ECB wage tracker, updated with agreements signed up to 19 February 2025, broadly unrevised compared to data release following January Governing Council meeting
Forward-looking information continues to suggest that negotiated wage pressures will ease overall in 2025
Forward-looking information from the wage tracker should not be interpreted as a forecast

The European Central Bank (ECB) wage tracker, which only covers active collective bargaining agreements, indicates negotiated wage growth with smoothed one-off payments of 4.7% in 2024 (based on an average coverage of 48.2% of employees in participating countries) and 3.3% in 2025 (based on an average coverage of 40.5%). The ECB wage tracker with unsmoothed one-off payments indicates average negotiated wage growth of 4.8% in 2024 and 2.8% in 2025. The steeply downward trend of the forward-looking wage tracker in 2025 partly reflects the mechanical impact of large one-off payments (that were paid in 2024, but drop out in 2025) and the front-loaded nature of wage increases in some sectors in 2024. The wage tracker excluding one-off payments indicates negotiated wage growth of 4.1% in 2024 and 3.9% in 2025. See Chart 1 and Table 1 for further details.
The ECB wage tracker may be subject to revisions, and the forward-looking part should not be interpreted as a forecast as it only captures information in a more limited share of active collective bargaining agreements. As new agreements are made throughout the year, the growth rates indicated by the wage tracker are subject to change.
For a more comprehensive assessment of wage developments in the euro area, please refer to the March 2025 macroeconomic projection exercise, which indicates a yearly growth rate of compensation per employee in the euro area of 4.6% in 2024 and 3.4% in 2025, with a quarterly profile in 2025 of 3.8% in the first quarter, 3.7% in the second quarter, 3.4% in the third quarter and 2.8% in the fourth quarter.
The ECB publishes four wage tracker indicators for the aggregate of seven participating euro area countries on the ECB Data Portal.

Chart 1
ECB wage tracker: forward-looking signals for negotiated wages and revisions to previous data release

2023-25

Revisions to previous data release

(Left-hand scale: yearly growth rates, in percentages; right-hand scale: percentage share of employees)

(percentage points)

Sources: ECB calculations based on data provided by the Deutsche Bundesbank, the Bank of Greece, the Banco de España, the Banque de France, the Banca d’Italia, the Oesterreichische Nationalbank, the Dutch employers’ association AWVN and Eurostat. Indicator of negotiated wage growth calculated using data from the Deutsche Bundesbank, the Spanish Ministry of Labour and Social Economy, the Banque de France, the Italian National Institute of Statistics (ISTAT), Statistics Netherlands, Statistics Austria and Haver Analytics.

What do the four different indicators show?

The headline ECB wage tracker is a tracker of negotiated wage growth that includes collectively agreed one-off payments, such as those related to inflation compensation, bonuses or back-dated pay, which are smoothed over 12 months.

The ECB wage tracker excluding one-off payments reflects the extent of structural (or permanent) negotiated wage increases.

The ECB wage tracker with unsmoothed one-off payments is constructed using a methodology that, both in terms of data sources and statistical methodology, is conceptually similar to, but not necessarily the same as, the one used for the ECB indicator of negotiated wage growth.

The share of employees covered is the percentage of employees across the participating countries that are directly covered by ECB wage tracker data. This indicator provides information on the representativeness of the underlying (negotiated) wage growth signals obtained from the set of wage tracker indicators for the aggregate of the participating countries. Employee coverage differs across countries and within each country over time (more details provided in Table 2).

Table 1
ECB wage tracker: summary details.

(ECB wage tracker indicators reflect yearly growth in negotiated wages, in percentages; coverage is defined as the share of employees in participating countries, in percentages)

ECB wage tracker
Coverage

Headline indicator
excluding one-off payments
with unsmoothed one-off payments
Share of employees (%)

2013-2023
2.0
1.9
2.0
49.1

2024
4.7
4.1
4.8
48.2

2025
3.3
3.9
2.8
40.5

2024 Q1
4.1
3.7
5.1
48.7

2024 Q2
4.4
3.8
3.4
48.6

2024 Q3
5.0
4.4
6.5
48.1

2024 Q4
5.3
4.7
4.2
47.5

Jan-25
4.8
4.3
2.9
47.2

Feb-25
4.9
4.7
3.2
47.1

Mar-25
4.7
4.6
1.7
43.9

Apr-25
4.7
4.7
4.4
43.3

May-25
4.4
4.4
4.1
43.1

Jun-25
4.2
4.2
3.9
40.7

2025 Q3
2.2
3.5
1.7
38.2

2025 Q4
1.5
3.0
2.9
35.5

Sources: ECB calculations based on data provided by the Deutsche Bundesbank, the Bank of Greece, the Banco de España, the Banque de France, the Banca d’Italia, the Oesterreichische Nationalbank, AWVN and Eurostat.
Notes: See the technical details at the end of this press release. Rows with values in italics and bold refer to the forward-looking aspect of the respective indicators.

