Today the Eurogroup in inclusive format adopted a statement on the competitiveness of the European economy.
Significant shifts in the geopolitical landscape, fragmentation in global trade flows, rapid technological advancements, climate change and the energy crisis are converging to create a highly complex and dynamic global environment. The fallout from Russia’s unprovoked war of aggression against Ukraine has created further challenges. The European economy has been particularly hit by the resulting shockwaves that have dampened growth, increased inflation, tightened financial conditions and worsened supply bottlenecks amid recovery from the Covid-19 pandemic. At the same time, Europe’s long-standing challenges, compounding low growth, stagnating productivity, insufficient innovation performance and demographic challenges remain unresolved. In this context, it is imperative and urgent to address the lagging performance of the European economy by increasing its productive capacity and enhancing its competitiveness through ambitious investment and well-calibrated structural reforms.
In November 2023, the Eurogroup in inclusive format launched a series of discussions on our competitiveness challenges and has drawn valuable policy insights, supported by inputs from the Institutions and distinguished external contributors. We considered the new European Competitiveness Deal agreed by the European Council on 17-18 April 2024, alongside the conclusions of Enrico Letta’s ‘Much more than a market’ high-level report and Mario Draghi’s report on ‘The Future of European competitiveness’. Our discussions covered key issues, including energy price trends, trade fragmentation, the European Union (EU)’s innovation and productivity gap and the role of industrial policy, as well as the funding gap to finance EU strategic investments. From these discussions, we have converged on a set of policy priorities and actions to meet these emerging and persistent challenges.
Addressing the EU’s innovation and productivity challenges to boost growth
Productivity growth is at the heart of income growth and prosperity. However, over the years, the productivity gap has widened between the EU and its trading partners, such as the United States of America (US), while emerging economies like China continue to increase competitive pressure. In response, we see it as a priority to address Europe’s underperformance in productivity by facilitating conditions for European businesses to invest and innovate. The EU productivity gap stems from a lagging innovation ecosystem, which has led to the EU falling behind in high-value-added sectors, particularly in information and communication technology and digital industries. We agree that it has become urgent to stimulate investment in research and development (R&D), particularly by a market-based approach to facilitating private sector spending through enhanced framework conditions for investment, structural reforms and by improving coordination of public funding, including at the EU level. Mobilising venture capital – particularly for start-ups and scale-ups – through deep, well-functioning and integrated European capital markets is key to channelling savings and risk capital, both from inside and outside the EU. This will more effectively allow European innovative companies to scale up and drive long-term growth and ultimately help the EU become a global leader in innovation.
Enhancing human capital is essential, particularly in light of the recent decline in student performance compared to global competitors. Education and training systems must better address skill mismatches and shortages by improving upskilling and reskilling schemes, supported by greater labour market flexibility, greater labour mobility within the EU and policies that attract and retain talent to ensure an adequate provision of human capital required to strengthen the EU’s innovation potential. Increasing labour market participation, in particular that of under-represented groups, as well as attracting talent from abroad, are also crucial to mitigate the consequences of population ageing.
Reducing the cost of energy and building EU energy resilience through coordination and integration
The energy price shock has demonstrated the extent to which our economies are reliant on affordable energy, while the coordinated EU response has highlighted the benefits of common action at EU level. The deployment of energy efficient, net-zero and low-carbon solutions will be needed. We recognise that a well-planned green transition and energy security are not only complementary imperatives, but can also present our economies with significant opportunities to achieve both our competitiveness and decarbonisation objectives by leveraging inexpensive, sustainable energy and reduce dependence on external sources. The transition towards renewable sources of energy, like wind and solar energy is well underway, but the intermittent nature of these sources requires a broad range of responses, including investments in demand flexibility, storage and energy infrastructure. Insufficient interconnections and grid capacity, compounded by the inefficient use of existing grids, impede the stabilisation of local fluctuations and fragmented national strategies risk leading to inefficient investments, high costs for taxpayers and consumers, and volatile electricity prices.
We agree that to address these challenges an EU-wide strategy to complement and bring together national strategies would be essential for effective electrification and the green transition. In particular, better and cost-effective grid interconnections, in particular cross-border, are crucial for connecting producers and consumers across wide geographic areas. An integrated and flexible European electricity market, connecting the renewable potential to areas of high demand within the Union, will lead to lower and more stable prices, attract private investment, reduce the need for storage and public subsidies for energy production, including renewable energy production, and strengthen our energy security. This, in turn, would lower fiscal pressures by reducing the need for energy subsidies and support economic growth by lowering costs for businesses and households. Well-functioning European energy infrastructure is of European common interest and vital for the EU’s competitiveness.
Strengthening EU economic security in a fragmenting global trade environment
The fragmenting global environment highlights both the importance and the fragility of open international trade, requiring us to be clear-eyed about implications for our economic security. The EU and its Member States have greatly benefited from free trade and should seek to continue doing so. It is in our interest to support an open and sustainable rules-based multilateral trading system, with the World Trade Organisation (WTO) at its core ensuring a global level playing field. Yet, the rules-based system has been increasingly undermined by distortive practices by some trading partners. This calls for strengthening our economic resilience and pursuing a more strategic approach to ensure the EU remains competitive in global markets while upholding fair trade practices. To this end, reinforcing international partnerships, diversifying and maintaining secure and resilient supply chains and proactively identifying risks of dependencies in strategic sectors are essential to safeguard our economic security in an increasingly complex global landscape and mitigate risks of external shocks and associated job losses.
Revitalising the Single Market to preserve European prosperity 
We reaffirm the importance of the Single Market as a pillar of European prosperity and cohesion, emphasising the need to extend, deepen and revitalise it, including by pursuing ambitious structural reforms, while ensuring a level playing field. We therefore look forward to the presentation of the Commission’s new horizontal strategy for the Single Market. Further facilitating the cross-border provision of services, including financial services and services essential for the green transition, opens opportunities for further modernisation and deepening of the Single Market. Moreover, further market integration and leveraging the Single Market are essential for businesses to grow and develop economies of scale necessary to build capacities, in particular in strategic sectors, and compete successfully on the global stage.
Predictable, competitive and fair framework conditions for businesses are necessary, as well as reducing entry barriers. At the same time, the growing regulatory burden is becoming an increasingly important obstacle for companies, in particular smaller businesses, to innovate, scale up and grow. We must reform and intensify efforts to improve the quality of regulation and effectively reduce administrative burdens.
The resurgence of industrial policy around the world in recent years is characteristic of a global trend towards securing technological leadership, decarbonising the economy, and reducing dependencies in a context of increased geopolitical tensions. We concur that widespread use of industrial policies, particularly at the national level, should be avoided as it risks undermining the Single Market. We agree that in specific cases industrial policy can address market failures and enhance our resilience and open strategic autonomy. However, it must be carefully designed, coupled with appropriate framework conditions for businesses and properly implemented to avoid risks such as rent-seeking, resource misallocation and trade distortions. Moreover, industrial policies should be limited in scope, future-oriented, aimed at creating a favourable business environment to boost investment and focused on technologies and sectors rather than individual companies. An effective enforcement of EU State aid rules should be maintained to guarantee an effective level playing field.
Coordinating investment strategies to finance EU priorities 
We acknowledge the significant financing needs associated with the green and digital transitions, new defence priorities and R&D. At a time when public finances have been affected by multiple crises and gradual and sustained fiscal consolidation is needed, the necessary investment should come primarily from private sources. Deepening the Capital Markets Union (CMU) is urgent and essential for enhancing financial integration and facilitating the mobilisation of private funds across the EU. We reiterate our commitment to deliver on the priority measures identified in our statement on the future of Capital Markets Union of 11 March 2024 to provide deep, well-functioning and integrated European capital markets for the benefit of consumers and business. Reducing fragmentation and regulatory barriers in access to finance remains crucial and we look forward for the new Commission presenting ambitious proposals in this regard. We are also committed to completing the Banking Union as outlined in our statement on the future of the Banking Union of 16 June 2022.
We recognise the need for synergies between public and private funding. Public funds are scarce and best used as a catalyst for leveraging private capital in areas with positive spillovers. In this context, effective ways to catalyse and leverage private capital should be explored at the national and European level, including through the involvement of the European Investment Bank (EIB), in line with its statutory framework. While private investment is vital, public financing also has an important role to play. European financing should focus on areas where public goods can be more effectively delivered jointly.
We are committed to addressing these challenges and to take action without delay to ensure a coherent European strategy for competitiveness across key policy areas. We will continue to coordinate and work collaboratively to undertake structural reforms and investments to enhance the competitiveness and resilience of the European economy in the face of ongoing global transformations, while maintaining economic, social and territorial cohesion. Our ability to invest, to innovate, to adapt, to reskill and upskill, to support a competitive private sector and to maintain sustainable public finances will not only shape our capacity to support European living standards, but also contribute to the resilience of the European economy. We will collaborate closely with the Institutions in implementing the policy priorities set out above and will regularly monitor the competitiveness of the European economy.
 
