2014 will be a year of crucial global economic and political challenges, which are directly or indirectly related to the stability, the economic recovery and the international influence of the European Union. 2014 will be a year of developments at all levels and in this respect EU will have to define strategy and take decisive steps in an unstable international environment.

 

Despite the improved growth forecasts at an international level, the euro zone crisis and the growth slowdown in the large emerging market economies (EMEs) will continue to cause concern, while the political instability in the Middle East and other parts of the world may adversely affect the local business climate as well as potential investment opportunities and trade benefits. 

 

Global growth is still in low gear and the drivers of growth are shifting, according to the IMF’s latest World Economic Outlook (WEO) report. The latest OECD Economic Outlook highlights the fact that the six BRIICS alone now account for 30% of world GDP and 15% of global equity markets, while a slowdown in EMEs has greater effects on the world economy than in the past, via trade and financial cross-border linkages.

 

According to the World Trade Organisation, for 2013 growth of 2.5% is predicted (down from the 3.3% forecast in April) and 4.5% in 2014 (down from 5.0%), but conditions are gradually being crated for improved trade. E.U. is the major global player in international trade therefore it should further exploit the improved trade environment, in order to increase its opportunities as well as to enhance the framework for an international trade system that could offer equal opportunities at international level. 

 

Advancing bilateral negotiations particularly between key strategic partners, such as Europe and USA, is also necessary to utilize mutually beneficial investment and trade opportunities which contribute to growth and jobs. An ambitious deal between these two major partners would increase the size of the EU economy by € 120 billion equal to 0, 5% of G.D.P..

 

In the face of social and economic crises, more frequent natural disasters and poverty, global solidarity must become more evident. E.U is the biggest donor of development and humanitarian aid, thus it should fully justify its role. Despite tough economic times, a global coalition of developed and developing countries pledged the previous month to accelerate the fight to end extreme poverty by committing a record $52 billion in financing over the next three years for the World Bank’s fund for the poorest, the International Development Association (IDA).

 

Under these global trends the EU needs to stay united and stable. The main challenge for Europe is to make significant steps towards fiscal and economic consolidation and cohesioon, while combating fiscal and economic asymmetries and regional imbalances. Unemployment rate in Germany is 5%, rose to 10, 5% in France, climbed to 12,5% in Italy, while in Spain and Greece almost reached a record high of 28%. Apart from implementing structural reforms at national level it is necessary to develop mutual tools for strengthening the cohesion. Initial target is the creation of the banking union which is essential in order to overcome the fragmentation of the financial market and break the link between sovereigns and banks, while ensuring a common level of protection for the depositors across south and north Europe as well as equal treatment in terms of access of investors and enterprises to liquidity. Most important, though, EU must adapt new tools for growth and investments in SMEs and infrastructure, combat obstacles and barriers within the single market, boost innovation and competitiveness. In 2013 EU worked for laying sound foundations for fiscal stability and in 2014 EU will have to work for growth, development and cohesion. The Greek presidency of the Council of E.U. defined as priority the finalisation of these pending issues while it aims to boost growth and employment based on the exploitation of E.U. funding and strategic advantages such as the maritime sector.

 

E.U. has also to define its geopolitical interests and priorities with the aim of protecting its achievements and values and broadening its influence on promoting peace, security and global stability. At the moment, E.U. seems reluctant to exercise its geopolitical influence, not only at its north east borders as the case of Ukraine demonstrated, but also at its south borders. The evolution of the ‘Arab Spring’, the crisis in Syria that turns into tragedy and the unresolved Israeli-Palestinian problem create conditions for instability in the broader region. E.U. didn’t seem to have the capacity to anticipate, intervene and deal with these challenges. Different priorities between economically powerful Germany exhibiting an introverted attitude, France with economic weaknesses playing a global role, Great Britain being military powerful but politically anti European, are still evident. The recent fruitless discussions in the European Council for the common tools towards strengthening security and defence after the commitment of France for combating terrorism in Africa, is a sign of weakness of Europe as an international player.

 

2014 will also be the year of European citizens. In the following European elections taking place on May, citizens will have the chance to elect their representatives in the European Parliament by choosing political parties and candidates. Thus they will have the responsibility through their vote to contribute to the composition of a Parliament that will define the route of the E.U. within the midterm future. A deeper and more efficient Europe that we all seek for depends on the commitments of the political parties and the M.E.P.s representing them. The populism and the introversion that rise within E.U. are not aligned with the process of European integration and are definitely not serving the interests of EU citizens. 2014 is the year of major decisions and orientations for the governments and the citizens.