Euro area inflation has surged
Trade in services remains restricted
Agriculture and transport have contributed little to emissions reduction
Trust in the EU has been preserved and support for the euro is unprecedented
Europe has been hit strongly by the energy crisis
The rebound in GDP growth has been relatively weak
The rebound in consumption has been limited
Investment in the euro area continued to recover in 2022
Higher borrowing costs have reduced credit growth
The unemployment rate is historically low and job vacancies have increased
Profit share remains close to the historical average, but unit profits are increasing
The current account balance reflects expensive energy imports
Energy prices have been volatile
Headline inflation mainly reflects a negative terms-of-trade shock from energy and food
Market-based inflation expectations appear above the 2% target
Survey-based short-term inflation expectations have also increased
Headline inflation has peaked but core inflation continues to trend upwards
Financial conditions in the euro area have tightened considerably
The high number of vacancies suggests costly disinflation
Distributional effects of inflation are highest for low-income, rural, and senior households
Variable rate mortgages and loans are common in many countries
House prices have deviated strongly from rent prices in most countries
Households and firms remain highly indebted, and bankruptcies are increasing
European banks are well capitalised, but profitability is relatively low
Sovereign borrowing costs increased while the spreads moderated
Public debt increased from pre-pandemic levels in most countries
Fiscal support during the energy crisis was mostly untargeted
Compliance with fiscal rules has been partial
Fiscal policy was often procyclical
Most EU countries perform well in PMR, but some barriers remain
National Plans address regulatory weaknesses identified by the PMR indicators
European countries maintain regulatory barriers in digital trade
Barriers in some services sectors within the Single Market remain high
Within the Single Market, trade was liberalised in courier and telecommunication services
Recycling rates of waste differ across EU countries
The perception of corruption is high in some EU countries
Anti-money laundering measures can be strengthened
Reductions in greenhouse gas emissions need to accelerate
Energy, transport, and agriculture account for a large share of emissions
The ETS price has risen recently
Biomass accounts for a large share of renewable energy supply
Fossil fuels benefit from a favourable tax treatment
The effective carbon price is relatively high
Carbon pricing differs considerably across sectors and countries
Capital markets are less developed than in peer economies
Venture capital remains relatively low
Agricultural emission reductions have stalled
The effective carbon price in agriculture is relatively low
Agricultural income support remains high despite a growing trade surplus
Energy consumption remains heavily reliant on fossil fuels
Government support for renewables remains high and mostly benefits solar and wind
Lengthy permitting processes slow down the deployment of renewables
Retail prices for electricity differ across EU countries
Cars are the main source of emissions in the transport sector
The carbon-intensity of electric cars depends on the electricity mix of the country of production
Vacancies and wage premia in green jobs are high
Labour market churn is low on average
Occupational entry barriers remain high