Table 2
Employee coverage by country

(share of employees in each country, in %)

Germany
Greece
Spain
France
Italy
Netherlands
Austria
Euro area

2013-2023
42.0
10.0
51.7
51.6
48.7
64.1
57.8
49.1

2024 Q1
44.2
15.9
47.8
47.7
48.3
62.6
78.6
48.7

2024 Q2
44.6
15.9
47.8
47.7
48.1
62.3
77.8
48.6

2024 Q3
44.7
15.8
47.7
47.6
47.9
60.7
77.7
48.1

2024 Q4
44.1
15.9
47.8
47.7
47.9
58.1
77.5
47.5

2025 Q1
42.2
18.0
46.8
46.0
44.7
57.1
75.5
46.1

2025 Q2
38.5
13.1
46.1
36.1
34.9
54.8
69.4
42.4

2025 Q3
37.0
5.5
39.9
28.2
27.3
49.4
67.3
38.2

2025 Q4
35.1
5.1
34.6
23.6
26.8
39.5
62.3
35.5

Sources: ECB, Deutsche Bundesbank, Bank of Greece, Banco de España, Banque de France, Banca d’Italia, Oesterreichische Nationalbank, AWVN and Eurostat.
Notes: The euro area aggregate comprises the seven participating wage tracker countries. The coverage shows the relative strength of wage signals for each country and the euro area. The historical average is calculated from January 2016 to December 2023 for Greece and from February 2020 to December 2023 for Austria. For the other countries, it is calculated from January 2013 to December 2023. Rows with values in italics and bold refer to the forward-looking components.

For media queries, please contact Nicos Keranis, tel.: +49 172 7587237.
Notes:

The ECB wage tracker is the result of a Eurosystem partnership currently comprising the European Central Bank and seven euro area national central banks: the Deutsche Bundesbank, the Bank of Greece, the Banco de España, the Banque de France, the Banca d’Italia, De Nederlandsche Bank and the Oesterreichische Nationalbank. It is based on a highly granular database of active collective bargaining agreements for Germany, Greece, Spain, France, Italy, the Netherlands and Austria. The wage tracker should be considered as only one of many possible sources that can help to assess wage pressures in the euro area. These are not wage growth forecasts, as they only indicate wage pressures that mechanically arise from the collective bargaining agreements already in place. The Eurosystem and ECB staff macroeconomic projections remain the most comprehensive assessment of the wage outlook for the euro area.

The wage tracker methodology uses a double aggregation approach. First, it aggregates the highly granular information on collective bargaining agreements and constructs the wage tracker indicators at the country-level using information on the employee coverage for each country. Second, it uses this information to construct the aggregate for the euro area using time-varying weights based on total compensation of employees in the participating countries.
Given the forward-looking nature of the tracker, which is dependent on the underlying collective bargaining agreements database, the wage signals should always be considered as dependent on the information available at any given point in time and are thus subject to revision.
The results in this press release do not represent the views of the ECB’s decision-making bodies.

 
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The Council reached a political agreement today on a new EU directive (DAC9) that will improve administrative cooperation in the field of taxation.
The objective of this legislation is to enhance cooperation and information exchange on minimum effective corporate taxation to better fulfil the filling obligations that multinational enterprise groups and large-scale domestic groups have under the Pillar 2 of the G20/OECD global agreement. This international deal was reached to avoid base erosion and profit shifting, ensuring that large corporations pay a minimum effective taxation. The Pillar 2 rules became part of EU law in 2022.

We’re making the next step in implementing the rules on minimum effective taxation of the largest multinationals. The companies concerned will have a single format for filing relevant information, and member states’ tax authorities will closely cooperate on exchanging relevant information. This will significantly simplify the filing process and reduce the administrative burden both for tax authorities and companies concerned.
Andrzej Domański, Minister of Finance of Poland

DAC9 updates the existing EU’s directive on administrative cooperation (DAC) by expanding tax transparency rules. It simplifies reporting for large corporations, enhances data exchange between tax authorities, and aligns with global minimum taxation standards.
This new directive also creates a standard form, in line with the one developed by the G20/OECD’s Inclusive Framework on Base Erosion and Profit Shifting (BEPS), which multinationals and large domestic groups will be required to use to report tax-related information that are necessary to ensure proper functioning of the system on minimum rate of corporate tax. The profit of the large multinational and domestic groups or companies with a combined annual turnover of at least €750 million is meant to be taxed at a minimum rate of 15%.
Next steps
The DAC9 directive will be formally adopted by the Council, which acts as a sole legislator, once the legal linguistic work has been completed. After that, it will be published in the Official Journal and will enter into force on the day following that of its publication.
Member states will have to implement DAC 9 by 31 December 2025. Countries opting to delay the implementation of the ‘Pillar 2 Directive’ are still required to transpose DAC 9 by the same deadline.
Background
On 8 October 2021, almost 140 countries in the OECD/G20 Inclusive Framework on BEPS reached a landmark agreement on international tax reform, as well as on a detailed implementation plan.
On 22 December 2021, the Commission presented a proposal for a directive which aims to implement Pillar 2 in a way which is consistent and compatible with EU law.
The ‘Pillar 2 directive’ sets out an obligation to file the top-up tax information return (TTIR) that contains the information a tax administration needs to perform an appropriate risk assessment and evaluate the entity’s tax liability correctly. The directive allows for multinationals to perform a central TTIR filing for the entire group by the ultimate parent entity or designated filing entity, instead of each company that forms part of a multinational enterprise group filing a local TTIR in each jurisdiction they are based in. DAC9, which will contain the standard format of a TTIR, will render these provisions operational.
The Commission presented the DAC9 proposal on 17 October 2024. The European Parliament was consulted on the proposal and issued its opinion on 12 February 2025.
 