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The Commission welcomes today’s general approach announced by the Council on  the Commission’s proposals on VAT in the Digital Age. By embracing and promoting digitalisation, this package makes the EU’s VAT system more business-friendly and more resilient to fraud. The new rules also mark the first step to address the challenges raised by the development of the platform economy and helps level the playing field between online and traditional short-term accommodation and transport services.
This package introduces 3 measures:

The new system introduces uniform real-time digital reporting for VAT purposes based on e-invoicing for cross-border transactions, which will provide Member States timely with the valuable information they need to step up the fight against VAT fraud. E-invoicing will furthermore accelerate business transformation in the digital age by streamlining operations, ensuring compliance and security, enabling data-driven decision-making, and supporting scalability for future growth and innovation.
Moreover, platform economy operators in the passenger transport and short-term accommodation rental sectors will become responsible for collecting and remitting VAT to tax authorities, where the underlying supplier does not charge VAT. This measure will contribute to a better level playing field between online and traditional services and will make life easier for the underlying hosts and drivers, who will not be liable for the VAT.
Finally, this initiative will further reduce the need for multiple VAT registrations in different Member States, expanding the already existing ‘VAT One Stop Shop’ model for shopping-commerce companies.

Next steps
EU Finance Ministers are expected to adopt the proposal following a re-consultation with the European Parliament.
Background
VAT is one of the most important revenue streams for Member State authorities. However, according to the latest VAT GAP Report 2023, Member States lost around €61 billion in VAT revenues in 2021. To address these losses and respond to the increasing digitisation of the economy, in December 2022 the Commission proposed to modernise VAT obligations by promoting the digital transition. This legislative package was announced in the 2020 Action Plan for fair and simple taxation supporting the recovery strategy.
 
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The U.S. Commerce Department’s Bureau of Economic Analysis (BEA) reported last week that real gross domestic product (GDP) increased at an annual rate of 2.8 percent in the third quarter of 2024. Growth was in large part due to Americans making and spending more. Consumer spending increased 3.7%, the most since early 2023, thanks to rising incomes.
The economy has grown 12.6% under the Biden-Harris Administration, with the lowest average unemployment of any Administration in 50 years, and 16 million jobs created. This demonstrates stronger economic growth than during any other presidential term this century.
The U.S. economy grew 2.7 percent in the third quarter of 2024, compared to the same quarter a year ago. The increase in September’s current-dollar personal income primarily reflected an increase in compensation. The increase in real GDP for the third quarter of 2024 primarily reflected increases in consumer spending.
In addition, investments in manufacturing continue to boom. During the first nine months of this year, construction spending amounted to $1,621.4 billion, 7.3 percent above the $1,511.4 billion for the same period in 2023, according to the latest estimates from the US. Census Bureau. Driven by the building of houses and factories, annual manufacturing construction spending is a large contributor to GDP.
For more information, see our latest blog, Manufacturing Booms Thanks to Biden-Harris Administration Investments.
By the Numbers is a blog series that showcases the Commerce Department’s economic indicators and how they impact the American economy.
 
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Today, the Council approved conclusions on a European Court of Auditors’ (ECA) report aiming to strengthen EU’s AI ambitions, notably by enhancing governance and ensuring an increased, more focused investment when moving forward in this field.
The Council agrees with the Court’s conclusion that the EU must scale up investments in AI and facilitate access to digital infrastructure to be a globally competitive actor with a global impact, assume leadership in the development and deployment of AI, foster talent and create an ecosystem of excellence and trust.
Moreover, the Council underlines that the environmental impact of AI systems, high-performance computing, and possible solutions to increase energy efficiency, as well as securing a reliable hardware supply chain, are important factors, which should be also taken into account in AI policies.
The Council also agrees with the Court that close cooperation and collaboration with member states and international organisations, with a view to maximising the impact of investments at EU and national levels, while capitalizing on synergies, is a key element to ensure EU’s global leadership in AI and its positioning as a reference point for AI governance. In this regard, the Council invites the Commission to intensify the regular information sharing towards the Council and its relevant preparatory bodies to support the EU’s strategic engagement in international fora and cooperation with partners.
Finally, understanding that AI can boost European competitiveness if the results of R&I projects are commercialised or exploited directly or indirectly, the Council agrees with the Court about the need for measurable performance targets and indicators. The Council adds, however, that such indicators should be designed carefully without hindrance to the overall objective of the projects, in a way that would not add additional burdens to the beneficiaries, the member states, and implementing entities.
Background information
On 29 May 2024, ECA published its special report titled ‘EU artificial intelligence ambition – Stronger governance and increased, more focused investment essential going forward’, which provides an in-depth assessment of the effectiveness of several Commission actions between 2018 and 2023, including AI research and innovation support policies (2018-2022), and regulatory initiatives (2023). ECA underlines that the EU framework for coordinating and regulating EU investment in AI is a work in progress, whereas the Commission’s coordination and evaluation with the member states had limited effects. ECA also notes that the implementation of the envisaged enablers for AI innovation is ongoing and that, even if the Commission boosted the funding of research and innovation (R&I) in AI, such financial support lacks an effective framework for performance monitoring.
 
