The European economy’s robust performance over the past year is set to continue in 2018 and 2019 with growth of 2.3% and 2.0% respectively in both the euro area and EU, according to the interim economic forecast issued on 7 February. Growth rates for the euro area and the EU beat expectations last year as the transition from economic recovery to expansion continues. The euro area and EU economies are both estimated to have grown by 2.4% in 2017, the fastest pace in a decade. The growth forecasts for 2018 and 2019 have also been raised for both the euro area and EU: from 2.1% to 2.3% for this year and from 1.9% to 2.0% for 2019. This is a result of both stronger cyclical momentum in Europe, where labour markets continue to improve and economic sentiment is particularly high, and a stronger than expected pick-up in global economic activity and trade. Strong demand, high capacity utilisation and supportive financing conditions are set to favour investment over the forecast horizon. Meanwhile, core inflation is expected to stay subdued as labour market slack recedes only slowly and wage pressures remain contained. Risks to this growth forecast remain broadly balanced, with upside risks in the short term.

"Europe's economy has entered 2018 in robust health. The euro area is enjoying growth rates not seen since before the financial crisis."

The European Fund for Strategic Investments (EFSI) – the central pillar of the Investment Plan for Europe – is already expected to trigger EUR 264.3 billion in investments, following the latest transactions to be approved by the European Investment Bank (EIB) Board of Directors. This represents around 84% of the current target which is to mobilise EUR 315 billion in investment by summer 2018. The deals which will benefit from the EU budget guarantee now amount to EUR 53.2 billion in financing and are located in all 28 Member States. Around 589,000 SMEs are expected to benefit from improved access to financing. In other investment plan news, on 5 February the European Investment Fund (EIF) and Mutualité de Cautionnement (MC) signed the first COSME agreement for SMEs in Luxembourg. The agreement will allow MC to provide guarantees supporting more than EUR 20 million in loans to SMEs. On 30 January, the EIF also signed a second agreement with Microfinance Ireland to support 2,100 micro-entrepreneurs through an additional EUR 30 million in loans under the European Commission's EU Programme for Employment and Social Innovation (EaSI).

The Commission welcomed the final report by its High-Level Expert Group on Sustainable Finance (HLEG), which was published on 31 January and sets out strategic recommendations for a financial system that supports sustainable investments. The Commission will now move to finalise its strategy on sustainable finance on the basis of these recommendations. Delivering an EU strategy on sustainable finance is a priority action of the Commission's Capital Markets Union (CMU) Action Plan, as well as one of the key steps towards implementing the historic Paris Agreement and the EU's Agenda for sustainable development. To achieve the EU’s 2030 targets agreed in Paris, including a 40% cut in greenhouse gas emissions, Europe needs around EUR 180 billion in additional investments a year. The financial sector has a key role to play in reaching those goals, as large amounts of private capital could be mobilised towards such sustainable investments. The Commission is determined to lead the global work in this area and help sustainability-conscious investors to choose suitable projects and companies.

Seasonally adjusted GDP rose by 0.6% in both the euro area and the EU during the fourth quarter of 2017, compared with the previous quarter, according to a flash estimate published by Eurostat, the EU statistical office. In the third quarter of 2017, GDP grew by 0.7% in both zones. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 2.7% in the euro area and by 2.6% in the EU in the fourth quarter of 2017, after +2.8% in both zones in the previous quarter. Over the whole year 2017, GDP grew by 2.5% in both zones.

The Commission has launched the EU Blockchain Observatory and Forum with the support of the European Parliament, represented by Jakob von Weizsäcker responsible for the recent report on virtual currencies. The initiative announced on 1 February will highlight key developments in blockchain technology, promote European actors and reinforce European engagement with the stakeholders involved in blockchain activities. Blockchain technologies, which store blocks of information that are distributed across the network, are seen as a major breakthrough, as they bring about high levels of traceability and security in economic transactions online. They are expected to impact digital services and transform business models in a wide range of areas, such as healthcare, insurance, finance, energy, logistics, intellectual property rights management or government services. With this initiative, the Commission wants to build on the existing initiatives, ensure that they can work across borders, consolidate expertise and address the challenges created by the new paradigms enabled by blockchain (such as disintermediation, trust, security and traceability by design).