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NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the February 2025 Survey of Consumer Expectations, which shows that households’ inflation expectations increased slightly at the short-term horizon but remained unchanged at the medium- and longer-term horizons. Households expressed more pessimism about their year-ahead financial situations in February, while unemployment, delinquency, and credit access expectations deteriorated notably. Meanwhile, spending growth expectations rose significantly. Average quit probabilities among those employed fell to the lowest level since July 2023.
The main findings from the February 2025 Survey are:
Inflation

Median inflation expectations increased by 0.1 percentage point at the one-year horizon, to 3.1%, and were unchanged at the three-year and five-year horizons (both at 3.0%) in February. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at the one-year horizon and was unchanged at the three- and five-year horizons.
Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased at all three horizons.

Median home price growth expectations increased by 0.1 percentage point to 3.3%. This series has been moving in a narrow range between 3.0% and 3.3% since August 2023.
Year-ahead commodity price expectations increased for all commodities. Median expected price growth increased by 1.1 percentage points for gas to 3.7% (its highest level since June 2024), 0.5 percentage point for food to 5.1% (its highest level since May 2024), 0.4 percentage point for the cost of medical care to 7.2%, 1.0% percentage point for the cost of a college degree to 6.9%, and 0.7 percentage point for rent to 6.7%.

Labor Market

Median one-year-ahead earnings growth expectations were unchanged at 3.0% in February. The series has been moving within a narrow range between 2.7% and 3.0% since January 2024.
Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—jumped 5.4 percentage points to 39.4%, its highest reading since September 2023. The increase was broad-based across age, education, and income groups.
The mean perceived probability of losing one’s job in the next 12 months decreased by 0.1 percentage point to 14.1%. The mean probability of leaving one’s job voluntarily (expected quit rate) in the next 12 months decreased by 2.3 percentage points to 17.6%, its lowest reading since July 2023. The decrease in the expected quit rate was broad-based across education and income groups.
The mean perceived probability of finding a job in the next three months if one’s current job was lost decreased by 0.3 percentage point to 51.2%, remaining below its trailing 12-month average of 52.5%.

Household Finance

The median expected growth in household income increased by 0.1 percentage point to 3.1% in February. The series has been moving in a narrow range between 2.9% and 3.3% since January 2023.

Median nominal household spending growth expectations rose by 0.6 percentage point to 5.0%, moving just above its trailing 12-month average of 4.9%. The increase was broad-based across age, education, and income groups, but most pronounced for those with at most a high school education and those with an annual household income below $50,000.
Perceptions of credit access compared to a year ago showed a larger share of households reporting it is harder to get credit, and a smaller share reporting it is easier. Expectations for future credit availability deteriorated considerably in February, with the share of respondents expecting it will be harder to obtain credit a year from now increasing to 46.7% from 35.6%. This reading is the highest since June 2024.
The average perceived probability of missing a minimum debt payment over the next three monthsincreased by 1.3 percentage points to 14.6%, the highest level since April 2020. The increase was driven by those without a college degree and largest for those under age 40.
The median expectation regarding a year-ahead change in taxes at current income level increased by 0.2 percentage point to 3.4%.
Median year-ahead expected growth in government debt decreased by 1.0 percentage point to 5.0%, the lowest reading since July 2017.
The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.4 percentage point to 25.4%.
Perceptions about households’ current financial situations compared to a year ago were mostly unchanged, but year-ahead expectations about households’ financial situations deteriorated considerably. The share of households expecting a worse financial situation in one year from now rose to 27.4%, the highest level since November 2023.
The mean perceived probability that U.S. stock prices will be higher 12 months from now dropped by 3.3 percentage points to 37.0%, the lowest level since December 2023.