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By Piero Cipollone | As they juggle various cards, apps and devices, most Europeans find that digital payments have fallen short of their promise to provide a convenient euro area-wide solution. The ECB’s Piero Cipollone explains how a digital euro would blend the simplicity of cash with digital convenience.
Twenty-five years ago, the introduction of the euro transformed Europe. For the first time, people in different countries were using the same banknotes and coins. Who would have thought that the contents of our wallets could connect us all?
Since then, euro banknotes have simplified life for European families, merchants and travellers alike. No more additional fees or wondering if your payment method will be accepted. But in today’s digital age, that ease is fading.
Most Europeans now juggle different cards, apps and devices depending on each payment situation, finding that the convenience of digital payments doesn’t always live up to the promise. In the euro area, we are stuck in a fragmented system, where digital payment solutions don’t cover all our needs. While you might easily use a card to pay contactless for a meal or a taxi ride in cities like Madrid or Paris, rural areas in Germany or Austria often only accept cash or local debit cards. Similarly, some mobile apps work well for sending money to family or friends but aren’t accepted for online purchases or by local businesses.
In a nutshell, we still don’t have a digital payment solution that works effectively everywhere in the euro area in all payment situations. What if we could bring back the universal simplicity of cash, while embracing the convenience of the digital age? A digital euro would allow us to reclaim the freedom to pay digitally, seamlessly, anytime and anywhere – including when shopping online.
A digital euro would go hand in hand with banknotes, providing – for free – an all-in-one digital payment option across the euro area. The fragmentation we experience today could become a thing of the past.
You could easily access your digital euro wallet via the digital euro app, your bank’s app or a physical card to make instant payments. Imagine stopping at a café on your way to work and realising you’ve forgotten your wallet or don’t have enough cash. Or perhaps your card isn’t accepted when you go to pay. With a digital euro, you could pay seamlessly for your coffee by card or smartphone in all those situations, because it would be accepted by all European merchants that already accept digital payments. Think of it like a digital banknote. You’d also be able to use it to pay for things in all euro area countries, making travelling even easier.
The same applies to other everyday payments – whether paying for your children’s babysitter, sending money to your daughter studying abroad or shopping online – and potentially new situations. A digital euro could allow you to pay on delivery, for example, or when/if a train has arrived on time.
A digital euro would also address any concerns about resilience and privacy: using the offline function, you’d even be able to pay without an internet connection. The offline digital euro would provide a robust backup in critical situations like internet outages or in remote locations with limited connectivity, ensuring that your payments are uninterrupted and making our payments system more resilient. Moreover, when using the offline solution, personal transaction details would remain private – they’d only be known to you and the payment recipient, much like a cash payment.
So, what’s in it for you? Pending a final decision on whether to issue a digital euro, which will only be taken by the European Central Bank once European legislators have defined its legal framework, the project promises greater freedom and convenience. You’d be able to make instant payments anytime and anywhere in the euro area, with a single, free solution backed by the highest security and privacy standards.
This is the logical next step for our single currency. It’s time we had a digital euro to complement banknotes and simplify our lives, making our payments sector more cohesive, competitive, innovative and resilient.
I think – and I hope you agree – that’s something worth considering.
This article was published as an opinion piece in media outlets across the euro area.
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Delivers on Governor Hochul’s 2024 State of the State Initiatives To Help Small, Rural and Disadvantaged Communities With Their Water Infrastructure Needs
Funding Awarded Across New York State in All 10 Economic Development Regions
Enhanced Awards for 32 Projects in Small, Rural Communities

Governor Kathy Hochul today announced that more than $435 million is being awarded to 102 critical water infrastructure projects across New York State through the Water Infrastructure Improvement and Intermunicipal Grant programs. The grants awarded by the New York State Environmental Facilities Corporation (EFC) deliver on Governor Kathy Hochul’s 2024 State of the State to help small, rural and disadvantaged communities with their water infrastructure needs. With critical financial support for local governments across New York, Governor Hochul is laying the foundation for a healthier, more resilient future, ensuring every New Yorker has access to safe and clean water, while creating jobs and boosting the economy.
“New York is committed to funding water infrastructure upgrades because every person has a right to clean water,”  Governor Hochul said.  “With this funding for communities across the State, we are providing critical resources to local economies, creating jobs and safeguarding the health and well-being of all New Yorkers.”
The  complete list of WIIA and IMG awardees, including an interactive map and projects by region, is available on EFC’s website.
These grants will support water infrastructure projects totaling more than $1 billion that safeguard drinking water from the risk of toxic chemicals, upgrade and replace water and wastewater infrastructure in a manner that will increase community resilience, regionalize water systems, support local economies, and are critical to protecting public health and the environment. The ratepayers are projected to save an estimated $1 billion in costs the communities would have incurred if they had financed the projects on their own.
Environmental Facilities Corporation President & CEO Maureen A. Coleman said,  ”EFC’s grants are a hallmark of New York State’s robust, nation-leading investment in the environment, which will help municipalities affordably invest in water infrastructure improvement projects. These grants will help get shovels in the ground for 102 water quality projects across New York State. EFC is committed to awarding grant funding to the communities that need it most, as demonstrated by the dedicated work of our Community Assistance Teams and the award of enhanced grants totaling $126.7 million amount to small, rural and disadvantaged communities.”
This round of WIIA/IMG boasts improvements announced as part of Governor Hochul’s 2024 State of the State to maximize benefits for rural and disadvantaged communities.
Enhanced Awards for 32 Projects in Small, Rural Communities
Even with extensive financial support from the State, some municipalities are left passing a large financial burden to their ratepayers. To alleviate this burden on small, rural and disadvantaged communities, Governor Hochul directed EFC to increase grants for small, rural communities from 25 percent to 50 percent of net eligible project costs. Examples of enhanced awards include:

Town of Peru (North Country) is awarded $11 million for upgrades to the Town of Peru Water Pollution Control Plant (WPCP), with a focus on effluent disinfection.

Saint Regis Mohawk Tribe is awarded $9.8 million for upgrades to the wastewater treatment plant.

Village of Richfield Springs (Mohawk Valley)  is awarded $9.1 million for improvements to the wastewater treatment plant and sewer rehabilitation.

Town of Ellicott (Western NY)  is awarded $3.2 million for the expansion of sewer service in the area around Fluvanna Avenue.

