The European economy stagnated in the second half of 2023, after performing strongly in the aftermath of the pandemic. Going forward, it will remain under pressure from slower growth and challenges to European competitiveness, while also navigating the green transition. After the pandemic, coordinated fiscal support from national governments and EU institutions proved critical, underpinning Europe’s economic resilience and spurring the public and private investment needed to transform and modernise the economy. Some progress has been made in digitalisation, energy efficiency, decarbonisation and building up the resilience of supply chains.