About the Survey of Consumer Expectations (SCE)

The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty regarding consumers’ outlooks. Expectations are also available by age, geography, income, education, and numeracy.
The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to 12 months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, this panel allows us to observe the changes in expectations and behavior of the same individuals over time. For further information on the SCE, please refer to an overview of the survey methodology here, the interactive chart guide, and the survey questionnaire.
For more information, please contact:

Mariah Measey, NY FED

 
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Federal bank regulatory agencies today reported in the 2024 Shared National Credit (SNC) report that credit risk associated with large, syndicated bank loans remains moderate. However, the agencies noted weakened credit quality trends continue due to the pressure of higher interest rates on leveraged borrowers and compressed operating margins in some industry sectors.
The agencies also noted that the magnitude and direction of risk in 2025 is likely to be impacted by borrowers’ ability to manage interest expenses, real estate conditions, and other macroeconomic factors.
The 2024 review reflects the examination of SNC loans originated on or before June 30, 2024. The review focused on leveraged loans and stressed borrowers from various industry sectors and assessed aggregate loan commitments of $100 million or more that are shared by multiple regulated financial institutions.
The 2024 SNC portfolio included 6,699 borrowers totaling $6.5 trillion in commitments, an increase in commitments of 1.8 percent from a year ago. The percentage of loans that deserve management’s close attention (“non-pass” loans comprised of SNC commitments rated “special mention” and “classified”) increased from 8.9 percent of total commitments to 9.1 percent year over year. While U.S. banks hold 45 percent of all SNC commitments, they hold only 23 percent of non-pass loans. Nearly half of total SNC commitments are leveraged, and leveraged loans comprise 79 percent of non-pass loans.
 
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Today, the European Commission and national consumer protection authorities of 25 Member States as well as Iceland and Norway released the results of a screening (‘sweep’) of online traders selling second-hand goods, such as clothes, electronic equipment or toys.
‘Sweeps’ are coordinated by the European Commission and carried out simultaneously by national enforcement authorities. The objective of this sweep was to verify whether the practices of these traders are compliant with EU consumer law. Consumer authorities checked 356 online traders and identified 185 (52%) as potentially in breach of EU consumer law.
Out of the total amount of traders screened:

40% did not inform consumers of their right of withdrawal in a clear manner, such as the right to return the product within 14 days without justification or cost;
45% did not correctly inform consumers of their right to return faulty goods or goods that do not look or work as advertised;
57% did not respect the minimum period of one year legal guarantee for second-hand goods;
Out of 34% of traders that presented environmental claims on their website 20% were not sufficiently substantiated and 28% were manifestly false, deceptive, or likely to qualify as unfair commercial practices;
5% did not provide their identity correctly, and 8% did not provide the total price of the product, including taxes.

Consumer authorities will now decide whether to take action against the 185 traders that were earmarked for further investigation and request compliance according to their national procedures.
Background
The Consumer Protection Cooperation (CPC) is a network of national authorities responsible for the enforcement of EU consumer protection laws. Under the coordination of the European Commission, they collaborate to tackle infringements of consumer law occurring in the Single Market.
Traders’ obligations with regards to consumer information are covered by the Consumer Rights Directive and the e-Commerce Directive. Traders’ commercial practices must not mislead consumers and comply with the Unfair Commercial Practices Directive. When selling second-hand goods, traders should also respect their obligations regarding the legal guarantee of conformity stated in the Sales of Goods Directive.
The new Directive on Empowering Consumers for the Green Transition, once transposed by Member States into their national law, will ensure that consumers are provided with better information on the durability and reparability of goods and the consumer’s legal guarantee rights at the point of sale. It will also strengthen consumer protection rules against greenwashing and early obsolescence practices.
The main sectors of activity concerned are clothes, accessories, electronic equipment, toys and gaming items, books, household appliances, interior design and furniture, CDs and vinyls, childcare products, cars (including electric cars), sport items, spare parts, motorbikes and bikes, gardening items, do-it-yourself and others.
The following EU Member States participated in the sweep: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. Iceland and Norway also took part to the sweep.
 
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Blog post by Clémence Berson, Vasco Botelho, Luis Guirola Abenza, Laura Hospido, Friderike Kuik, Christiane Nickel and Manuel Rojo Lopez | The gender gap in labour markets is narrowing. But this process has slowed down. The ECB Blog gives an overview of recent developments for all euro area countries.

The gender gap at work is closing – but slowly. Women are paid less for their work than men are.[1] Inequality on the labour market keeps us from making the best use of all talent, leads to inefficiency and misallocation of workers. However, the gender gap is shrinking, albeit at a decreasing speed. We show the differences between women and men on the labour markets in hours worked, part-time positions, wages and total earnings for all euro area countries.[2] Our interactive graphs let you compare the developments in gender inequality among countries and over time.
Gender gaps in the euro area labour market
Based on an analysis using household-level data from the EU Survey on Income and Living Conditions (EU-SILC) we find that the gender gap in total earnings has improved significantly. In 2005 it stood at 50%, meaning that the average man took home double the yearly pay of the average woman (aged 15 to 64). By 2023 this had fallen to 35% (Chart 1).[3] While this change is significant, the gap in the euro area remains quite large. In addition, the speed at which it is narrowing is slower than two decades ago.