EFC’s Community Assistance Teams Helped Municipalities Secure Grants
Small, rural and disadvantaged communities are particularly impacted by deteriorating water infrastructure and emerging contaminants and often do not possess the resources and capacity necessary to advance a project for infrastructure improvement. Governor Hochul expanded EFC’s  Community Assistance Teams program that launched in 2023 to provide essential support for updating New York’s critical water infrastructure. Thirteen municipalities that worked with EFC through this critical initiative received grants, four of which are receiving enhanced awards:

Town of Mina (Western NY) is awarded $13 million for the construction of a new sanitary sewer collection system around Findley Lake and a new wastewater treatment plant to treat sewage from the new system.

Town of Potsdam (North Country) is awarded $1.4 million for the construction of a new sewer district.

Village of Parish (Central NY) is awarded $1 million for wastewater treatment plant improvements.

Town of Wilna (North Country) is awarded $154,527 for wastewater treatment facility upgrades.

Awards Totaling $66 million To Protect Drinking Water From Emerging Contaminants
Continuing New York’s national leadership on addressing the threat of PFAS, Governor Hochul increased awards for emerging contaminant projects from 60 percent to 70 percent of net eligible project costs. This change will help ensure cost is not a barrier for communities working to make life-saving investments that eliminate risks to their drinking water supplies. Examples of emerging contaminants projects include:

Village of Hempstead (Long Island)  is awarded $37 million for water treatment improvements to remove 1,4 Dioxane and PFAS.

Town of North Salem (Mid-Hudson)  is awarded $592,074 for the Pabst Water System PFOS Mitigation project.

Dutchess County Water & Wastewater Authority (Mid-Hudson)  is awarded $15 million for water system interconnection to remedy PFAS-Contaminated source water.

Suffolk County Water Authority (Long Island)  is awarded a total of $4.9 million for four projects using advanced oxidation to remove 1,4-dioxane from groundwater.

EFC administers the WIIA and IMG programs in coordination with the Department of Health (DOH). The State has awarded more than $2.9 billion in water infrastructure grants through EFC since 2015.
Department of Environmental Conservation Interim Commissioner Sean Mahar said, “Under Governor Hochul’s leadership, New York State continues to prioritize investments in clean water for communities statewide. Today’s award of $435 million will support more than 100 water projects across the State to protect public health and the environment. The investments, bolstered by EFC’s assistance to rural, smaller and disadvantaged communities, are advancing effective water infrastructure improvements that will benefit New Yorkers.”
State Commissioner of Health Dr. James McDonald said, “Governor Hochul is ensuring that New Yorkers throughout the State have access to clean drinking water, the foundation to good health. The financial support in this latest announcement will help municipalities make critical upgrades to their water systems, something they might not be able to afford on their own, and thus help to achieve greater health equity in our great state. New York State will continue to work with communities to ensure their water is safe to drink today and into the future.”
Secretary of State Walter T. Mosley said, “Clean water infrastructure is vital to public health and New York State is making a historic economic commitment for communities to address drinking water infrastructure needs. We thank Governor Hochul for her assistance of $435 million that will open doors for small, rural and disadvantaged communities to have an infusion of funds to get shovels in the ground to help create environmentally sound cities and towns for present and future generations.”
Majority Leader Andrea Stewart-Cousins said, “This $435 million in State grants represents a transformative investment in strengthening our water infrastructure, particularly in small, rural and disadvantaged communities. I am proud to have worked with Governor Hochul, Members of the Senate Majority and our partners in the Assembly, to secure this essential funding, which includes the $4.2 billion Clean Water, Clean Air and Green Jobs Environmental Bond Act of 2022, and $500 million for clean water infrastructure allocated in the 2024-2025 Budget. By making this investment in our small, rural and disadvantaged communities, we are not only empowering them to upgrade their infrastructure, but also improving public health, saving ratepayers money, building climate resilience and strengthening our economy.”
State Senator Pete Harckham said, “This major investment from the State ensures public health standards while supporting local businesses. Maintaining safe, accessible drinking water sources and supply systems is integral to future growth and prosperity, and I thank Governor Hochul, my colleagues in the State Legislature and the New York State Environmental Facilities Corporation for making the financial commitment to see this through.”
Assemblymember Deborah J. Glick said, “Water infrastructure improvements are a crucial component of protecting the health of New Yorkers and the environment. With the continued threats posed by PFAS and other chemical contamination, the use of lead service lines and increasingly destructive storms and flooding, we must remain focused on funding projects such as these around the State. I thank Governor Hochul and EFC for prioritizing water infrastructure improvement and look forward to working together to secure more funding next year to continue this critical work.”
New York League of Conservation Voters President Julie Tighe said, “Water is our most precious resource and investing in clean water infrastructure is absolutely critical for the health of all New Yorkers. We congratulate all of the water infrastructure awardees and commend Governor Hochul for her ongoing commitment to clean water and public health.”
The Nature Conservancy’s New York Policy and Strategy Director Jessica Ottney Mahar said, “The Nature Conservancy commends Governor Hochul for dedicating significant resources to protect clean drinking water and update critical infrastructure. State funding enables New York communities to protect public health, improve quality of life and strengthen local economies. The need for clean water is universal; every person, every animal, every community depends on it, which is why public investments like this are essential.”
Citizens Campaign for the Environment Executive Director Adrienne Esposito said, “Filtering out toxic PFAS and 1,4 Dioxane chemicals is one of the few things that everyone can enthusiastically support this year. These grants mean our drinking water will be safer, cleaner and more reliable, and that is why the public strongly supports clean water funding. Thank you to Governor Hochul for dispersing clean water funding in a timely and strategic way that protects public health and our environment.”
Environmental Advocates NY Senior Director of Clean Water Rob Hayes said, “We applaud Governor Hochul for delivering a transformative round of water infrastructure funding. These grants are a win-win for our economy and environment, protecting clean water and creating thousands of good-paying union jobs. We are especially thankful for increased funding to help communities remove toxic PFAS from drinking water, protecting public health. With this funding, the Governor is demonstrating her commitment to helping communities across the State be stronger, healthier and more affordable.”
New York’s Commitment to Water Quality
New York State continues to increase its nation-leading investments in water infrastructure, including more than $2.2 billion in financial assistance from EFC for local water infrastructure projects in State Fiscal Year 2024 alone. With $500 million allocated for clean water infrastructure in the FY25 Enacted Budget announced by Governor Hochul, New York will have invested a total of $5.5 billion in water infrastructure between 2017 and this year. Governor Hochul’s State of the State initiatives are ensuring ongoing coordination with local governments and helping communities to leverage these investments. The Governor increased WIIA grants for wastewater projects from 25 to 50 percent of net eligible project costs for smaller, disadvantaged communities. The Governor also expanded EFC’s Community Assistance Teams to help small, rural and disadvantaged communities leverage this funding and address their clean water infrastructure needs. Any community needing assistance with water infrastructure projects is encouraged to  contact EFC.

