,
focuses on countries in the Pacific and Caribbean to fully address this challenge and the impacts of
that run investor citizenship schemes. demographic change, the EU also needs to do more
to attract skills and talent from all around the world.
Strengthening border management
The implementation of the skills and talent package
The first-ever European Border Management Strategy
adopted in April 2022 is helping to make the EU’s
was presented in March. It provides a coordinated
labour market more attractive to talent from abroad.
framework for national authorities and for the
The measures included legislative proposals to
more than 120 000 national border authority and
simplify application procedures for and enhance the
European Border and Coast Guard Agency employees
rights of non-EU nationals who want to work in the
who work together to protect the EU’s borders.
EU. Negotiations are progressing well, with a political
The shared vision follows an extensive period of
agreement between the Parliament and the Council
consultation between the institutions. The strategy
reached in December 2023 on the revision of the
also reduces dependency on critical technologies
Single Permit Directive, and an agreement on an
from non-EU countries by exploiting the results of EU
update to the Long-Term Residents Directive expected
research and innovation on border management.
before the end of the current Commission’s mandate.
 121

In November, the Commission presented a talent package also includes measures on recognising the

GENERAL REPORT
mobility package with additional measures on talent qualifications of non-EU nationals and facilitating
attraction. In particular, it proposed the creation of learning mobility. The EU is also developing talent
an EU Talent Pool, the first EU-wide platform for partnerships with key partner countries to establish
matching non-EU citizens wanting to come and work mutually beneficial cooperation on mobility and skills
in the EU with employers in the Member States. The development. (See also Chapter 5.)

The Schengen area

In the first enlargement of the Schengen area in over
a decade, Croatia became the 27th country to join
the border-free travel space on 1 January 2023. In
addition to 23 Member States, Iceland, Liechtenstein,
Norway and Switzerland are also Schengen
members. In December, the Council unanimously
• 80 % of people in the EU think it is
important to improve border security.
decided to welcome Bulgaria and Romania into
the Schengen area, starting with lifting controls at
air and sea borders as of the end of March 2024.
Their accession will boost travel, trade and tourism,
and will further consolidate the Single Market.
Discussions on a further decision to lift controls
at land borders will continue in 2024. An enlarged
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as set out in the ‘State of Schengen Report 2023’.

A renewed Schengen Information System entered • 77 % would like to see accelerated
into operation in 2023. It provides Member States border procedures.
with additional possibilities to support cross-border
cooperation and information exchange within the
Schengen area. After intensive preparations by the
Cypriot authorities to ensure their readiness to
process Schengen Information System data, Cyprus
joined the system in July.
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Today, visa procedures for the Schengen area still
rely heavily on paperwork, leading to higher costs
for both travellers and the participating states. • 68 % are in favour of digital travel
In 2023, the EU adopted new rules allowing for the documents and 72 % agree that the
digitalisation of the procedures, a key deliverable voluntary use of digital travel credentials
under the Schengen Strategy presented by the will accelerate travel procedures.
Commission in June 2021.

Source: Special Eurobarometer 536, September 2023.

12 2

Protecting passengers’ rights

New EU rules for rail passenger protection took effect The Commission also proposed to further strengthen
T H E E U I N 2023

in June. Rail passengers are now better protected existing passenger rights in relation to all modes
if their travel is disrupted, and railway companies of transport. The proposal focuses on improving
must ensure a trouble-free travel experience for the enforcement of passenger rights (both general
passengers with reduced mobility. The obligation for enforcement and individual redress), the rights
rail companies to share real-time traffic and travel of passengers using multiple modes of transport
data also paves the way for more-competitive ticket and reimbursement for air tickets bought via
offers. intermediaries.

Better health
Europe’s Beating Cancer Plan
Europe’s Beating Cancer Plan is the EU’s most
comprehensive ever initiative on tackling cancer, the
number one cause of death among EU residents under
65, with a budget of €4 billion to support action.
Since its launch in 2021, the EU has already
delivered on several of the plan’s flagship initiatives.
From a new Knowledge Centre on Cancer and the V I D E O On World Cancer Day, European Commissioners share
first-ever European Cancer Inequalities Registry to a little piece of their personal lives to raise cancer awareness.
the launch of a European Network of Youth Cancer
Survivors and new measures on early detection, the
In September, the initiative reached its first major
EU is working to change the realities of cancer for
milestone with the launch of the Cancer Image
patients and their families.
Europe platform. This links up 36 datasets of images
In 2023, the EU continued to deliver. The European of nine cancer types (breast, colon, lung, prostate,
Cancer Imaging Initiative, launched in January, rectum, liver, diffuse intrinsic pontine glioma,
aims to facilitate access to and the use of medical neuroblastoma and glioblastoma), bringing together
images and digital technologies (such as artificial more than 200 000 image series involving about
intelligence) to better detect and address cancer. 20 000 individuals.

The European Cancer Imaging Initiative will:

• capitalise on the recent advances • support the piloting and • showcase how medical images
by and successes of artificial development of innovative can be accessed, used and
intelligence systems in helping computer-aided solutions to pooled while ensuring a high
medical professionals detect achieve greater accuracy and level of ethics, trust, security
and diagnose cancers reliability in cancer imaging and personal data protection,
and personalised care, in line in full compliance with EU values
with the objectives of Europe’s and rules
Beating Cancer Plan
 123

The first set of Country Cancer Profiles for the the most common cause of death from cancer, and

GENERAL REPORT
Member States, Iceland and Norway shows that they large inequalities remain in cancer mortality rates
spend a substantial amount on cancer care (nearly both between and within countries.
€170 billion in 2018). Lung cancer remains by far

• Cancer is the second leading • Cancer mortality is almost 50 % more people from
75 % higher among men in
•

cause of death in the EU, lower-income groups than

accounting for 26 % of all the EU. from higher-income groups
deaths. smoke every day.

• Participation in cervical • In 2018, the Member States,

cancer screening varies Iceland and Norway spent
by almost a factor of two nearly €170 billion
depending on the level of on cancer care.
education.

• Due to COVID-19, cancer

screening in most Member
States dropped in 2020
compared to 2019.

Images: © Adobe Stock.

12 4

The Commission has launched a series of dialogues

As many as 78 % of occupational
T H E E U I N 2023

with young cancer survivors to better understand

their needs and challenges, and to develop with them cancers recognised in the Member
initiatives that will help address these points. States are related to asbestos.
Work started in April on developing the first EU-level (See Chapter 6 for EU measures aiming to lower occupational
code of conduct on fair access to financial services exposure to asbestos.)
for cancer survivors. This aims to advance the right
to be forgotten and to address discrimination, so that
people with a history of cancer receive fair treatment
when accessing financial products such as mortgages
or life insurance.

The EU is working towards:

1 a tobacco-free generation;

2 reducing harmful alcohol

consumption;

3 reducing environmental
40 % of cancer pollution;
cases are preventable.
4 reducing exposure to
carcinogenic substances
and radiation;
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knowledge and literacy;

6 promoting healthier
lifestyles.

Margaritis Schinas, Vice-President of

the European Commission in charge of
Promoting our European Way of Life,
during the inauguration ceremony of the
Cyprus Cancer Research Institute’s Nicola
David-Pinedo building, Nicosia, Cyprus,
22 May 2023.
 125

Health security and COVID-19

GENERAL REPORT
After more than 3 years, on 5 May 2023 the World The Commission’s Health Emergency Preparedness
Health Organization announced that COVID-19 no and Response Authority (HERA) plays a crucial role
longer constituted a global health emergency. in ensuring the EU has the medicines and equipment
Determined action and cooperation at the global, EU needed to protect its citizens when emergencies
and Member-State levels, and significant investment strike. The Commission, on behalf of the Member
in science and innovation, enabled the EU to States, secured an agreement with BioNTech-Pfizer
overcome this unprecedented crisis. in May to better adapt vaccine deliveries to Member
States’ needs and ensure the availability of adapted
However, while its status may have changed,
COVID-19 vaccines should new variants emerge.
COVID-19 has not disappeared, and the EU is
A framework contract was also signed with leading
remaining vigilant. The European Centre for Disease
vaccine producers, establishing the EU FAB network
Prevention and Control is monitoring the evolving
to ensure continuous capacity to produce vaccines
situation closely. In autumn, it published an update
in the case of a future public health emergency.
on the increased transmission of COVID-19 in
HERA Invest, launched in 2023, will support research
the EU and the European Economic Area, along
and development for the most pressing cross-border
with guidance on vaccination and communication
health threats. HERA is also working with Member
campaigns for Member States. A new surveillance
States to improve knowledge and skills in health
tool was launched by the centre and the World
preparedness and response, particularly in key areas
Health Organization in October to monitor the
such as stockpiling and procurement.
combined impact of respiratory diseases and
improve the early detection and communication of Efforts continue on strengthening Europe’s pandemic
signs of respiratory virus circulation. preparedness and readiness for EU-wide clinical
trials, in order to provide timely access to novel
In response to the COVID-19 pandemic, the
treatments and vaccines. The EU is a strong
Commission set up the European health union to
supporter of the Pandemic Fund, hosted by the
improve and safeguard the health of everyone in the
World Bank. The fund supports the prevention of,
EU. Based on the lessons learned from the pandemic,
preparedness for and response to pandemics in
the new framework strengthens the EU architecture
low- and middle-income countries, with the EU, its
for the prevention of, preparedness for and response
Member States and financial institutions, acting
to serious cross-border health threats. It also extends
together as Team Europe, being major contributors.
the role of two key EU agencies through the new
mandates for the European Centre for Disease
Prevention and Control and the European Medicines
Agency.

