EU Business Leaders Voice Growing Pessimism Amid Economic Uncertainty

Confidence among EU business leaders in Europe’s economic prospects has plummeted during the second half of this year, according to a survey released on November 28. The European Round Table for Industry (ERT) reported a sharp decline in its key business sentiment index, which fell from 58 to 47, dipping below the 50-point threshold that separates optimism from pessimism.

The survey revealed widespread concern over escalating economic and political fragmentation, with 84% of CEOs identifying it as one of the top three threats to their businesses and 55% ranking it as the primary risk.

Additionally, the survey found limited support for protectionist measures. Only 9% of respondents favored tariffs to shield European industries from China’s growing competitiveness, and a mere 4% endorsed subsidies.

Maria Demertzis, a senior analyst at Conference Board Europe, the think tank behind the confidence metric, explained that CEOs were advocating for open and functional markets both within Europe and globally. She noted that business leaders viewed market openness as essential for long-term growth and stability.

The survey’s findings emerge against a backdrop of heightened trade tensions between the EU, China, and the United States. The previous U.S. administration had proposed tariffs of up to 60% on Chinese imports and universal tariffs ranging from 10% to 20% on other goods.

Demertzis suggested that the incoming U.S. president, who has portrayed himself as a dealmaker, might leverage tariff threats to push the EU toward increased defense spending and greater imports of U.S. liquefied natural gas (LNG). She cautioned that these proposals could be negotiation tactics aimed at extracting economic concessions from Europe.

The ERT survey also underscored broad support among business leaders for former European Central Bank President Mario Draghi’s recent recommendations to revitalize EU competitiveness. Draghi had called for deeper integration of the single market and a reduction in regulatory burdens on companies.

Ilham Kadri, vice-chair of the ERT, emphasized that fully implementing Draghi’s proposals would be transformative, creating a more attractive environment for investment in Europe.

Concerns about the EU economy persist, driven by high energy costs, subdued investment, and weak demand both domestically and internationally. The European Commission’s latest projections indicate that the EU’s GDP is expected to grow by just 0.9% this year, significantly lagging behind the U.S. growth rate.

In a bid to address these challenges, European Commission President Ursula von der Leyen announced that her administration’s “first major initiative” would be the launch of a “competitiveness compass.” This framework will be built around Draghi’s pillars of innovation, decarbonization, and security.

Speaking before the European Parliament’s vote to confirm her new team of commissioners, von der Leyen reiterated the need for a more business-friendly environment and greater market integration. She stressed the importance of simplifying cross-border business operations to unlock the full potential of the single market.

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