 
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Executive Summary:
Commodity prices are expected to decrease by 5 percent in 2025 and 2 percent in 2026, after softening 3 percent this year. This would lead aggregate commodity prices to their lowest levels since 2020. The projected declines are led by oil prices but tempered by price increases for natural gas and a stable outlook for metals and agricultural raw materials. The Brent crude oil price is projected to average $80/bbl in 2024, before slipping to $73/bbl in 2025 and $72/bbl in 2026. Thus, from their 2022 high, annual average oil prices are expected to decline for four consecutive years through to 2026, settling just slightly above their 2021 level. The possibility of escalating conflict in the Middle East represents a substantial near-term upside risk to energy prices, with potential knock-on consequences for other commodities. However, over the forecast horizon, longer-term dynamics—including decelerating global oil demand, notably in China; diversifying oil production; and ample oil supply capacity held by OPEC+—suggest sizable downside risks to oil prices, especially if OPEC+ unwinds its latest production cuts. There are also two-sided risks to industrial commodity demand stemming from economic activity. On the one hand, concerted stimulus in China and above-trend growth in the United States could push commodity prices higher. On the other, weaker-than-anticipated global industrial activity could dampen them.
Read full post here.
 
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Prepared by Adrian Page | Published as part of the ECB Economic Bulletin, Issue 7/2024.
In the post-pandemic period, Eurosystem/ECB staff projections for growth have performed well over short horizons, despite the large shocks that have occurred. While the performance of inflation projections since the start of the pandemic has been extensively documented in previous issues of the Economic Bulletin, this box looks at how the Eurosystem/ECB staff projections for real GDP growth have fared during this turbulent period.[1] The growth fluctuations in 2020 related to the initial phases of the pandemic could not have been predicted, resulting in historically high forecast errors.[2] This box therefore focuses on the performance of the projections made after the start of the pandemic. During this period, the near-term growth forecasts have been remarkably accurate (Chart A, panel a). With only some exceptions during 2021, when growth continued to be affected by the pandemic’s unpredictable path and the associated containment measures, errors in next-quarter projections for real GDP growth have been even smaller than usual despite large shocks, including those caused by supply chain disruptions and Russia’s war in Ukraine.
However, over one-year horizons, staff projections overestimated growth from mid-2022 onwards. Looking at a longer horizon, the one-year-ahead projections for annual GDP growth have been less accurate and, on several occasions – in 2022 and the first half of 2023, in particular – the absolute projection errors were bigger than the average absolute historical errors over that horizon (Chart A, panel b).[3] The projections between mid-2022 and mid-2023 overestimated growth but underestimated inflation. This is consistent with the fact that the largest shocks during that period related to supply chain bottlenecks and to energy supply shocks caused by the disruptions brought about by Russia’s war in Ukraine. These supply shocks pushed inflation higher while supressing growth. Although the magnitude of the projection errors for growth have diminished over the past year, they have nevertheless remained negative over the one-year horizon, implying a persistent overestimation of the strength of the recovery.

Chart A
Projection errors in real GDP growth since 2021

a) Next quarter ahead

b) One year ahead

(percentage points in quarter-on-quarter growth rates)

(percentage points in year-on-year growth rates)

Sources: Eurosystem/ECB staff projections and ECB staff calculations.
Notes: Error is the outturn (as published by Eurostat on 6 September 2024) minus the projection. “Next quarter ahead” refers to the projection for the quarter-on-quarter rate of change for the quarter after the one in which the respective projection was published (e.g. the error for the second quarter of 2024 in the March 2024 ECB staff macroeconomic projections). “One year ahead” refers to the projection for the annual rate of change for the same quarter in the year following the respective publication (e.g. the error for the second quarter of 2024 in the June 2023 Eurosystem staff macroeconomic projections). Average absolute real GDP errors refer to the period 1999-2019 and exclude outliers during the global financial crisis.

Private consumption and investment have been the main drivers behind one-year-ahead projection errors for most of this period, with net exports and stocks also playing a role more recently. Decomposing the projection errors into the individual demand components of GDP helps explain the source of the errors (Chart B). In 2021, projections made in the course of the previous year (i.e. during the initial phase of the pandemic) were subject to huge uncertainty, resulting in large but partially offsetting errors across the different components. Significant shifts in consumption patterns towards goods during the earlier phases of the pandemic and subsequently back to services led to disruptions in historical economic relationships, thus reducing the predictability of consumption, investment and trade. As the economic impact of the pandemic began to fade, global supply chain disruptions emerged during 2021, followed by Russia’s invasion of Ukraine in early 2022, which disrupted Europe’s energy supply. These shocks pushed up inflation, causing real incomes to fall unexpectedly and private consumption to surprise to the downside up until mid-2023. Since then, private consumption errors have been small, as upside surprises in disposable income have led to higher savings rather than higher consumption. Investment growth has also consistently surprised to the downside throughout the post-pandemic period. This can partly be explained by the high levels of uncertainty, which had been expected to dissipate but which instead persisted in the face of the series of adverse shocks mentioned. Another factor affecting real GDP and several demand components was the ECB’s monetary policy, which was tightened considerably in the face of surging inflation and by more than expected by markets. The contribution of net exports to growth has also tended to surprise to the downside related to a weaker-than-expected recovery in global trade but also to losses in competitiveness, as energy price shocks have been larger in the euro area than for other key trading partners. Over recent quarters, destocking has put an unexpected drag on growth, as reflected in the negative contributions from changes in inventories. The only component to have systematically surprised to the upside over this period is government consumption.[4]

Chart B
Decomposition of one-year-ahead real GDP projection errors into contributions of demand components

(percentage points in the year-on-year rate of change)

Sources: Eurosystem/ECB staff projections and ECB staff calculations.
Notes: See notes to Chart A. In the second quarter of 2024, the large and partially offsetting errors in the net exports and investment components partly relate to volatile and unpredictable developments related to intellectual property products in Ireland.

For most of the post-pandemic period, errors in the conditioning assumptions explain a large part of the projection errors. Another way to view the sources of projection errors is to look at the role of the technical assumptions and the projections for euro area foreign demand, both key inputs in the staff projection models.[5] Chart C decomposes the one-year-ahead GDP errors into the impact of errors in these assumptions and an unexplained residual related to other factors. This impact can be estimated using elasticities derived from Eurosystem staff projection models. The sharp, unexpected increases in oil and particularly gas prices from the second half of 2021 onwards played an important role in explaining downside growth surprises up until the end of 2022. From mid-2022 onwards, the financial assumptions also played some role, particularly the stronger-than-assumed increases in interest rates mentioned above. Errors in the exchange rate assumptions had a small, positive offsetting impact during 2022, switching signs to contribute negatively to growth errors from mid-2023 onwards. Lastly, foreign demand surprised mainly to the upside compared with staff expectations in the first half of the post-pandemic period, before contributing to the over-predictions of growth as of late 2022.