Stella Kyriakides, European Commissioner

for Health and Food Safety (second
from right), during a visit to the Biovac
plant and the mRNA technology
transfer hub in Cape Town, South Africa,
28 January 2023.
12 6
T H E E U I N 2023

The EU Digital COVID Certificate –

a European success story
The pandemic has shown how digital health can
transform healthcare systems and deliver better
healthcare.
The EU Digital COVID Certificate was a crucial
element in the response to the pandemic, making
it easier for people to move safely around the
EU during the crisis. It quickly became the global
standard, with almost 80 countries connected to
the system and more than 2.3 billion certificates
issued. The EU Digital COVID Certificate
Regulation expired on 30 June 2023.
Building on its success, and based on its
technology, on 1 July 2023 the World Health
Organization launched the Global Digital Health
Certification Network. The system will strengthen
the global health architecture and help protect
people across the world from ongoing and future
health threats, including pandemics.

Overhauling the EU’s medicine systems

The proposed reform of the EU’s pharmaceutical system. This means new and better treatments could
legislation – the largest and most far-reaching in become available faster, helping patients get the
20 years – aims to ensure this crucial sector is better care they need sooner.
adapted to 21st century needs.
The reform includes a set of measures to tackle
Presented in April, the reform addresses several the issue of medicine shortages in the long term,
fundamental challenges. For example, medicines are and outside of crisis situations. As part of this goal,
still not reaching patients quickly enough and are in October the Commission presented a set of
not always equally available in Member States. High measures with a particular focus on the most critical
prices for innovative treatments and shortages of medicines, for which security of supply in the EU
medicines are also significant concerns for patients must be ensured at all times. A European Voluntary
and healthcare providers. Solidarity Mechanism for medicines, which enables
Member States to redistribute medicines from their
A central objective of the reform is to create a single
available stocks in the case of critical shortages
market for medicines, ensuring all patients across
elsewhere in the EU, was also launched. A range
the EU have timely and equitable access to safe,
of new rules and incentives for pharmaceutical
effective and affordable medicines. The revision will
companies will be proposed as part of the reform,
also support innovation in medicine development and
along with simplified regulatory procedures and
boost the EU’s competitiveness through a future-
stronger environmental considerations during
proof, crisis-resistant and simplified pharmaceutical
medicine production.
 127

Antimicrobial resistance is considered one of the antimicrobials. A recommendation proposed by

GENERAL REPORT
top-three health threats in the EU. It happens when the Commission, including EU and national targets
bacteria become resistant to the medicines used on the consumption of antimicrobials, was swiftly
to fight infections. The reform includes prudent-use adopted by the Council as part of the EU toolkit on
measures and a new incentive for game-changing antimicrobial resistance.

Antimicrobial resistance

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Current situation Projection for 2050 if no action is taken

2030 target
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– 20 %
12 8

Tackling mental health break the stigma and discrimination surrounding

T H E E U I N 2023

mental health. It is an important first step in putting

The EU has been confronted by unprecedented mental health on an even footing with physical
crises that have significantly affected people’s ability health. The new approach introduces 20 flagship
to cope with growing challenges in fast-changing initiatives and identifies €1.2 billion in funding
contexts. To tackle this, in June the Commission opportunities from various financial programmes to
presented a comprehensive approach to mental support Member States in putting people and their
health, which seeks, among other aims, to help mental health first.
vulnerable groups, especially young people, and to

Measures to tackle mental health issues across policies

• European Code for • Healthier Together initiative for •European depression and
Mental Health non-communicable diseases suicide prevention initiative

• Safer digital spaces for children • Proper application of EU rules •European Agency for Safety
and young people on safety and health at work and Health at Work workplace
campaigns

To mark World Mental Health Day on

10 October 2023, the Commission held a high-
level conference in Brussels. The event brought
together hundreds of people, including
representatives of the EU institutions, national
governments, international organisations and
other interested partners.

Mathilde, Queen of the Belgians, gives a keynote speech at

the World Mental Health Day conference, Brussels, Belgium,
10 October 2023.
 129

GENERAL REPORT
Unleashing the potential of EU funds in the health sector
The Commission’s Technical Support Instrument is helping Belgium, Austria and Slovenia make the
best use of available EU funding programmes to develop their healthcare sectors. Through the
health hub, these Member States can identify the best funding opportunities to support key reforms
for the benefit of citizens. In the long run, this will also help national and regional governments to
underpin economic investment in the health sector. Building on its promising results, this project can
be scaled up to the EU level.

The Global Health Strategy This reaffirms the commitment to the Sustainable
Development Goals (in particular goal number 3
The EU’s leading role in fighting the COVID-19 on good health and well-being) and the European
pandemic has shown that it can make a major Consensus on Development, which sets out common
contribution to global health objectives through a objectives and principles for development.
Team Europe approach. This combines resources
from the EU, its Member States and its financial A joint action coordinated by France was launched in
institutions to deliver a greater impact on the ground. November 2023, involving 22 Member States,
Norway and Ukraine, mapping all global health
In November 2022, the Commission presented a strategies. This will help to coordinate actions and
Global Health Strategy, the external dimension of avoid overlaps.
the European health union and a key component
of its Global Gateway strategy (see Chapter 8).

From left to right: Werner Hoyer, President of the European

Investment Bank, Bill Gates, former Chief Executive
Officer of Microsoft, Ursula von der Leyen, President of
the European Commission, Tedros Adhanom Ghebreyesus,
Director-General of the World Health Organization, and
Catherine Russell, Executive Director of UNICEF, at the
launch of a new partnership to eradicate polio, support
the distribution of other childhood immunisations and
strengthen health systems so they are better able to
respond to emerging health threats, Brussels, Belgium,
11 October 2023.
13 0
T H E E U I N 2023

© WFP 2024
8. Promoting
European interests
and values in
the world
Introduction EU humanitarian aid is supporting the World Food Programme in
reaching 1.3 million people in the Gaza Strip, with emergency food
The European Union is committed to addressing rations distributed to displaced people in shelters and informal
camps. Deir El Balah, Gaza Strip, January 2024.
global challenges, promoting its interests and values
and pushing for democracy, human rights and
multilateralism on the world stage. This commitment with neighbouring regions that aspire to democratic
extends to several important areas, including values and economic development, and on forging
cooperation on security and defence, neighbourhood partnerships that promote shared values and
policy, international partnerships, trade, humanitarian sustainable development.
aid and civil protection.
Through sound disaster preparedness at home and
The EU continued to work closely with global partners abroad, the EU continued to protect lives, prevent
in 2023 to ensure stability in the context of increased disasters and act quickly when crises occurred. These
geopolitical tensions, notably due to Russia’s military ongoing efforts underscore the EU’s unwavering
aggression against Ukraine and the Israel–Hamas commitment to promoting peace, stability and
war. It maintained its focus on important relations resilience on a global scale.
 131

The Middle East crisis

GENERAL REPORT
The brutal and indiscriminate terrorist attacks reiterated the importance of always ensuring the
by Hamas across Israel on 7 October 2023 have protection of all civilians in line with international
led to a drastic deterioration in the humanitarian humanitarian law.
situation of Palestinians in the Gaza Strip and have
Gravely concerned by the deteriorating
increased the risk of escalation in the region.
humanitarian situation in the Gaza Strip, the EU
Emphasising that there is no justification for terror, has called for continued, rapid, safe and unhindered
the EU has condemned Hamas in the strongest humanitarian access, and for aid to reach
possible terms for the terrorist attacks and has those in need through all necessary measures,
called for the release of all hostages without including humanitarian corridors and pauses for
preconditions. While recognising Israel’s right to humanitarian needs.
defend itself under international law, the EU has

EU humanitarian support for Palestinians in 2023

Almost • 33
EU Humanitarian Air
•

€1.1 billion Bridge flights

since 2000

• 1 310 tonnes • €103 million

of essential supplies of humanitarian funding

The EU is the largest humanitarian donor to the The EU has been working constantly with regional
Palestinian people. Overall, since 2000, it has and international partners to prevent the regional
provided more than €1 billion to help meet their escalation of the conflict, including a deterioration
basic needs. Since October, the EU has quadrupled in the situation in the West Bank. It remains
its emergency aid to Palestinians and has been committed to a lasting and sustainable peace
working with a large number of humanitarian based on the two-state solution and the relevant
partners on the ground. resolutions of the UN Security Council.

Water distribution by Action Against Hunger in the Gaza

Strip, providing essential relief to those affected by the
ongoing conflict, Deir Al Balah, 14 November 2023.