Chart 1
Gender gap in total earnings

Percentage of the mean earnings for the average male aged 15-64; and percentage point contributions

Sources: Eurostat, EU SILC, and ECB staff calculations. Notes: The decomposition of the gender gap in total earnings follows the methodology in Olivetti, Pan, and Petrongolo (2024), and Andrew, Bandiera, Costa Dias and Landais (2024), which decomposes the effects in three different gaps – (1) the hourly wage gap, (2) the gap in the number of hours worked, and (3) the employment participation gap.

Three main elements of the gender wage gap
A major factor behind the gender gap is the different labour participation rates of men and women. In 1992 the employment rate of women (44.8%) was 27.8 percentage points lower than that of men (72.7%) across today’s euro area countries (Chart 2).[4] This was because women often struggled to find stable jobs and – to a greater extent than men – took care of their households. Since then female employment has increased gradually, reducing the gap to 9.0 percentage points by 2023. The red bar in Chart 1 shows how the shrinking employment gap – from 17.3 in 2005 to 10.5 percentage points in 2023 – contributed to a similar decrease in the gender earnings gap.
A second factor is the different patterns for part-time work. Women remain significantly more likely to work part-time than men. While in the 1990s the rate of women in part-time contracts was 21.5 percentage points higher than that for men, by the mid-2000s this figure had grown to 26.9 percentage points before shrinking slightly to 24 percentage points by 2024 (Chart 3). This discrepancy contributes to the gender gap in total earnings because it affects the hours usually worked by men and women. It accounted for 14.1 percentage points of the earnings gap in 2005, falling to 10.7 percentage points by 2024. This decrease could be associated with an increase in the average hours worked by women in part-time employment, mitigating the effects from a large gap in part-time employment. In other words, women work part-time more often, but female part-timers have increased their hours over time.
A third factor is the hourly pay gap. This figure measures how much more the average man earns per hour than the average woman. In 2023 it stood at 13.4%, down from 17.8% in 2005, with an average annual decrease of only 0.2 percentage points.
What is behind this sluggish change? While education might appear to be a likely factor, women now in fact have a slightly higher average level of education than men, meaning that the cause must lie elsewhere. One explanation is the existence of clusters. Some occupations are more male-orientated, like firefighting or engineering, while others are more female-orientated, like nursing or teaching. And some of the male-orientated jobs simply pay better. Other explanations relate to norms and beliefs about gender roles, men and women’s different preferences, or women’s more limited possibilities to change jobs due to external constraints.[5] And of course there is also the possibility of simple discrimination. Because even when we control for additional factors such as average years of employment or maternity leave periods, there is still an unexplained wage gap. In Germany, for example, this unexplained gap stood at 6% in 2024. This is the average difference in pay between female employees and male employees with comparable job qualifications and career paths.
Regional patterns: gender gaps in different countries
While we find that the gender gap is narrowing across the euro area, there are significant regional differences. These depend on labour market features, national policies and culture, as shown in interactive Charts 2 and 3.[6] In northern countries, especially Finland for example, the gender pay gap is quite small. Use the “select” option in the toolbar to explore the situation in other countries. The gap in working time, however, is still significant. In Eastern Europe, for example the Baltic countries, you will find a more equal working environment in terms of both employment rates and hours worked. This has been attributed to the legacy of socialism,[7] which promoted women’s economic inclusion. In Western Europe men’s and women’s employment rates have converged, with many women entering the workforce, often in part-time jobs, and in particular in Austria, Germany and the Netherlands. Meanwhile in Southern Europe the gender gap in employment has also narrowed significantly, driven by a higher share of women being in full-time rather than part-time employment. Portugal, which has historically had small gender gaps in employment, is a particular success case in this region.
If governments aim to close the gender gap in labour markets, public policies should be targeted towards barriers faced by girls and women, for example with paid parental leave policies and investments into the childcare system. Academic studies have highlighted the importance of childcare, especially during the first few years, on women’s labour market participation.[8] Increasing the time fathers can spend with their young children would also help reduce the “child penalty” women face in the labour market and their unequal burden at home.
Closing the gap
But these public policies cannot fully tackle every cause of gender gaps in the workplace, which are usually linked to discrimination and unconscious bias against women. Steering young women and girls towards more scientific careers, for example, could help to reduce existing gender gaps by opening up alternatives that women traditionally do not consider. Institutional initiatives such as mentorship programs, networking opportunities, and training and development programs can also help to empower women and provide them with the tools they need to succeed. By addressing the barriers to women’s participation and promoting gender equality, we can create a more inclusive and diverse workforce that benefits everyone. However, closing the gap is not solely an issue for women. New fathers should also have the opportunity to take care of their newborns, possibly via more generous paternity leave policies, and access to childcare should be improved. All these actions taken together would help addressing what the Nobel Prize laureate Claudia Goldin referred to as the “last chapter” in achieving gender equality.
The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.
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For a literature review, see Blau, F. D., and Kahn, L. M., “The gender wage gap: Extent, trends, and explanations”, Journal of Economic Literature, vol. 55, No. 3, 2017.
Composition effects in determining employment and wage growth in the euro area, accounting also for gender, were notably reported by Kouvavas, O., Kuik, F., Koester, G., and Nickel, C., “The effects of changes in the composition of employment on euro area wage growth”, ECB Economic Bulletin, Issue 8/2019, 2020.
The gender gap in total earnings reflects the difference between the total earnings from employment recorded by the average man and by the average woman in the working age population (15-64 years old), expressed as a ratio to the total earnings from employment obtained by the average man in the same age group.
See Berson, C., and Botelho, V., “Record labour participation: workforce gets older, better educated and more female”, The ECB Blog, 2023.
For further insights, see Olivetti, C., Pan, J., and Petrongolo, B., “The evolution of gender in the labor market”, NBER Working Papers, No 33153, 2024.
See Guirola, L., Hospido, L., and Weber, A., “Family and career: an analysis across Europe and North America,” Banco de Espana Working Papers, No 2415, 2024.
See for example Senik, Lippman and Georgieff, “Undoing gender with institutions: Lessons from the German division and reunification”, Economic Journal, 130 (629), 1445-1470, 2020.
See Morrissey, T. W., “Child care and parent labor force participation: a review of the research literature”. Review of Economics of the Households, 2017, vol. 15, Issue 1, No1, OECD, “Engaging young children,” 2018.