Chart C
Decomposition of one-year-ahead real GDP projection errors: the role of errors in conditioning assumptions

(percentage points in the year-on-year rate of change)

Sources: Eurosystem/ECB staff projections and ECB staff calculations.
Notes: See notes to Chart A. The contribution of errors in conditioning assumptions to the errors for real GDP growth are based on elasticities derived from Eurosystem staff macroeconomic models. Energy commodity prices refer to assumptions for oil and gas prices. Exchange rate refers to the nominal effective exchange rate of the euro. Financial assumptions refer to assumptions for short and long-term interest rates and stock market prices. “Adjusted errors” refers to all other sources of error beyond the errors in the conditioning assumptions mentioned. The dashed lines indicate the average absolute errors in the “Adjusted errors” component over the period 2003 (the earliest date for which the decomposition is available) until 2019, excluding outliers during the global financial crisis.

Adjusting for the errors in conditioning assumptions results in smaller errors, which may relate to persistent uncertainty and a possibly stronger-than-expected impact of monetary policy tightening. The conditioning assumptions are mainly based on market pricing and treated as exogenous to the staff projections for the euro area. Adjusting for errors in these assumptions makes it possible to isolate the remaining part of the overall projection error (shown as grey bars in Chart C), which can be attributed to the models used to build the projections and staff judgement.[6] These adjusted errors were notably smaller for most of the sample period, especially since mid-2023. The dashed lines in Chart C show the historical average of the absolute values for these adjusted errors during non-crisis periods. The adjusted errors (grey bars) are larger than these averages in absolute terms in only four quarters, despite large uncertainty during this period. But which factors could be behind these errors? As mentioned above, one extraordinary factor was large under-predictions of the surge in inflation (which went beyond what could be explained by technical assumptions) and the associated hit on disposable income. The energy price shock also led to persistent and unexpected losses in competitiveness beyond what was captured by the exchange rate assumptions. Geopolitical tensions, especially in Ukraine and more recently in the Middle East, have had a significant impact on uncertainty and confidence. Another factor may relate to the impact of monetary policy. While the green bars in Chart C capture the impact of errors in the financial assumptions based on Eurosystem staff projection models, other models suggest stronger impacts.[7] Moreover, non-linearities in the pass-through related to the exceptional speed and intensity of the monetary policy tightening or to the switch from a “low-for-long” to a high interest rate environment, may have had a stronger impact on the economy than suggested by the usual projection models.
In conclusion, despite the series of large shocks which hit the euro area economy in recent years, staff growth projection errors have been comparable to pre-pandemic averages. However, the outlook remains clouded by considerable uncertainty. Staff are continuously looking at ways to improve their forecasting models and make judgemental adjustments where the models systematically miss the mark. Some of the fruits of these efforts can be seen in the projection errors for near-term growth; these have been smaller than the historical average despite the huge shocks we have witnessed. While projection errors over the one-year-ahead horizon have been persistently negative, much of this can be explained by errors in the conditioning assumptions. The remaining errors likely reflect the significant and persistent changes observed in recent years in key economic relationships. It should be noted that the errors presented in this box refer to projections published up until June 2023. Staff have already taken the negative flow of information since then into account: for example, the growth outlook has been revised down from 1.5% in the June 2023 Eurosystem staff macroeconomic projections, to 0.8% for 2024 as recent information suggests a weaker-than-expected recovery. Nevertheless, economic projections remain clouded by considerable uncertainty. To illustrate the potential impact of the most relevant sources of uncertainty on the projections, the staff projections are usually accompanied by alternative scenarios highlighting key risks as well as more generic uncertainty bands.[8]

See “An update on the accuracy of recent Eurosystem/ECB staff projections for short-term inflation”, Economic Bulletin, Issue 2, ECB, 2024; “What explains recent errors in the inflation projections of Eurosystem and ECB staff?”, Economic Bulletin, Issue 3, ECB, 2022. See also “The empirical performance of ECB/Eurosystem staff inflation projections since 2000”, Economic Bulletin, Issue 5, ECB, 2024.
The projection for the second quarter of 2020 made in the March 2020 ECB staff macroeconomic projections resulted in the largest ever error for this horizon, with widespread COVID-19-related lockdown measures causing growth to contract by 11.1% compared with a projected value of 0.1%.
Projection errors over longer horizons, such as two years ahead, are not shown for the sake of brevity but follow a very similar pattern as those shown in Chart A, panel b, with systematic over-predictions from mid-2022 onwards.
This reflects the fact that over the sample period, fiscal policy had loosened beyond initial expectations, as governments progressively adopted and extended the range of stimulus measures and pushed consolidation into the future.
Technical assumptions refer to key variables, such as energy commodity prices and market interest rates, which are based on futures prices and the exchange rate, which is assumed to remain at recent levels at the time the projections were conducted.
See “Why we need models to make projections”, The ECB Blog, 5 July 2023.
See the box entitled “A model-based assessment of the macroeconomic impact of the ECB’s monetary policy tightening since December 2021”, Economic Bulletin, Issue 3, ECB, 2023.
See the uncertainty bands surrounding the projections for real GDP growth shown in Chart 1 and “Alternative scenarios for consumer confidence and the implications for the economy”, ECB staff macroeconomic projections for the euro area, September 2024.

 
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Prestigious Designation Unlocks $825 Million in Federal Funding for Semiconductor R&D at NY CREATES’ Albany NanoTech Complex
Cements New York as America’s Leading Semiconductor R&D Hub, Will Enable Continued Expansion of State’s High-Tech Ecosystem and Bring Back Hundreds of Good Paying Manufacturing Jobs to New York State
The CHIPS for America EUV Accelerator at NY CREATES Will Support U.S. Technological Sovereignty, National Security, American Economic Vitality and Lead to More Powerful Chips for Technology Used Everyday