© Action Against Hunger

13 2

Security and defence: progress on the

T H E E U I N 2023

Strategic Compass
The EU wants to ensure the security of its residents Cooperation with NATO
and help make the world a more peaceful place. The
Strategic Compass for Security and Defence is a plan (‘partner’, ‘act’)
to strengthen the EU’s security and defence by 2030. Today’s security challenges are inherently
It covers all the aspects of the Security and Defence transnational, demanding that no country tackle them
Policy and is structured around four pillars: partner, alone. A collective and strategic approach is essential.
act, invest and secure. Central to this global strategy is the EU’s long-
standing partnership with NATO, which is a vital
component of its security and defence efforts.

In a powerful political message of transatlantic

unity, the Joint Declaration on EU–NATO
Cooperation emphasised the need for a strong
European defence approach that serves global
security and is compatible with NATO. The
signatories also clearly committed to deepening
this cooperation.
In 2023, EU–NATO cooperation reached an
unprecedented level and recorded tangible results
across all areas, focusing in particular on
resilience. The EU–NATO Task Force on the
Resilience of Critical Infrastructure was launched
in January, and put forward specific
recommendations for further cooperation.

Ursula von der Leyen, President of

the European Commission, signing
the third Joint Declaration on
EU–NATO Cooperation, Brussels,
Belgium, 10 January 2023.

From left to right: Charles Michel, President of the European

Council, Jens Stoltenberg, Secretary General of NATO, Josep
Borrell, High Representative of the Union for Foreign Affairs and
Security Policy and Vice-President of the European Commission
in charge of a Stronger Europe in the World, during a European
summit of the leaders of the EU Member States to discuss
Russia’s war of aggression against Ukraine and EU aid to the
country, Brussels, Belgium, 29 June 2023.
 133

Russia’s war of aggression reaffirmed the shared Building defence

GENERAL REPORT
values of the EU and NATO. Together, they have been
standing in unwavering solidarity with Ukraine, and are capabilities (‘invest’)
coordinating their respective means of support. The 2023 saw the enactment of two key initiatives aimed
European Peace Facility (see Chapter 1) has become an at strengthening EU defence and industry. The Act
integral part of the EU’s support for partners globally. in Support of Ammunition Production, backed by
During the year, the EU also stepped up its cooperation a €500 million budget, aims to increase the EU’s
with other bilateral, regional and multilateral partners, ammunition and missile production. Complementing
including the UN, the Organisation for Security this, the European Defence Industry Reinforcement
and Cooperation in Europe, the African Union, the through Common Procurement Act, with a budget of
Association of South-East Asian Nations and many €300 million, will incentivise EU Member States, for
others. The first Schuman Security and Defence Forum the first time ever, to jointly purchase the most critical
brought together EU and international partners to defence products from the EU defence industry.
address common security challenges.

European Defence Fund

2023 annual budget by category of action

€1.2 billion

Non-thematic calls for innovative and Medical response and chemical, biological,
future-oriented defence solutions radiological and nuclear defence
€72 million €40 million

Information superiority Energy and environment

€99 million €25 million

Sensors Ground combat

€69 million €47 million

Cyber Force protection and mobility

€60 million €45 million

Space Other actions

€125 million €30.3 million

Underwater warfare Materials and components

€90 million €50 million

Air and missile defence Disruptive technologies

€123 million €41 million

Air combat Digital transformation

€63 million €45 million

Naval combat
€154.4 million
13 4

The European Defence Fund is a key supporter of The warming planet is also a growing concern for the
T H E E U I N 2023

defence research and development in the EU. It has EU’s military operations. It is prompting a pivotal shift
provided over €3 billion for 60 collaborative projects in EU defence policy, with climate change now at the
across the Member States since 2021. In 2023 alone, forefront of its security agenda.
the fund allocated €1.2 billion to vital defence areas
In addition, in 2023, the EU adopted its first Space
such as space situational awareness, countering
Strategy for Security and Defence. This strategy
hypersonic missiles and developing a European
focuses on, among other things, protecting the space
patrol corvette. The European Defence Fund supports
assets of the EU and its Member States. Looking
innovation in the defence sector via the EU Defence
ahead, the EU space law is set for introduction
Innovation Scheme, a €2 billion scheme to help
in 2024, with the objective of improving the EU’s
smaller players and innovators in particular.
resilience and strength in space.
Under the military mobility envelope of the
More than 80 % of global trade is transported by
Connecting Europe Facility, €616 million was
sea, and about two thirds of the world’s oil and gas
awarded in 2023 to support the transport of troops
are either extracted at or transported by sea. Almost
and equipment across the Trans-European Transport
all global data, including internet data, flow through
Network. The aim is to support investment in
undersea cables. The EU’s prosperity and security
infrastructure that can be used for both civil and
depend on safe and secure oceans. This is why the
defence purposes.
Commission and the European External Action
Service adopted an updated EU Maritime Security
New security strategies (‘secure’) Strategy and Action Plan in March. On the basis of
these documents, the Council approved the revised
Recent crises and rising tensions have revealed EU Maritime Security Strategy and Action Plan in
weaknesses in the EU’s security. In response, in October. The strategy is aligned with the Strategic
October, the Commission launched a comprehensive Compass and will contribute to achieving its
consultation to inform the future European Defence objectives.
Industrial Strategy.

V I D E O ‘A wake-up
call’: how to protect
the EU’s vital marine
infrastructure from
© Euronews
emerging threats.
 135

EU Maritime Security Strategy

GENERAL REPORT
Main objectives

• Protecting EU interests at •Protecting our natural •Upholding international

sea – citizens, economy, resources and the marine law, particularly the United
infrastructure and borders environment Nations Convention on the
Law of the Sea

• Reacting promptly and effectively to growing • Ensuring relevant training and education to
threats (e.g. cyber and hybrid threats) counter threats (e.g. cyber skills)

Neighbourhood policy and enlargement

negotiations
Western Balkans and Türkiye recommendation and the European Council’s decision
to open accession negotiations with Bosnia and
The EU remains committed to integrating the Herzegovina, once it meets the required membership
Western Balkans into the Union. The 2023 criteria, recognise the country’s progress since it
enlargement package provided a detailed assessment became a candidate in 2022. Montenegro’s and
of the state of play and the progress made by the Serbia’s accession talks with the EU continued,
partners on their respective paths towards the EU. It supported by ongoing dialogues with the Commission
mainly focused on the fundamental reforms required, at the political and technical levels. In April, the
including on the rule of law, public administration, the European Parliament officially approved visa
functioning of democratic institutions and economic liberalisation for Kosovo (this designation is without
criteria. prejudice to positions on status and is in line with
During the year, North Macedonia and Albania made UNSCR 1244/1999 and the ICJ Opinion on the Kosovo
smooth progress in the screening process – a primary declaration of independence), which entered into
step for accession negotiations. The Commission’s force on 1 January 2024.
13 6
On 6 October 2023, Olivér Várhelyi, European
Commissioner for Neighbourhood and
Enlargement, participated in the Berlin Process
Summit in Tirana, Albania.
T H E E U I N 2023

In 2023, the EU continued implementing the countries in tackling energy crises and enhancing
€30 billion Economic and Investment Plan, targeting energy security. Furthermore, the Commission’s new
long-term recovery from the COVID-19 pandemic, Growth Plan for the Western Balkans aims to give the
the green and digital transitions, and regional region some perks of EU membership before countries
cooperation and convergence with the EU. In addition, officially join. It focuses on economic growth and
the EU disbursed €450 million from its €1 billion socioeconomic convergence.
energy support package, supporting Western Balkan

Four-pillar growth plan for the Western Balkans

1. Align with the EU 3. Fast-track

Single Market reforms

Increase
4.

pre-accession funds
Deepen regional
2.

economic integration

At the 2023 Berlin Process Summit, Western At the EU–Western Balkans Summit on 13 December
Balkan leaders reaffirmed their dedication to better in Brussels, Belgium, discussions centred on bringing
integrating their regional economies through the the Western Balkans partners closer to the EU
Common Regional Market, as a step towards EU and advancing their gradual integration; economic
integration. They embraced plans for economic growth, development against the backdrop of Russia’s war
including infrastructure investment and regional of aggression against Ukraine; and strengthening
market expansion. The summit also spotlighted regional security and resilience.
educational advancements, such as the new College of
Presidential and parliamentary elections were held in
Europe campus in Tirana, and environmental initiatives
Türkiye in May. In November, a report was adopted on
like the Green Agenda. The gathering also underscored
current EU–Türkiye relations, outlining ways to improve
the importance of regional security, aiming to
cooperation. The EU continues to support refugees
strengthen cooperation against organised crime and
and communities in Türkiye by providing education,
cybersecurity threats.
healthcare and border protection.
 137

Georgia, Moldova and Ukraine The €17 billion Eastern Partnership Economic and

GENERAL REPORT
Investment Plan is the EU’s main instrument for
This year’s historic enlargement package was the first strengthening resilience in the region, linked to the
to include an assessment of these three countries’ Global Gateway strategy (see below). By the end of
ability to fulfil the obligations of EU membership. Over 2023, €8.6 billion of expected investment had been
the past year, Georgia, Moldova and Ukraine have each mobilised, with €5 billion for country-specific flagship
demonstrated their commitment to joining the EU. projects.
Their path to accession will unfold through targeted
reforms of judicial systems, a crackdown on organised The EU, its Member States and its partners will step
crime and ongoing efforts to improve the political up their efforts to implement the Eastern Partnership
landscape, with a focus on de-oligarchisation and agenda for recovery, resilience and reform. This
human rights. The Commission’s recommendation – includes addressing the impact of Russia’s war of
and the historic decision by the European Council – aggression against Ukraine on the whole region.
to open accession negotiations with Moldova and Cooperation will focus on several areas, such as
Ukraine, and to grant candidate status to Georgia, connectivity, transport, energy and the green and
acknowledged their significant efforts in aligning with digital transitions, along with human rights, civil
EU standards. society, the rule of law and security matters. Despite
not engaging with the Lukashenka regime, the EU has
continued to directly support the Belarusian people,
Eastern Partnership mobilising €100 million between 2020 and 2023.
The Eastern Partnership’s post-2020 agenda has
focused on resilience, recovery and reform, and has
been implemented in line with the EU accession path
of Georgia, Moldova and Ukraine.

