European Commission President Jean-Claude Juncker delivered his 2017 State of the Union Address before the Members of the European Parliament in Strasbourg on 13 September. President Juncker presented his priorities for the year ahead and outlined his vision for how the EU could evolve by 2025 (see full speech). He presented a Roadmap for a More United, Stronger and More Democratic Union (see Roadmap Factsheet). The speech was accompanied by the adoption of concrete initiatives by the European Commission on trade, investment screening, cybersecurity, industry, data and democracy, putting words immediately into action. A series of factsheets published on the same day expand on some of the key elements touched upon in the President's speech. President Juncker noted that five years into the economic recovery, the vastly improved economic outlook was due in part to initiatives such as the European Investment Plan which has triggered EUR 225 billion worth of investment so far, as well as the intelligent application of the Stability and Growth Pact which has brought public deficits down from 6.6% to 1.6%. Looking forward, he said that the European Stabilisation Mechanism should progressively graduate into a European Monetary Fund; that the euro should be the single currency of the EU as a whole; and that a new position, European Minister of Economy and Finance, should be created to promote and support structural reforms in Member States.

“The wind is back in Europe's sails. But we will go nowhere unless we catch that wind. (…) We should chart the direction for the future. As Mark Twain wrote, years from now we will be more disappointed by the things we did not do, than by the ones we did. Now is the time to build a more united, stronger and more democratic Europe for 2025.”

One year after President Juncker announced the proposal in his State of the Union speech, the European Parliament and Member States have come to an agreement in principle on the extension and strengthening of the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe. The agreement reached on 13 September extends the EFSI's duration to 2020 and increases the target of investment to be triggered from EUR 315 billion to at least half a trillion euros by 2020. In other Investment Plan news, on 11 September, Portugal’s Nova School of Business and Economics received EUR 16 million in financial support from the European Investment Bank (EIB) to design and construct a new campus while on 8 September the EIB announced that it would finance innovative medical research with a EUR 75 million loan to Evotec. The investment is the first large equity-type investment under EFSI in any industry anywhere in Europe. It follows on the heels of EIB financing of EUR 25 million to Austrian biotech company Apeiron Biologics AG and EUR 35 million to German medical device company MagForce, as well as a loan of EUR 29 million to support the Ca' Foncello Hospital in Treviso. Meanwhile, the European Investment Fund (EIF) is investing EUR 20 million in ACT Venture Capital’s latest fund in Ireland. The EU is also providing almost EUR 1 billion, including a EUR 250 million EIB loan, to Poland to invest in energy networks and scientific research, while the EIF and Bank Gospodarstwa Krajowego (BGK) are doubling the size of their loans to Polish SMEs from PLN 1 billion to PLN 2 billion (approx. EUR 500 million).

The global financial crisis began 10 years ago and led to the EU’s worst recession in its six-decade history. The crisis did not start in Europe but EU institutions and Member States needed to act resolutely to counter its impact and address the shortcomings of the initial set-up of the Economic and Monetary Union. Decisive action has paid off: today, the EU economy is expanding for the fifth year in a row; unemployment is at its lowest since 2008; banks are stronger; investment is picking up; and public finances are in better shape. Recent economic developments are encouraging but a lot remains to be done to overcome the legacy of the crisis years. As robust as it is today, the EMU remains incomplete and the journey of the euro has just started. The Commission is fully mobilised to deliver on its agenda for jobs, growth and social fairness, drawing the lessons from the crisis and preparing the EU even better for future challenges. 

The Economic Sentiment Indicator (ESI) for the euro area rose again in August, increasing slightly by 0.6 points to 111.9, its highest level in more than 10 years. The indicator for the EU remained broadly stable (-0.3 points to 111.9), just below its 10-year high of July. The figures were released on 30 August by Eurostat, the EU statistical office. The increase of the ESI in the euro area resulted from improved confidence in industry and services, partly offset by marked decreases registered in the retail trade and construction sectors, while confidence among consumers remained broadly unchanged. The ESI increased in three of the five largest euro-area economies, namely in Italy (+3.6), France (+1.7) and Spain (+1.4), while it eased in Germany (-0.6) and the Netherlands (-0.9). The slight downward correction of the ESI in the EU (-0.3) was mainly due to worsening sentiment in the largest non-euro area EU economy, the UK (-3.6); sentiment in Poland remained broadly unchanged (-0.2). In August 2017, the Business Climate Indicator (BCI) for the euro area increased slightly (+0.05 points to +1.09). Managers' production expectations increased markedly. To a lesser extent, also their appraisals of the stocks of finished products and past production improved. By contrast, managers' views on overall order books and, in particular, export order books deteriorated.

On 1 September, the Association Agreement between the EU and Ukraine entered fully into force. The Association Agreement, including its Deep and Comprehensive Free Trade Area (DCFTA), is the main tool for bringing Ukraine and the EU closer together; it promotes deeper political ties and stronger economic links, as well as respect for common European values. The DCFTA provides a framework for modernising Ukraine's trade relations and economic development by opening up markets and harmonising laws, standards and regulations with EU and international norms. Under the Association Agreement, Ukraine has committed to structural reforms in the areas of democracy, human rights, rule of law, good governance, trade and sustainable development. The entry into force of the agreement will give a new impetus to the cooperation in areas such as foreign and security policy, justice, taxation, public finance management, science and technology, education and digital technology.

Seasonally adjusted GDP rose by 0.6% in the euro area and by 0.7% in the EU during the second quarter of 2017, compared with the previous quarter, according to an estimate published by Eurostat, the EU statistical office. In the first quarter of 2017, GDP grew by 0.5% in both areas. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 2.3% in the euro area and by 2.4% in the EU in the second quarter of 2017, after +2.0% and +2.1% respectively in the previous quarter.