Governor Kathy Hochul today celebrated the designation of NY CREATES’ Albany NanoTech Complex as the location of the CHIPS for America EUV Accelerator, an NSTC facility. This announcement marks an anticipated significant investment in EUV research and development under the Biden-Harris Administration’s CHIPS and Science Act. This prestigious designation unlocks $825 million in federal funding and makes New York State the first state in the nation to land one of three NSTC facilities.
“From day one of my administration, I pledged that New York State would lead the charge to bring back advanced manufacturing and R&D to the U.S., creating good jobs and economic opportunity in the process,” Governor Hochul said. “Thanks to the winning combination of federal CHIPS funding and New York’s determination and ingenuity, the Albany NanoTech Complex will be home to the CHIPS for America EUV Accelerator, and fuel America’s advanced manufacturing renaissance. I thank the Biden-Harris Administration, the Department of Commerce, Natcast, and our federal delegation for their partnership as we continue to work together to advance U.S. semiconductor leadership, safeguard our national security and create a brighter future for all.”
NY CREATES and Natcast, the operator of the NSTC, have signed a Memorandum of Understanding to support establishing the new EUV Accelerator in New York. The CHIPS for America EUV Accelerator will be supported by an investment of up to $825 million from the U.S. Department of Commerce and will be managed by Natcast. This prestigious and competitive award reinforces New York State’s role as a national and global leader in semiconductor innovation, strengthens the State’s position as a critical hub for the U.S. semiconductor industry, and will accelerate growth of New York’s high-tech ecosystem across the region and state while attracting innovation-based job opportunities. The EUV Accelerator will be accessible to NSTC members and Natcast researchers from across the country. NY CREATES and Natcast now expect to negotiate a contract with the final terms and conditions.
U.S. Secretary of Commerce Gina Raimondo said, “With this first proposed flagship facility, CHIPS for America is providing access to cutting-edge research and tools to the NSTC and its launch represents a key milestone in ensuring the United States remains a global leader in innovation and semiconductor research and development. The research and development component of the CHIPS and Science Act is fundamental to our long-term national security and ensuring the U.S. remains the most technologically competitive place on earth. Thanks to President Biden and Vice President Harris, we are not just producing the world’s most advanced semiconductors; we are building a resilient ecosystem that will power everything from smartphones to advanced AI, safeguarding U.S. national security and keeping America competitive for decades to come.”
Senate Majority Leader Charles Schumer said, “This is the dawn of a new day for Upstate NY and a turning point in U.S. leadership in semiconductor research. I am proud to announce America’s first major National Semiconductor Technology Center facility will be right here in Albany. This will help ensure advancements in semiconductors that will shape the next century are stamped ‘Made in America’ and not developed and made in places like China. Today, Uncle Sam is saying that Albany NanoTech is THE place for developing the next frontier of America’s technological future. I wrote the NSTC in my CHIPS & Science Law with Albany NanoTech as my inspiration, and now that dream is becoming a reality. Today we help usher in America’s next era of chip research and manufacturing, with Upstate NY leading the way.”
NY CREATES’ Albany NanoTech Complex is the most advanced, publicly-owned, accessible 300mm semiconductor R&D center in North America and is uniquely positioned to host the CHIPS for America EUV Accelerator, an NSTC Facility. Governor Hochul’s strategic $1 billion investment announced in December 2023, made this designation possible by establishing NY CREATES’ High NA EUV Lithography Center, which will support the research and development of the world’s most complex and powerful semiconductors and will be leveraged as part of the national center.
NY CREATES’ President Dave Anderson said, “With a legacy spanning more than 20 years of technological achievements, NY CREATES and our industry partners have been central to establishing and growing New York’s — and the nation’s — semiconductor R&D ecosystem. This is an historic moment for New York and the semiconductor industry, and we look forward to working closely with Natcast to leverage our resources, capabilities, and know-how to bring this innovative vision to fruition. We are thrilled that the EUV Accelerator at NY CREATES will become an even greater beacon of opportunity and collaboration for our partners as we transform today’s ideas into tomorrow’s technologies. Together, we can shape the future and in doing so, bolster America’s economic and national security while cementing our position as a global leader. We are grateful to Governor Hochul, whose unwavering commitment to the industry has positioned NY CREATES to host the EUV Accelerator, the Biden-Harris Administration, and Majority Leader Schumer for making the U.S. CHIPS & Science Act a reality.”
Empire State Development President, CEO, and Commissioner Hope Knight said, “It comes as no surprise that New York has been awarded the first flagship National Semiconductor Technology Center by the federal government, because there is no leader of any state putting more effort and resources into laying the foundation for America’s advanced manufacturing renaissance than Governor Hochul. ESD, along with our colleagues at GO SEMI and NY CREATES, are proud of the progress we have made advancing New York’s leadership in semiconductor technology and innovation but we are even more excited for the greater benefits to come — increased global investment, enhanced training and skill-building for our workforce, high quality and meaningful careers within a rapidly growing sector, and broader and more sustainable economic opportunities for all New Yorkers, particularly Upstate.”
SUNY Chancellor John B. King Jr. said, “The Albany NanoTech Complex’s well-deserved selection as the NSTC EUV Center hub is testament to the hard work and leadership of Governor Hochul and Senate Majority Leader Schumer. SUNY is proud to be a key engine of New York State’s meteoric rise in the semiconductor space, contributing our system’s academic excellence, research faculty, staff, and facilities, and educating the industry-skilled workforce necessary to meet the tremendous needs of the semiconductor industry at all levels that only a large system like SUNY can.”
The EUV Accelerator will be operated by Natcast, the non-profit entity created through the CHIPS and Science Act to operate the NSTC consortium. The EUV Accelerator’s location at NY CREATES’ Albany NanoTech Complex will allow NSTC members and Natcast researchers to access and leverage more than $25 billion in public-private investments that have been made since the site’s inception, including access to Standard NA EUV lithography by 2025 and access to High NA EUV lithography by 2026.
EUV is a critical process technology used to create advanced computer chips. Using the most advanced High NA EUV equipment, chip components will be able to be made smaller, more powerful and faster using less energy, helping the semiconductor industry become more environmentally sustainable.
Research and development at the EUV Accelerator will focus on cutting-edge innovation in semiconductor technologies, helping to secure the nation’s semiconductor supply chain and the development of next-generation chips. The EUV Accelerator will be America’s focal point for advanced semiconductor research and development initiatives that enable breakthrough technological innovations, and support programs that provide, foster, and grow a talented workforce.
Natcast CEO Deirdre Hanford said, “The CHIPS for America EUV Accelerator underscores our commitment to developing and advancing next-generation semiconductor technologies here in the U.S. Through this collaboration with NY CREATES, Natcast and NSTC members will have access to essential EUV lithography tools and processes to facilitate a wider range of research and accelerate commercialization of the technologies of tomorrow.”
IBM Chairman and CEO Arvind Krishna said, “We are thrilled that New York State has been selected as the home of our nation’s first NSTC EUV Center. For over 20 years, IBM and our public-private partners at NY CREATES’ Albany NanoTech Complex have produced many of the technical breakthroughs that have propelled the semiconductor industry forward. Thanks to Sec. Raimondo, Gov. Hochul, Sen. Schumer, and many others, the new Center in Albany will support the United States’ mission to lead global chip innovation.”