The EU continued to invest in efforts to secure a

lasting peace between Armenia and Azerbaijan in
2023, and increased its humanitarian assistance to
the region, which at the end of the year amounted
to more than €25.8 million since the escalation of
the conflict in 2020.

Josep Borrell, High Representative of the Union for Foreign

Affairs and Security Policy and Vice-President of the European
Commission in charge of a Stronger Europe in the World
(foreground, centre), at the UN Security Council meeting on the
conflict between Armenia and Azerbaijan at the UN’s headquarters
in New York, United States, 21 September 2023.
13 8

Southern Neighbourhood
T H E E U I N 2023

In the Southern Neighbourhood, the Agenda for the green and energy transitions, people-to-people
the Mediterranean regional cooperation plan and contacts, and migration and mobility.
its financial strategy, the €30 billion Economic and
The EU also continued to support people living
Investment Plan, have made good progress in areas
through crises in Lebanon, Libya, Syria and
such as economic development, governance, digital
Palestine (this designation shall not be construed
transformation, energy and climate resilience, and
as recognition of a State of Palestine and is without
migration.
prejudice to the individual positions of the Member
The EU–Tunisia Memorandum of Understanding, States on this issue). At the June Brussels Conference
concluded in July, addresses common challenges on Syria, the EU pledged €3.8 billion in grants for
and future opportunities on the economy and trade, Syria and its neighbouring countries.

Financial support for the Southern Neighbourhood

• €3.8 billion • €660 million

• in EU grants committed of blended grants (non-
•

to the Southern repayable funds) have been

Neighbourhood in the committed
2021–2023 period

EU grants, together with blended grants and guarantees provided to partner independent fiscal
institutions, will mobilise €23.8 billion in investment.
 139

EU–Western Balkans and Neighbourhood flagship projects for 2023

Projects are implemented under the economic and investment plans
agreed with the countries.

Regional – Western Balkans

The Trans-Balkan Electricity Corridor is a 400 kilovolt interconnection linking the electricity transmission
systems of Bosnia and Herzegovina, Montenegro and Serbia with those of Croatia, Italy, Hungary and

GENERAL REPORT
Romania.

Regional – Southern Neighbourhood – Medusa cable

The Medusa submarine fibre-optic cable in the Mediterranean will connect northern African countries with
European countries to increase internet speeds in northern African universities.

Regional – eastern Europe

The Black Sea Digital Connectivity submarine cable will support the digital transformation and increase the
digital resilience of the region.

North Macedonia Georgia

The Rail Corridor VIII interconnection will connect The Black Sea Connectivity submarine electricity
North Macedonia to the Bulgarian border. cable will export green energy from South
Caucasus to the EU.

Morocco Tunisia
• The tramway network in the Rabat–Salé– Construction of ELMED, the first high-voltage
Témara agglomeration will be extended by submarine electricity cable interconnection
37 km. between Italy and Tunisia.
• A call for proposals for the P2X hydrogen
power plant.

Israel Egypt
The EuroAsia Interconnector submarine electricity • GREGY, a high-voltage electrical
cable will link Greece, Cyprus and Israel. interconnection in the eastern Mediterranean
between Europe and Africa, running from
Egypt to Greece.
• Modernisation of the Alexandria Area Control
Centre.
• Production of methanol for green shipping.

Jordan
• Aqaba–Amman Water Desalination and
Conveyance project.
• Renovation and modernisation of the As-Salt
sewage treatment plant; construction of a
biogas plant.
14 0

International partnerships and the

T H E E U I N 2023

Global Gateway
In 2023, the EU made significant progress in the Pacific, the Western Balkans, and the Eastern and
rolling out the Global Gateway – its contribution to Southern Neighbourhoods. These projects spanned
narrowing the global investment gap and supporting various sectors, such as strategic transport routes,
the green and digital transitions globally. Notably, the renewable energy, submarine cables, critical raw
year saw almost 90 new flagship projects rolled out materials, teacher training and vaccine production.
in Africa, Latin America and the Caribbean, Asia and

On 25 and 26 October, the first Global Gateway

Forum brought together leaders from the EU,
partner countries, businesses, civil society,
think tanks, financial institutions and international
organisations to scale up the implementation of
the Global Gateway strategy. In just 2 days, around
€3 billion worth of agreements were signed. The
EU has committed to mobilising €300 billion under
the strategy by 2027.

Ursula von der Leyen, President of the European Commission

(right), and Sheikh Hasina, Prime Minister of Bangladesh (left), at
the Global Gateway Forum, Brussels, Belgium, 25 October 2023.

For the first time in 8 years, the EU and the to further cooperate on energy and on critical raw
Community of Latin American and Caribbean States materials. An EU–Latin America and the Caribbean
held a summit that endorsed the EU–Latin America Digital Alliance was established for cooperation on
and the Caribbean Global Gateway Investment digital and space issues. In addition, in response
Agenda. The agenda is expected to mobilise more to the climate crisis, the EU’s flagship Euroclima
than €45 billion over the coming years. In 2023, programme was expanded to the 33 Latin American
the EU also concluded various bilateral strategic and Caribbean countries.
partnerships with partner countries in the region
 141

The EU–Latin America and

GENERAL REPORT
the Caribbean Global Gateway Investment Agenda

The EU and its Member States have committed

over €45 billion to support the reinforced
partnership with Latin America and the Caribbean
until 2027. Other countries are expected to
contribute, along with the private sector and
financing institutions.
The agenda includes more than 130 projects
in Latin American and Caribbean countries to
leverage quality investment.
Projects will be implemented through Team Europe
initiatives: the EU, the Member States,
development financing institutions (including the
European Investment Bank), export credit agencies
and all other public sources of funding will work in
partnership with the private sector.

V I D E O Global Gateway: launch of the Amazonia+ programme.

The agenda is structured around key pillars:

•a fair and •an inclusive • human development • health resilience

green transition digital transformation and vaccines

Similarly, the EU further strengthened its relations climate adaptation, ensure food security and respond
with the Asia–Pacific region during the year. In 2022, to disasters. Furthermore, the EU initiated new
it announced the leveraging of up to €10 billion in partnerships for sustainable energy and natural
investment for Global Gateway projects with the resource management. With the goal of improving
member countries of the Association of South- sustainable connectivity between Europe and Central
East Asian Nations. As part of this, it launched an Asia, it mapped transport links between the two
Earth-observation programme in 2023 to support regions and the resulting investment opportunities.
14 2
T H E E U I N 2023

Jutta Urpilainen, European Commissioner for International

Partnerships (second from right), at the signing of the Samoa
Agreement, Apia, Samoa, 15 November 2023.

A new partnership emerged between the EU and The EU is moving forward with the implementation of
the Organisation of African, Caribbean and Pacific the €150 billion Africa–Europe Global Gateway
States, an organisation that includes 79 nations. On Investment Package, including major new Team
15 November, they signed the Samoa Agreement, Europe initiatives (joint efforts between the EU and
replacing the Cotonou Agreement. The new text its Member States) in sectors such as health, digital
focuses on joint efforts against global challenges technologies, green energy, education and transport.
such as climate change, human rights and health
issues. It is set to shape relations between the EU
and the organisation for the next 20 years.

2023 Team Europe initiatives

• The roadmap of the EU–Namibia • The EU and its Member States have
Partnership on sustainable raw materials scaled up support for the production
value chains and renewable hydrogen was of clean energy in Africa, for example
launched in October 2023. Concurrently, through the launch of the Just Energy
the EU signed agreements on similar Transition Partnership with Senegal and
partnerships with the Democratic Republic the inauguration of the Gorou Banda solar
of the Congo and Zambia. power plant in Niger.

