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The outbreak of the pandemic in 2020, and more recently the war in Ukraine, has accelerated the trend of decoupling between the US and China, and Europe also appears to have joined in, albeit somewhat timidly for now. We analyse the EU’s dependence on China in order to understand whether European strategic autonomy is possible, or even desirable.

One of the big questions of the moment is whether the current rise in prices will spread to wages. To answer it, we analyse current wage dynamics in the euro area and what path they might follow in the future.

The upturn in debt yields on a global scale has put the fiscal situation back in the spotlight. The case of Europe is of particular interest, since in 2024 the fiscal rules will be reinstated after having been suspended since 2019 due to the pandemic and the outbreak of the war in Ukraine. What the new fiscal framework proposes? Is the proposed plan more or less strict than the current one?

The US interest rates have risen steadily and significantly, galvanised by the Federal Reserve’s rapid and aggressive monetary tightening policies. However, this does not necessarily mean that US bonds are more attractive than their European counterparts. A key factor in the comparison is the exchange rate.

This year’s return to fiscal rules – as safeguards of the sustainability of public debt – and the persistent shortfall in investment needed to address the EU’s priorities in the current geopolitical context create a scenario marked by frictions that requires a coordinated fiscal strategy that far exceeds the horizon of national and EU political mandates, both in duration and ambition. Therefore, it is essential that the differences that exist, as well as some taboos that have characterised the EU’s economic history on other occasions, are overcome.

The energy crisis has served as an incentive within the EU to accelerate the transition to energy sources that are more environmentally friendly and less dependent on fossil fuels, but this is seen as more of a medium-term goal.

With the third year of disbursements of European NGEU funds now behind us. Have expectations been met? Are the investments and reforms being implemented as planned?

Undoubtedly, the negotiation of the next budget will once again test the health of the European project, on which our strategic autonomy needed to address the geopolitical challenges that will continue to come from abroad will depend.

In this first article in a series of two, we review the recent trends in capital investment in Spain and make a comparison with the rest of the euro area. In a second article in this same Monthly Report, we investigate the incentives for investing, based on an analysis of the evolution of profitability and the cost of financing, sector by sector.