Micron Executive Vice President of Technology and Products Office Scott DeBoer said, “The compelling factors for Micron in choosing New York as home to our megafab are the rich ecosystem in support of research and development, synergistic university partnerships, an exceptional talent pipeline, and strong public support, which fosters an environment to grow semiconductor R&D in the U.S. Micron is pleased to see that the U.S. Department of Commerce has awarded the NY CREATES Albany NanoTech Center the designation of being named the NSTC’s EUV Accelerator. Thanks to the leadership of Majority Leader Schumer and Governor Hochul, we will be able to scale our memory technology leadership and advance next-generation semiconductor R&D.”
TEL Technology Center President Alex Oscilowski said, “We’re excited NY CREATES’ Albany NanoTech Complex has been selected as the home of the CHIPS for America EUV Accelerator. This marks the latest milestone in our 20-year partnership with NY CREATES, working together to drive unparalleled innovation in advanced semiconductor manufacturing technology.”
Applied Materials Semiconductor Products Group President Dr. Prabu Raja said, “Applied Materials is pleased to see Natcast and NY CREATES partnering to strengthen the nation’s semiconductor ecosystem with new investments in advanced patterning infrastructure. National R&D programs are critical for maintaining long-term leadership in chipmaking technology. The NSTC EUV Accelerator is highly complementary to commercial platforms like Applied’s META Center (Materials Engineering Technology Accelerator) at Albany NanoTech and EPIC Center in Silicon Valley. When national and commercial programs work together, they can lead to breakthrough innovations that propel U.S. technology leadership.”
Senator Kirsten Gillibrand said, “Building up America’s domestic semiconductor industry is critical to create good-paying jobs, protect our supply chains, and strengthen our national security, and I’m proud to see New York leading this effort. Upstate New York is already a hub for cutting-edge semiconductor manufacturing, research, and development, and the designation of NY CREATES’ Albany NanoTech Complex as the location of the CHIPS for America EUV Accelerator will help us maintain our status as a global leader in such a vital industry. I fought hard to pass the CHIPS and Science Act, and I’m proud to see this historic legislation bring scientific innovation and economic development to the Capital Region.”
Representative Paul Tonko said, “Today is a monumental moment for our region, for job creation, for cutting-edge research, and for our 21st century precision economy. In the years since Congress passed the CHIPS and Science Act, I have been relentlessly advocating alongside the many stakeholders who call NY CREATES home to leverage the shovel-ready infrastructure and advanced R&D capabilities right here at the Albany NanoTech Complex. Our region has long been poised to take the reins to steer America’s semiconductor revitalization and, thanks to the pioneering work and sound investment of New York leadership, local chip manufacturers, researchers, educational institutions, and other stakeholders, that reality is upon us. I’m thrilled to celebrate this groundbreaking announcement and remain as determined as ever to secure strong federal action that delivers for American workers, consumers, and communities.”
Albany County Executive Daniel P. McCoy said, “This designation of NY CREATES’ Albany NanoTech Complex as the location of the CHIPS for America EUV Accelerator is incredible news for Albany County and the Capital Region and reinforces New York State’s role as a global leader in semiconductor innovation. It was under a year ago that the Governor announced a $1 billion investment in the High NA EUV Lithography Center, setting the stage for today’s announcement. This designation further strengthens our position as a critical hub for the semiconductor industry. Congratulations to Senator Schumer and Governor Hochul, whose tireless efforts delivered this major economic driver and the job opportunities that will come with it.”
Albany Mayor Kathy Sheehan said, “This is a milestone day for the City of Albany, the Capital Region, the state of New York and the United States. I want to thank President Biden, Vice President Harris, Majority Leader Schumer, Senator Gillibrand, Congressman Tonko, and Governor Kathy Hochul for their tireless efforts and advocacy. The investment and award announced today continues our City and region’s legacy of developing cutting edge innovations, and will ensure our global leadership in EUV research and development. We look forward to continuing to grow our workforce, housing and cultural assets to ensure we attract the businesses and research institutions that will want to locate here because of this historic investment.”
The EUV Accelerator will also act as a magnet for a wide range of high-tech companies, spurring additional growth of the innovation ecosystem in New York State, the Northeast, and the U.S. This announcement builds upon billions in CHIPS and Science Act funding that has been announced for industry-leading semiconductor companies in New York State, including GlobalFoundries, Micron, Wolfspeed, and Edwards Vacuum, as well as for the establishment of the Northeast Regional Defense Technology Hub (NORDTECH), founded and led by NY CREATES, Cornell University, IBM, Rensselaer Polytechnic Institute, and the University at Albany, in addition to the Upstate New York Workforce Hub which spans from Buffalo to Rochester to Syracuse.
The new EUV Accelerator at NY CREATES opens the door to millions of dollars in additional awards and research opportunities in the future. NSTC members and Natcast researchers from across the state and nation will be able to leverage the cutting-edge equipment that will be available at the facility to continue to develop and then manufacture their advanced chips.
With the establishment of the new EUV Accelerator, significant workforce development efforts will be undertaken to address the need for skilled workers to allow individuals across New York and the country to gain valuable skills and career opportunities in the semiconductor industry. Academic institutions from New York State and beyond will be able to find additional ways to collaborate with NY CREATES and Natcast.
Governor Hochul’s Commitment to the Semiconductor Industry
Under Governor Hochul’s leadership, Upstate New York has seen a major revival in semiconductor related investment. The establishment of the EUV Accelerator in Albany builds on the continued commitment to establish New York State as a global chipmaking hub.
Governor Hochul has maintained a strong commitment to building a modern economy in New York State by growing a dynamic and innovative semiconductor industry. In 2022, the Governor signed New York’s historic Green CHIPS legislation to make New York a hub for semiconductor manufacturing, creating 21st century jobs and kick-starting economic growth while maintaining important environmental protections. As part of the FY24 Enacted Budget, Governor Hochul secured a $45 million investment to create the Governor’s Office of Semiconductor Expansion, Management, and Integration (GO-SEMI), which leads statewide efforts to develop the chipmaking sector. In December 2023, Governor Hochul announced a $10 billion public-private partnership – including $9 billion in private investment from IBM, Micron, Applied Materials, Tokyo Electron and other semiconductor leaders – to bring the future of advanced semiconductor research to New York’s Capital region by creating the nation’s first and only industry accessible, High NA EUV Lithography Center at NY CREATES’ Albany NanoTech Complex. All of these efforts are positioning New York as an innovation leader ready to support one of three CHIPS for America R&D facilities that will be established under the U.S. CHIPS & Science Act.
New York is home to a robust semiconductor industry which supports more than 150 semiconductor and supply chain companies that employ over 34,000 New Yorkers. Thanks to Governor Hochul’s efforts, the industry is continuing to grow with major investments from semiconductor businesses and supply chain companies like Micron, GlobalFoundries, AMD, Edwards Vacuum, Menlo Micro and TTM Technologies to expand their presence in New York. In fact, in the last two years, chip companies have announced over $112 billion in planned capital investments in New York – more than any other state – and one in four U.S.-made chips will be produced within 350 miles of Upstate New York. No other region in the country will account for a greater share of domestic production.

 
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