• Vaccine production has started in South • In January 2023, the EU and its Member
Africa, and production facilities are being States also launched a €100 million
set up in Ghana, Rwanda and Senegal. Regional Teachers Initiative to support
quality education for all.

On 18 December 2023, Ursula von der Leyen, President of the

European Commission (left), went to Kigali in Rwanda where she
delivered an address at the launch ceremony of BioNtech Africa,
together with Paul Kagame, President of Rwanda (right).
 143

GENERAL REPORT
The EU is financing the
construction of a bridge
over the Logone River,
connecting Cameroon
with Chad. Until now,
transportation and
commerce have been
limited to traditional
wooden canoes that
transport goods
and people. Yagoua,
Cameroon, 5 April 2023.

The EU took a concrete step towards combating The EU and its Member States together remain the
inequality in 2023 with the introduction of the leading provider of official development assistance
Inequality Marker. This tool helps to assess whether worldwide, with €92.8 billion of aid provided in
measures are reducing inequalities and meeting the 2022 (the latest year for which data are available),
needs of the bottom 40 % of the population. representing 43 % of the total.

Humanitarian aid and civil protection

Humanitarian aid In February 2023, a powerful magnitude-7.8
earthquake hit Syria and Türkiye. The earthquake was
Humanitarian aid saves lives, upholds human one of the strongest in the region in over a century.
dignity and promotes global solidarity in crises and Yet more devastation was caused by subsequent
emergencies. The EU is collectively one of the largest earthquakes.
donors of humanitarian aid in the world. With a budget
of €2.4 billion in 2023 alone, it focuses not only on
new emergencies but also on forgotten crises.
Due to conflict, economic shocks, extreme weather
and the pandemic, food insecurity is at a record
high. Russia’s illegal invasion of Ukraine has
further affected food, energy and fertiliser prices
and disrupted supply chains. In 2023, more than
€668 million was allocated for humanitarian food
and nutrition assistance. Through this aid, the EU
aims to ensure access to safe and nutritious food for
the most hungry and vulnerable people in crises.
Over the past 12 years of the Syrian crisis, the EU
and its Member States have provided extensive
support totalling €30 billion to the Syrian people.
This covers humanitarian, development, economic Thanks to EU funding and partner organisations, hygiene aid is
and stabilisation aid, with an additional €170 million provided to earthquake-affected people living in tents, Türkiye,
allocated for humanitarian assistance in 2023. 23 August 2023.
14 4

The EU reacted immediately: it sent 30 search and and climate funds to tackle the root causes of these
T H E E U I N 2023

rescue teams to Türkiye, mobilised humanitarian needs and encouraged them to increase their level of
assistance for both countries and convened the commitment.
international donors’ conference ‘Together for the
In addition to funding, the EU has also used its own
People in Türkiye and Syria’ on 20 March. At the
capacities to complement the work of humanitarian
conference, the international community pledged
partner organisations. Through the European
€7 billion to support the humanitarian needs and
Humanitarian Response Capacity, it provided direct
reconstruction of the affected regions in Türkiye,
logistical support throughout the year, particularly
and to provide humanitarian aid, along with early
in the Middle East. This included the distribution of
recovery and resilience support, to Syria. This
life-saving supplies from the EU’s own stocks and
included a €1.1 billion contribution from the EU
the organisation of EU Humanitarian Air Bridge
budget, with €400 million secured in 2023 under the
operations to transport relief cargo for partner
European Union Solidarity Fund.
organisations.
A magnitude-6.8 earthquake struck Morocco in
The same was done in response to the conflict that
September. The EU quickly mobilised €1 million
broke out in Sudan in April by delivering life-saving
in emergency funds and sent humanitarian and
supplies to people affected by the conflict in Sudan
logistical experts, and stood ready to offer more
and refugees hosted in Chad. A parallel Humanitarian
support if needed.
Air Bridge was undertaken following further conflict
With the global need for humanitarian aid clearly escalation in the eastern Democratic Republic of the
on the rise, the EU has stepped up its advocacy to Congo, and a series of flights continued to provide
broaden the global donor base and close the growing emergency aid to the people of Afghanistan, which is
gap between funding and needs, which exceeded facing the world’s biggest humanitarian crisis.
almost €40 billion for the first time in 2023. The
In March 2023, the EU organised a solidarity
topic was at the centre of the annual European
conference with migrants and refugees from
Humanitarian Forum in Brussels, Belgium, in March.
Venezuela, raising €815 million and highlighting this
With the aim of finding sustainable solutions to
forgotten humanitarian crisis. Further pledging events
humanitarian needs, it brought together EU ministers
were organised to support the people of Yemen and
for foreign affairs to discuss the use of development
the crisis areas in the Horn of Africa and the Sahel.

More than half of the population of Mali is under the age of 18.
About a third of them live in areas affected by armed conflict.
The EU is actively working to protect these children, responding
quickly to new displacements and ensuring their education
continues uninterrupted.

© DRC/Bakary Diouara

Recreational activities for displaced

children in Mali are arranged in small
groups to ensure safety and foster a sense
of intimacy. This approach also makes
it easier to identify children who need
additional support. Vulnerable children
then receive psychosocial support and
assistance, tailored to their specific needs.
11 April 2023.
 145

Disaster response, prevention and of this, the EU has built up its own shelter reserves,

GENERAL REPORT
which can accommodate thousands of people in
preparedness several countries. It has also started setting up a
The EU Civil Protection Mechanism, established in rescEU Emergency Medical Team, creating the first
October 2001, forms the backbone of cooperation pan-European field hospital. Several Member States
and solidarity between the Member States and 10 have received EU funding to build rescEU’s first
other participating states in the event of human- chemical, biological, radiological and nuclear strategic
made or natural disasters. When an emergency reserve, along with an emergency energy reserve
overwhelms the response capabilities of a country in with generators and other equipment.
Europe or beyond, it can request assistance through The EU supports governments, organisations and
the mechanism. communities in anticipating, preparing for and
With the inclusion of Moldova and Ukraine in responding to disasters. Communities are helped to
2023, the mechanism has grown to 37 members achieve these aims by using early warning systems,
collectively strengthening prevention, preparedness sharing expertise, providing emergency response
and disaster response in Europe. training and stockpiling relief items.
The EU plays a key role in coordinating and financing In this respect, the EU has renewed its commitment to
the collective disaster response within the EU and the UN Sendai Framework for Disaster Risk Reduction.
worldwide. In 2023, demand for assistance through It also supports Latin America and the Caribbean
the mechanism surged, reaching 66 activations in through a Memorandum of Understanding on
response to both natural and human-driven crises Cooperation in Disaster Preparedness and Risk
across Europe and beyond. These included the Management. As the risk landscape in Europe has
ongoing war in Ukraine, the massive earthquake in worsened, the EU adopted five disaster resilience goals
Syria and Türkiye, devastating forest fires in Canada in 2023. These are targets that guide communities
and Greece and unprecedented floods in Italy, Libya across Europe to help them predict, prevent, prepare
and Slovenia. for and respond to future major disasters. They
establish a link between specific disaster scenarios and
The EU has further expanded its strategic rescEU response capacities, and aim to strengthen disaster
reserves, created as a last resort to support major resilience tangibly and efficiently.
emergencies that overwhelm Member States. As part

Romanian firefighters on the

island of Rhodes, Greece,
provide a rabbit rescued from
the flames with much-needed
hydration. When fires rage in
their natural habitat, animals
are often left helpless and © Romanian Civil Protection.
unable to escape. July 2023.
14 6

Five EU disaster resilience goals

T H E E U I N 2023

Anticipate
Better risk assessment

Prepare
Increased awareness and
readiness of people

Alert
Enhanced early
tock

warning systems
S
be
do

A
©

Respond
A stronger EU Civil
Protection Mechanism

Secure
Robust emergency response
coordination across Europe
 147

Trade agreements

GENERAL REPORT
The EU works with countries around the world and with a developing country on sustainability. Work on
international organisations to promote trade and the EU–Angola Sustainable Investment Facilitation
economic prosperity, while ensuring technology helps to Agreement also progressed, with the Commission
serve society and respects shared democratic values. proposing that the Council conclude and sign the
agreement.
In June, the Commission and the High Representative
for Foreign Affairs and Security Policy, Josep Negotiations on trade agreements with Australia,
Borrell, introduced the European Economic Security India and Indonesia continued, as did technical and
Strategy – a comprehensive approach for a stronger legal work on the EU–Mercosur trade agreement.
and more resilient EU economy. It will grow the EU’s Negotiations with Thailand were also relaunched.
industrial base, protect vital economic interests and
Following the EU–Japan High-Level Economic
promote collaboration with a wide range of non-EU
Dialogue in June and the EU–Japan Summit in July,
countries to enhance global economic security.
the two parties agreed to further collaboration under
In 2023, the EU made good progress on several the EU–Japan Economic Partnership Agreement. This
free trade agreements. It signed and adopted an includes broadening talks about economic security
agreement with New Zealand, concluded in 2022. The and agreeing on digital trade principles.
EU–Chile agreement was also signed, paving the way
for formal adoption.
The EU concluded negotiations on and signed the
Economic Partnership Agreement with Kenya, the
most ambitious agreement the EU has negotiated