Full post, featuring interactive graphs, here.
 
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We are living in the most momentous and dangerous of times. I do not need to describe the grave nature of the threats that we face. Or the devastating consequences that we will have to endure if those threats would come to pass. Because the question is no longer whether Europe’s security is threatened in a very real way. Or whether Europe should shoulder more of the responsibility for its own security. In truth, we have long known the answers to those questions. The real question in front of us is whether Europe is prepared to act as decisively as the situation dictates. And whether Europe is ready and able to act with the speed and the ambition that is needed. In the various meetings in the last few weeks – most recently two days ago in London – the answer from European capitals has been as resounding as it is clear. We are in an era of rearmament. And Europe is ready to massively boost its defence spending. Both, to respond to the short-term urgency to act and to support Ukraine but also to address the long-term need to take on much more responsibility for our own European security.
This is why today I have written a letter to Leaders ahead of Thursday’s European Council. This is why we are here together today. And I have outlined in this letter to the leaders the ReArm Europe Plan. This set of proposals focuses on how to use all of the financial levers at our disposal – in order to help Member States to quickly and significantly increase expenditures in defence capabilities. Urgently now but also over a longer time over this decade. There are five parts to this.
The first part of this ReArm Europe plan is to unleash the use of public funding in defence at national level. Member States are ready to invest more in their own security if they have the fiscal space. And we must enable them to do so. This is why we will shortly propose to activate the national escape clause of the Stability and Growth Pact. It will allow Member States to increase significantly their defence expenditures without triggering the Excessive Deficit Procedure. For example: If Member States would increase their defence spending by 1,5% of GDP on average this could create fiscal space of close to EUR 650 billion over a period of four years.
The second proposal will be a new instrument. It will provide EUR 150 billion of loans to Member States for defence investment. This is basically about spending better – and spending together. We are talking about pan-European capability domains. For example: air and missile defence, artillery systems, missiles and ammunition drones and anti-drone systems; but also to address other needs from cyber to military mobility for example. It will help Member States to pool demand and to buy together. Of course, with this equipment, Member States can massively step up their support to Ukraine. So, immediate military equipment for Ukraine. This approach of joint procurement will also reduce costs, reduce fragmentation increase interoperability and strengthen our defence industrial base. And it can be to the benefit of Ukraine, as I have just described. So this is Europe’s moment, and we must live up to it.
Third point is using the power of the EU budget. There is a lot that we can do in this domain in the short term to direct more funds towards defence-related investments. This is why I can announce that we will propose additional possibilities and incentives for Member States that they will decide, if they want to use cohesion policy programmes, to increase defence spending.
The last two areas of action aim at mobilising private capital by accelerating the Savings and Investment Union and through the European Investment Bank.
To conclude: Europe is ready to assume its responsibilities. ReArm Europe could mobilise close to EUR 800 billion for a safe and resilient Europe. We will continue working closely with our partners in NATO. This is a moment for Europe. And we are ready to step up.
 
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The Union of Skills will support the development of our Union’s human capital to strengthen EU competitiveness. A key initiative of the first 100 days of this Commission, the Union of Skills will:  

Deliver higher levels of basic skills, for example through the Basic Skills Support Scheme pilot;

Provide lifelong opportunities for adults to regularly upskill and reskill, for example through a Skills Guarantee pilot;

Facilitate recruitment by businesses across the EU, for example through a Skills Portability Initiative;

Attract and retain the skills and talents needed in the European economy, for example through the ‘Choose Europe’ action to attract top talent globally;

Have a strong governance foundation, building on the new European Skills High-Level Board that will be informed by a European Skills Intelligence Observatory.