In December, Beijing hosted a landmark EU–China

Summit, the first in-person summit since 2019,
which focused on making concrete progress on
EU–China relations. Central to the agenda were
discussions on balancing the EU’s trade deficit with
China, fostering an equitable economic partnership
and adhering to international norms.
The assembly also delved into critical global
concerns such as Russia’s war of aggression
against Ukraine, Middle East tensions, climate
change, health challenges, and human rights
issues within China. The summit underscored the
importance of collaboration and mutual respect in
global affairs.
14 8

With the United States, negotiations continued on The EU and the United States continued developing
T H E E U I N 2023

the Global Arrangement on Sustainable Steel and their digital and trade relations within the framework
Aluminium to address overcapacity in global markets of the EU–US Trade and Technology Council, which
and make the global steel trade more sustainable. held its fourth Ministerial Meeting in May. Building on
To support these efforts, the United States and the the success of the EU–US council, the EU and India
EU agreed to extend the suspension of US tariffs also held the first Ministerial Meeting of the EU–India
on certain quantities of EU steel and aluminium Trade and Technology Council in May, following its
and of EU rebalancing tariffs on US goods until launch in February. During the meeting, both sides
31 December 2025 and 31 March 2025 respectively. agreed to deepen their cooperation in three key
Negotiations also began with the United States on a areas: technology, clean energy and trade.
Critical Minerals Agreement, which would allow EU-
produced electric vehicles and parts to benefit from
certain US Inflation Reduction Act tax credits.

EU trade agreements in 2023

Customs Union, In place (**) (+) Adoption/ratification

European Union
EEA and OCT (*) ongoing (**)

Being negotiated (**) On hold (**) No agreement (**)

(*) European Economic Area; overseas countries and territories.

( )
** Free trade agreement; deep and comprehensive free trade agreement; investment agreement; enhanced partnership and
cooperation agreement; partnership and cooperation agreement with preferential element.
(+) The agreements with Tunisia and with eastern and southern Africa are currently being updated; the updated agreements
with Chile and Mexico are under ratification; the deep and comprehensive free trade agreement with Georgia does not
apply in Abkhazia and South Ossetia.
 149

The Windsor Framework is an important milestone communities and helping Cyprus’s economy. To

GENERAL REPORT
in EU–UK relations. It provides definitive solutions further aid this growth, an EU-funded One-Stop Shop
to the implementation challenges relating to the opened in October, offering advice to local traders.
Protocol on Ireland/Northern Ireland (an integral
The EU launched several digital partnerships to
part of the Withdrawal Agreement); reaffirms the
strengthen its engagement with like-minded partners,
full commitment from both the EU and the United
including Canada and countries in the Indo-Pacific
Kingdom to the Good Friday (Belfast) Agreement;
region, such as Singapore and South Korea. The aim
and eases trade between Northern Ireland and
is to increase cooperation to cultivate a safe, secure
Great Britain and protects the EU Single Market.
digital space and a resilient digital transformation.
Both parties are committed to the full and timely
The strategic partnership between the EU and Japan
implementation of all elements of the framework.
has also continued to grow, with both parties signing
The Trade and Cooperation Agreement also agreements to enhance cooperation on digital
progressed in 2023, allowing cooperation in trade, infrastructure, semiconductors and raw materials
transport, energy and security, along with areas such supply chains.
as cybersecurity and financial services. The United
Another one of the EU’s goals is to enhance its ties
Kingdom and the EU reached an agreement on the
with the world’s leading scientific communities. New
former’s participation in Horizon Europe, the EU’s
Zealand’s entry into Horizon Europe in 2023 broke
research and innovation programme, and Copernicus,
new ground, as the EU’s first distant partner in this
the EU’s world-leading Earth-observation programme.
venture. Canada’s involvement further extends this
Thanks to the EU’s support for the Cyprus settlement international scientific alliance.
process, the Green Line trade between Turkish and
Greek Cypriots soared to a record €16 million in
2023. This trade is building trust between the two

Margrethe Vestager, Executive Vice-President of the European

Commission in charge of a Europe Fit for the Digital Age and European
Commissioner for Competition (second from right), and Valdis Dombrovskis,
Executive Vice-President of the European Commission in charge of an Economy
that Works for People and European Commissioner for Trade (third from right), at
the EU–India Trade and Technology Council, Brussels, Belgium, 16 May 2023.
15 0
T H E E U I N 2023

9. Institutional
developments and
strengthening
democracy
Introduction From left to right: Charles Michel, President of the European
Council, Jessika Roswall, Swedish Minister for EU Affairs, Shirin
In 2023, the European Union’s institutions and bodies Ebadi, Iranian lawyer and writer, Roberta Metsola, President of the
European Parliament, Samantha Cristoforetti, Italian astronaut,
worked closely together to address the common and Ursula von der Leyen, President of the European Commission,
interests of the EU and deliver results for its citizens. at the European Parliament’s celebration of International Women’s
Efforts continued to be made to improve the EU’s Day, Strasbourg, France, 15 March 2023.
lawmaking process and to reform administrations
so they are better prepared for the opportunities
and challenges of a changing world. Achieving
better results for citizens by improving EU rules is a
shared objective, and is the responsibility of all of
the EU institutions and Member States. This includes
empowering citizens to participate actively in the
democratic process.
 151

Working together

GENERAL REPORT
The EU’s institutional set-up is unique, and its In 2023, EU institutions made progress on several
decision-making system is constantly evolving. key legislative initiatives and stepped up efforts to
In principle, the European Commission proposes make the EU more transparent, more accountable
new laws, and the European Parliament and the and more effective. Bearing in mind the Commission’s
Council of the European Union, as co-legislators, communication ‘Towards a resilient, competitive and
adopt them. The Member States then implement sustainable Europe’, EU leaders met in Granada, Spain,
the laws, and the Commission ensures that they in October to launch a discussion aimed at setting
are properly applied. The work of these institutions the European Union’s general political directions and
is complemented by other institutions and bodies. priorities for the years to come.

The presidency of the Council of the European

Union rotates between the Member States every
6 months. In 2023, the presidency was held first
by Sweden and then by Spain.

Ursula von der Leyen, President of the

European Commission, members of
the Swedish delegation and members
of the College of the European
Commission at the introductory
meeting of the Swedish Presidency
of the Council of the European Union,
Kiruna, Sweden, 12 January 2023.
15 2
T H E E U I N 2023

Progress on legislative initiatives

In 2023, the EU’s co-legislators made progress rules to reduce final energy consumption and raise
on several major initiatives. the share of renewables in the EU’s energy mix (see
Chapters 3 and 4).
On solidarity with Ukraine and military support
(see Chapter 1), the Parliament and the Council Concerning the digital transition, the Parliament
reached a political agreement on the Act in Support and the Council adopted new rules to strengthen
of Ammunition Production, mobilising €500 million Europe’s semiconductor sector (the Chips Act), which
to manufacture ammunition and missiles. They will reinforce the EU’s technological sovereignty. The
also agreed on new measures to urgently boost the co-legislators also adopted the Data Act, which will
capacities of the EU defence industry in ammunition ensure fair access to data, and reached a political
production (the European Defence Industry agreement on the Artificial Intelligence Act, which will
Reinforcement through Common Procurement Act – promote the safe use of artificial intelligence in the
see Chapter 8). In view of Russia’s continued war EU for the benefit of all (see Chapter 5).
of aggression against Ukraine, the Council further
Negotiations between the Parliament and the
agreed to the 11th and 12th packages of economic
Council ended in a political agreement on the New
and individual restrictive measures (sanctions).
Pact on Migration and Asylum (see Chapter 7) and
Progress was made on strengthening the economy on the transparency of political advertising (see
and the EU’s competitiveness, with agreements below). Progress was also made on the directive
between the co-legislators on important proposals on improving the working conditions for platform
such as the EU Green Bonds Regulation, the banking workers (Chapter 6). Moreover, with regard to the
package and the Central Securities Depositories Schengen area, the Council unanimously agreed
Regulation, along with the groundbreaking Critical to lift air and maritime internal border controls with
Raw Materials Act (see Chapter 2). Additionally, Bulgaria and Romania (see Chapter 7).
the Council agreed on a common position on the
Furthermore, the political agreement on the
Commission’s proposal to reform the EU’s economic
targeted revision of the Financial Regulation marks
governance rules.
a significant step in protecting the EU budget (see
Regarding the green agenda, the Parliament and the Chapter 2), enhancing transparency, improving crisis
Council adopted key pieces of legislation delivering management and reducing administrative burdens
on the climate targets for 2030. These include new on Member States.

On 3 July 2023, Ursula von der Leyen, President of the European

Commission, and Members of the College of the European
Commission attended the inaugural meeting of the Spanish
Presidency of the Council of the European Union in Madrid,
Spain.
 153

Making sure that EU rules are Via its European Alliance of Cities and Regions

GENERAL REPORT
for the Reconstruction of Ukraine, the European
applied Committee of the Regions highlighted the importance
EU law must be implemented and applied fully of decentralisation and strengthening local self-
and correctly everywhere so that people and governance in Ukraine’s recovery and reconstruction
businesses can enjoy their full benefits. To ensure process.
this, the Commission opened more than 500 new The national parliaments of most Member States
infringement procedures in 2023, either because continued their active cooperation with the EU
Member States had failed to transpose EU directives institutions, scrutinising proposed new laws for their
into national law on time or because they were not respect of the subsidiarity principle. The principle of
applying EU rules correctly or their national rules did subsidiarity defines the circumstances in which it is
not fully conform to EU law. legitimate for action to be taken by the EU, rather
On the other hand, 1 000 infringement procedures than by the Member States. In this respect, the
could be closed during the year as Member States national parliaments raised concerns in only a very
achieved compliance with EU rules. This will bring few cases. They participated in the written and oral
concrete benefits, such as stronger rights in the political dialogue with the Commission on a wide
digital single market, improved energy efficiency, range of topics, and in interparliamentary meetings
greater protection for the environment, better hosted by the European Parliament.
financial services and safer transport. Relations between the other institutions and the
The Commission also continued its work on European Ombudsman continued to be both good
preventing breaches in the first place, for example and very constructive. The Commission remains the
by providing early support to Member States on main addressee of the Ombudsman’s inquiries as
the implementation of EU law through practical the institution with the most direct dealings with the
guidance, meetings, training and technical assistance. public. In 2023, the Commission implemented about
three quarters of the Ombudsman’s proposals, and
cases of maladministration were very rare.
Active interinstitutional As the guardian of the EU’s finances, the European
cooperation Court of Auditors carried out a series of financial
The European Economic and Social Committee and performance audits, including in areas such
and the European Committee of the Regions as the pandemic recovery fund NextGenerationEU,
provided important and relevant contributions to the EU’s economic competitiveness, resilience to
the Parliament, the Council and the Commission, security threats, respect for European values, climate
and engaged strongly in supporting Ukraine. The change and combating fraud. As the Court’s main
European Economic and Social Committee pursued auditee, the Commission accepted the vast majority
its initiative to select enlargement candidate of recommendations addressed to it, to ensure that
members, which seeks to involve civil-society EU funds are raised and spent in accordance with
representatives from EU candidate countries in the the relevant rules and that they achieve the intended
daily advisory work of the Committee. results.

© Adobe Stock
15 4

Good administration
T H E E U I N 2023

Strengthening public trust Parliament is of key importance in this respect. It

allows the Bank to explain its actions and policies in
Transparency, integrity and accountability are the detail to the elected representatives of EU citizens,
key characteristics of a democracy based on the and to listen to their concerns. In this way, citizens
rule of law. They promote good governance and and their representatives can form a judgement
build trust in the policymaking process. They are on the Bank’s performance in view of its primary
also extremely important political tools in preventing objective of maintaining price stability.
corruption. Following allegations of corruption and
the subsequent arrest of a Member of the European
Parliament at the end of the previous year, in 2023 Better Regulation
the Parliament implemented a set of reforms
The Commission’s Better Regulation agenda is
aimed at strengthening its integrity, independence
the centrepiece of its work to ensure the EU’s
and accountability as a way of preventing further
competitiveness and resilience through smarter,
interference in its work.
more efficient and more effective regulation. This
With a view to strengthening public trust in the builds on a proven framework, recognised by
EU institutions, in June the Commission presented the Organisation for Economic Co-operation and
a proposal for an interinstitutional ethics body Development.
with the aim of establishing common standards
In 2023, the Commission committed to reducing the
for the ethical conduct of members and a formal
burden associated with reporting requirements by
mechanism for cooperation and exchange on
25 % over time. It put forward 41 initiatives in its
ethical requirements. The Commission invited all EU
work programme, making it a priority to streamline
institutions (the Parliament, the European Council,
reporting requirements that impose disproportionate
the Council, the Court of Justice, the European
burdens on businesses or administrations. The aim is
Central Bank and the Court of Auditors, along with
to reduce administrative burdens without
the European Economic and Social Committee and
undermining policy objectives or lowering social,
the European Committee of the Regions) to begin
economic, environmental or any other standards,
negotiations and organised the first political and
including consumer protection. The process will be
technical meetings on a potential agreement.
informed by 200 contributions that were received
In June, the European Central Bank formalised its from businesses, public authorities, civil society and
accountability arrangements with the Parliament. citizens in a dedicated call for evidence.
The dialogue between the Central Bank and the

Christine Lagarde, President of

the European Central Bank (left),
and Roberta Metsola, President
of the European Parliament
(right), signing the accountability
arrangements, Brussels, Belgium,
5 June 2023.
 155

Rationalising and simplifying reporting requirements

How?

Remove obsolete

GENERAL REPORT
reporting (e.g. of
limited usability)

Allow Modernise the

stakeholders reporting process
the time to (digitalisation,
adapt to new innovative technology
requirements to gather data)

Reduce
Reduce
the number
the frequency
of businesses
dobe Stock of reporting
concerned ©A

Consolidate
overlapping
obligations

Examples
Proposal Aim Expected savings/benefits

Reformed Union To create a single EU interface €2 billion

Customs Code and facilitate data reuse

Revised Combined To simplify procedures (e.g. use €430 million

Transport Directive digital transport data platforms
for proof of eligibility)

Adjusted Accounting To reduce reporting More than 1 million

Directive thresholds requirements companies are expected
to benefit

Alternative dispute To remove some disclosure Around €630 million

resolution obligations and replace
the online platform
15 6

The Commission also continued

implementing the ‘one in, one out’
approach, which ensures that any newly
introduced burden is offset by removing
an equivalent burden in the same policy
area. The approach complements the
Commission’s Regulatory Fitness and
Performance programme, through
T H E E U I N 2023

which the Commission seeks to

systematically identify and remove red
tape and unnecessary costs whenever EU
legislation is revised and evaluated.

Maroš Šefčovič, Executive Vice-President of the European Commission in charge of the European Green Deal,
Interinstitutional Relations and Foresight, at the eighth plenary meeting of the Fit for Future Platform, Brussels, Belgium,
28 November 2023. This high-level expert group supports the Commission in its efforts to simplify EU laws and reduce
unnecessary costs.

Strengthening administrative foresight will help the EU to anticipate and respond

better to future needs and to otherwise unexpected
cooperation adverse developments and complex crises, like those
Efficient national public administrations are critical we have seen in recent years.
to transforming EU and national policies into reality; The 2023 Strategic Foresight Report analysed the
implementing reforms to the benefit of people social and economic challenges on the path towards
and businesses alike; and channelling investment achieving sustainability and maintaining people’s
towards achieving the green and digital transitions well-being. It also shed light on how successfully
and greater competitiveness. With the aim of managing those challenges can help the EU
enhancing the European administrative space, the strengthen its global leadership. The report suggests
ComPAct initiative offers a new set of principles to 120 concrete areas for action and presents the first
help Member States address skill gaps and deliver results of the pilot scheme on the ‘beyond-GDP’
on the target of having 100 % of key public services approach, which aims to support the development
accessible online by 2030. This will enable EU of progress indicators that are more inclusive of
economies and societies to deliver on the ambitious environmental and social aspects.
2030 climate and energy targets, and will make
EU public administrations less bureaucratic, faster During the year, the Commission also further
in delivering services, more transparent and closer developed its cooperation with Member States
to the people. In this respect, the agreement on through the EU-wide Foresight Network, established
the Interoperable Europe Act in November was in 2021, which has contributed to an increased
an important milestone on the way to achieving amount of interest and investment in strategic
the EU’s digital targets for 2030 (see Chapter 5). foresight at the national level. The network also aids
Once adopted, the act will take the exchange of broader discussions at the EU level, such as the work
information in the EU public sector to the next level on the Resilient EU2030 report during the Spanish
and accelerate the sector’s digital transformation. Council Presidency and the declaration resulting from
the European Council in Granada, Spain.
The European Strategy and Policy Analysis System
Strategic foresight brings together nine EU institutions and bodies to
To future-proof its policies in the increasingly anticipate future risks and opportunities. In 2023,
complex global context, the EU is progressively cooperation focused on the preparation of the new
embedding foresight into its policymaking. Possible Global Trends Report, which is due in early 2024.
scenarios, trends, risks and emerging issues are
explored, providing insights that are useful in
strategic planning and policymaking, in line with
the Better Regulation toolbox. Ultimately, strategic
 157

Ten areas for action to achieve sustainability

10. Reinforcing the EU’s

crisis preparedness
and response toolbox 1. A new European
social contract

GENERAL REPORT
9. Stronger democracy
though citizen 2. Leveraging the Single
agency and fairness Market to champion a
net-zero economy

8. Increased labour
market participation 3. A stronger link
and a focus on between the EU’s
future skills internal and external
policies
©A
dob
eS
to

k
A shift in production
c

Shifting policy and 4.

and consumption
7.

economic indicators
towards sustainable towards sustainability
and inclusive well-
being 5. Creating a Europe
Public budgets fit of investment by
increasing private
6.

for sustainability
flows

Strengthening democracy
Safeguarding the rule of law
With the Russian war of aggression against Ukraine the Member States to undertake the necessary
continuing to rage, it is vital that democracy, human reforms to strengthen the rule of law in four key
rights and the rule of law be proactively defended areas: the justice system, the anti-corruption
and upheld, in the EU and beyond. The 2023 ‘Rule framework, media pluralism and freedom. Given
of Law Report’ made an important contribution the positive results in the Member States, in 2023
to this, showing that 65 % of the rule-of-law the Commission announced that it would open the
recommendations issued to Member States in ‘Rule of Law Report’ to the more advanced accession
2022 had been fully or partially addressed. This countries to support them in their reform efforts.
reflects the significant efforts that are ongoing in
15 8
Foreign interference Democracy and elections
in democratic systems

• 81 % • 78 % • 72 %
of people in the EU of people in the EU are
of people in the EU agree that foreign are worried that voting worried that elections
interference is a serious problem that should decisions could be based in the EU could be
T H E E U I N 2023

be addressed on disinformation manipulated through

cyberattacks

• 81 % • 70 % • 65 %
of people in the EU agree that entities
representing foreign governments on EU of people in the EU are of people in the EU are
territory should be registered to prevent worried that foreign worried that they might
covert interference countries could covertly be pressured to vote in a
influence elections certain way

The role of civil society in

promoting and protecting
• 63 % • 53 %
democracy of people in the EU are of people in the EU are
worried that election worried that people who

87 %
results could be are not entitled to vote
manipulated would be voting

of people in the EU see an important role

for civil society in protecting democracy and
promoting democratic debate

Source: Flash Eurobarometer 528, December 2023.

Defending democracy
In a healthy and thriving democracy, citizens carried out on behalf of non-EU countries. In addition,
can freely express their views, choose their the package includes two recommendations: one to
political leaders and have a say about their strengthen electoral processes in the EU and another
future. Democracy in the EU is strong, but it is to promote the inclusive participation of citizens and
facing challenges from rising extremism, election civil society in policymaking.
interference, the spread of manipulative information
A political agreement was also reached on the new
and threats against journalists.
rules on the transparency of political advertising,
The defence-of-democracy package, adopted in under which political adverts will need to be clearly
December, aims to address challenges such as labelled and must include information such as who
foreign interference and to build resilience from paid for them and how much; to which election,
within by encouraging civic engagement and referendum or regulatory process they are linked;
democratic participation. The centrepiece of the and whether they are targeted.
package is a proposal to enhance transparency and
Promoting free and fair elections, ensuring the rule
democratic accountability by shedding light on covert
of law and guaranteeing media freedom are building
foreign influence. The measures will also improve the
blocks to create a space where every citizen feels
functioning of the internal market through common
free and empowered.
standards for interest-representation activities
 159

GENERAL REPORT
European elections
The European Cooperation Network on
Elections promotes concrete and practical
exchanges on a range of topics relevant
to ensuring free and fair elections,
including cybersecurity. The network will
continue supporting cooperation among
Member State authorities in the run-up to
the 2024 European elections.

V I D E O Video message by Roberta

Metsola, President of the European
Parliament, on the European elections from
6 to 9 June 2024.

Media freedom
In 2023, a political agreement was reached on the strategic lawsuits against public participation.
European Media Freedom Act, a new set of rules to The new rules will include the early dismissal
better protect media and journalists against political of unfounded claims, remedies against abusive
interference and to ensure that media can operate court proceedings and protection against foreign
more easily across borders. The act proposes a new judgments that will not be recognised or enforced in
independent European Board for Media Services, the EU.
comprised of national media regulators or bodies,
The Free Media Hub EAST project, led by the
to strengthen cooperation at the EU level, including
Prague Civil Society Centre and backed by the
against foreign propaganda, and help with the
Commission, awarded over €2.2 million in grants in
implementation of the new rules.
2023 to provide support to existing and established
An agreement was also reached on the new rules independent Belarusian and Russian media working
to protect journalists, rights defenders, civil-society in the EU (mainly in Czechia, Germany, Latvia,
organisations and others who are the targets of Lithuania and Poland).
16 0

A protester holds a banner with a photo of

Mahsa Amini, a 22-year-old woman who was
detained by Iran’s moral police for violating the
mandatory veil law in that country and lost her
life, Milan, Italy, 16 September 2023.
T H E E U I N 2023

The EU remembers the struggle and

continues to honour all those who have
paid the ultimate price for liberty. The
European Parliament’s 2023 Sakharov
Prize for Freedom of Thought was
awarded to Jina Mahsa Amini and the
Woman, Life, Freedom Movement in Iran.

© AFP

Empowering citizens Citizens’ Panels

The EU is committed to listening more closely to Between December 2022 and April 2023, the
citizens and stakeholders. Opening up policymaking Commission organised the first series of the new
processes to the public is another way to help the generation of Citizens’ Panels, embedding this new
EU to become more transparent, accountable and format of citizens’ participation into the policymaking
effective. process. Building on the experience acquired
Over the last several years, the Commission has during the Conference on the Future of Europe,
further strengthened its consultation activities and responding to the calls expressed during the
through the Have Your Say portal, which is the conference, the panels allow 150 randomly selected
centralised page for all feedback and input from citizens to deliberate and make recommendations
citizens and stakeholders. Input can be provided ahead of Commission proposals.
on calls for evidence, adopted proposals and draft The panels discussed the initiatives on food
acts. To reach out more widely, the Commission has waste, virtual worlds and learning mobility. The
increased the number of consultations translated recommendations were gathered in citizens’
into all official EU languages (from 59 % of public reports, which informed the preparation of and were
consultations translated in 2019 to 83 % in 2023). published alongside the final Commission proposals.
The Commission initiatives were put forward on
5 July (food waste), 11 July (virtual worlds) and
15 November (learning mobility) respectively.
The new Citizens’ Panels contribute to the wider
consultation process, through which the Commission
collects evidence from citizens and stakeholders.
 161

GENERAL REPORT
Dubravka Šuica, Vice-President of the European
Commission responsible for Democracy and
Demography, at the European Citizens’ Panel on
virtual worlds, Brussels, Belgium, 11 July 2023.

European Citizens’ Initiative Strengthening citizens’ rights

In April, the Commission registered the 100th European citizenship is one of the European Union’s
European Citizens’ Initiative since their introduction most significant achievements. To mark the 30th
in 2012. Over the year as a whole, the Commission anniversary of EU citizenship, the Commission
registered 37 new initiatives calling for EU action proposed measures to strengthen citizenship rights,
in various fields, such as the dignified treatment of accompanied by guidance for citizens with the most
migrants, animal welfare, rail networks, taxation, the essential information on their rights. The 2023 EU
preservation of Ukrainian culture and education on citizenship report highlights the progress made
EU citizenship. in promoting citizenship rights, common values
and democratic participation in the EU since the
The Commission also replied to four successful
publication of the last such report in 2020.
initiatives in 2023, calling for a reduction in the use
of pesticides, an end to the trade in loose shark fins,
an end to animal testing and a ban on the production
of and trade in fur. So far, 10 initiatives have
received more than 1 million statements of support
since 2012.
The 2023 report on the new European Citizens’
Initiative rules, which have been in force since
2020, shows that they deliver a more accessible,
less burdensome and easier-to-use framework for
organisers and supporters. It also suggests practical
improvements on how to increase general awareness
and inform citizens of their right to use the Citizens’
Initiative, and on how to provide more visible follow-
up to successful initiatives.
16 2
T H E E U I N 2023

The first General Assembly of the

EU Children’s Participation Platform,
co-chaired by and co-created with
children and teenagers from the EU,
took place in Brussels in June. Around
60 children came together to discuss
the topics – namely democracy, climate
change, mental health, safety and
poverty – that will steer the work of the
platform for 3 years.

Lessons learnt at the first General Assembly of

the EU Children’s Participation Platform.

Empowering children and young people

Almost 20 % of EU citizens are children. They have a activities across 67 countries, through a variety of EU
right to express their opinion on matters that concern programmes and policy initiatives. A number of new
them. In 2023, the EU Children’s Participation youth participation formats were launched, ranging
Platform created even more opportunities for under from the Youth Voices Platform and Youth Talks to
18s to take part in the decision-making process. the policy dialogues and the pool of European young
Almost 50 organisations working directly with journalists. Social media campaigns running from
children across the EU have become members of the February 2022 to May 2023 resulted in 210 million
platform since it was set up in October 2022. views and 10 million interactions, and reached
91.4 million people.
The 2022 European Year of Youth put young
people high on the political agenda at all levels and To become active citizens, young people need to
contributed to integrating the youth perspective understand how democracy works and what their
across various policy fields. The Year of Youth rights and responsibilities are. The EU Democracy
created large-scale mobilisation and engagement, in Action toolkit, published in May, introduces pupils
raising awareness of EU opportunities among to the European Citizens’ Initiative and encourages
millions of young people who took part in 13 000 them to take an active role in European issues.
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