From children at school to those reaching retirement, this initiative will empower people across Europe with the skills they need to thrive. It will also encourage the portability of skills across the continent through the free movement of knowledge and innovation.
The Union of Skills Communication is accompanied by an Action Plan on Basic Skills and a STEM Education Strategic Plan to improve skills in science, technology, engineering, and maths, promote STEM careers, attract more girls and women, and boost preparedness in the face of digital and clean-tech transitions.
New targets for 2030
The Commission proposes a number of new targets by 2030:

The share of underachievement in literacy, mathematics, science and digital skills should be less than 15%, whereas the share of top performance in literacy, mathematics and science should be at least 15%;
The share of students enrolled in STEM fields in initial medium-level VET should be at least 45%, with at least 1 out of every 4 students female;
The share of students enrolled in STEM fields in third-level education be at least 32%, with at least 2 out of 5 students female;
The share of students enrolled in ICT PhD programmes should be at least 5%, with at least 1 out of every 3 students female.

Building a solid foundation through education and training
Education and training play an essential role in creating quality jobs and lives, for example we will support literacy, maths, science, digital and citizenship skills through the Basic Skills Support Scheme pilot. Together with Member States, the Commission will develop and financially support a framework of effective intervention measures (such as early warning, monitoring, personalised support, networks). This scheme for children and young people that struggle to acquire basic skills will improve their achievement levels.
Regular upskilling and reskilling as the new norm
Developing new skills should be a recurring and essential part of peoples’ professional lives in our evolving economies.
The Commission will develop a Skills Guarantee pilot. This scheme will offer workers involved in restructuring processes, or at risk of unemployment, the opportunity to develop further their careers in another company or another sector.
The EU will streamline and reinforce the EU Skills Academies that deliver the skills needed by businesses for the green transition and the Clean Industrial Deal.
Helping the free movement of skilled people
The Single Market’s full potential will be unlocked by circulating skills. To open up more opportunities for workers and businesses, a Skills Portability Initiative will make it easier to recognise and accept skills and qualifications across the EU, independently of where they were acquired. The initiative will promote the use of digital credentials.
Making the EU a magnet for talent
The Union of Skills will bolster the EU’s ability to attract, develop and retain key talents, from inside the EU and around the world.
For example, the Commission will launch a Marie Skłodowska-Curie Actions pilot call ‘Choose Europe’ with a budget of €22.5 million to attract top talent globally, by offering excellent scientific working and employment conditions and careers prospects.
Furthermore, once adopted by the Parliament and Council, the Commission will set up an EU Talent Pool for recruitment from outside the EU at all skills levels, especially in occupations facing severe shortages. A Visa Strategy will be presented this year to further support the arrival of top students, trained workers, and researchers.
Strong new governance
Delivering on the Union of Skills will require a collective responsibility and increased ambition, investment, and effective reform implementation. For this, the Union of Skills will rest on a strong governance, informed by a European Skills Intelligence Observatory. The observatory will provide data and foresight regarding skills and allow for early warning alerts regarding skills shortages in critical or strategic sectors.
A new European Skills High-Level Board, will bring together education and training providers, business leaders and social partners to provide comprehensive insights on skills to the EU policy makers. Building on the Observatory the Board will ensure a coordinated vision and the identification of the bold action necessary to strengthen our human capital.
Because human capital, education and skills are a core matter for ensuring European competitiveness, the Commission intends to introduce a new EU-27 Recommendation on education and skills in the European Semester cycle, to guide the Member States and relevant actors.
 
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Today, the Strategic Technologies for Europe Platform (STEP) celebrates its first year in action for the development and manufacturing of critical technologies in Europe. Over the past year, STEP has pooled the investment firepower of 11 EU programmes, mobilising over €15 billion to support Europe’s competitiveness in three strategic sectors: digital technologies and deep-tech innovation, clean and resource-efficient technologies, and biotechnologies.
So far, €9.1 billion of EU funds have been mobilised towards STEP across five programmes managed by the Commission directly, namely the Digital Europe programme, the European Defence Fund, the EU4Health programme, Horizon Europe, and the Innovation Fund. Additional €6.1 billion of EU funds are being mobilised towards STEP thanks to reprogramming of cohesion policy funds by 11 pioneer EU Member States.
The Commission’s STEP Taskforce works, hand in hand, with the 27 EU Member States. The STEP Taskforce regularly engages with project promoters, managing authorities and relevant associations to improve the set-up and understand their investment needs. Extensive outreach and a dedicated survey answered by some 500 research and industry organisations confirmed the strong demand for simplification of access to EU funding.
Building on the success of STEP, President von der Leyen suggested, in her letter to EU Leaders ahead of the special European Council on 6 March, that STEP could be further leveraged by enlarging its scope to all technologies relevant for the defence sector.
Improved and streamlined access to funding opportunities
The STEP Portal provides a one-stop, user-centric platform for project promoters to access all STEP funding opportunities across EU programmes and Member States. About 60 calls for proposals at EU and national levels have been published so far and about 40 of them remain open for submission.
Promoting high-potential EU projects for better access to funding
The STEP Portal currently showcases the first 142 high potential projects that have been awarded the STEP Seal by the Commission. The project promoters are informed about funding opportunities as well as advisory services while their projects are made visible to private and public investors, including implementing partners like the European Investment Bank (EIB) Group or National Promotional Banks.
Some prominent examples of STEP Seals awarded by the Commission in 23 Member States by the Commission include:

Digital tech: OpenEuroLLM will bring together EU startups, research labs and supercomputing hosting entities from all over the EU to train the first-ever family of open-source Large Language Models for artificial intelligence covering all official and future EU languages.

Clean tech: Energy Observer 2 in France and the Netherlands will be the world’s first hydrogen-powered cargo ship, featuring advanced cryogenic tanks for the storage of hydrogen and fuel cell technology to cut maritime freight emissions by 98%.

Bio tech: PHARMSD 3.0 of Portugal aims at setting a new standard for continuous pharmaceutical manufacturing with the optimisation of spray drying, a method that turns liquid drug formulations into stable powders.

STEP seeks to leverage and de-risk private investment for EU high-potential projects. The STEP Taskforce is reaching out to private investors to promote STEP Seals projects, increasing their visibility and identifying investments paths.
Next steps in 2025
STEP’s positive momentum is expected to strengthen in 2025 with the support of Member States for the success of innovative projects and the reduction of dependencies in strategic technologies. Member States are encouraged to leverage STEP opportunities under NextGenerationEU/ Recovery and Resilience Fund. They can reallocate resources to STEP-labeled projects and transfer up to 6% of their RRF envelope to their national compartment in InvestEU to fund these projects.
Background
STEP was established by the EU Regulation in March 2024, as part of the mid-term review of the MFF. 
As part of the work on the interim evaluation of STEP, the Commission will gather evidence and feedback through a call for evidence that will be launched on Have your Say in the coming days and will stay open for contributions for four weeks.
STEP will be promoted at several events in the coming months. To stay updated, you can subscribe to the STEP Newsletter and check the press and media section of the STEP Portal.
 
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Smart policies that help people realize their potential can be game-changing for entire societies
Every great leap in human progress—from the printing press to the steam engine to the semiconductor—has been driven by ideas. But ideas do not emerge in a vacuum; they come from people. And among them, it is often the most talented minds that push the boundaries of what is possible.
This makes talent one of the world’s most valuable resources that can drive innovation and growth. Countries that develop the best minds gain a competitive edge. Those that fail to do so don’t just slow their own progress—the world loses, too. Every untapped genius is a discovery that never happens, a technology that never emerges, a field that never takes off. The next transformative idea—a cure for a disease, a revolutionary technology—could come from anywhere. But only if the right minds are given an opportunity to reach their full potential. The newest issue of Finance & Development explores the economics of talent.
Societies have a strong interest in expanding opportunities for people to become scientists, inventors, and entrepreneurs. Ruchir Agarwal and Patrick Gaule examine what they call the missing equation: how best to identify, nurture, and empower young geniuses, particularly in science, technology, engineering, and math. Overlooking even one talented individual can mean sacrificing insights that could transform entire fields. Too often, developing economies fail to spot their top talent early, allowing potential to go untapped.
Consider Tabata Amaral, a child prodigy from Brazil whose rise—from a modest background to become a leading voice in policy—was made possible by public school math Olympiads. “If I’m here,” she says, “it’s because of those competitions.” Her case is all too rare. Across the world, latent talent often remains undiscovered—not for lack of ability but for lack of opportunity.
The data illustrate this reality. Research by Xavier Jaravel of the London School of Economics and his colleagues shows that access to education, family income, and social networks shape who becomes an inventor. Many children have the ability but lack the circumstances to realize their potential. The economic cost of this untapped talent is staggering. If gifted youth worldwide had equal access to the resources needed to develop their potential, global scientific output could rise dramatically, benefiting everyone.
Artificial intelligence adds a new dimension to this challenge. As IMF economist Marina Tavares notes, AI could either amplify human potential or shrink the space for innovation. If used wisely, it could empower talent at an unprecedented scale. If mismanaged, it could concentrate power in fewer hands and limit creative breakthroughs.
Meanwhile, Harvard University’s William Kerr argues that countries adept at attracting and retaining top performers will be better positioned to counter demographic pressures such as aging populations and slowing productivity growth. The global race for talent is not just about finding the brightest minds—it is about securing the economic future.
Identifying standout individuals—especially in disadvantaged communities—is crucial. But so is expanding access to education. Strengthening secondary and postsecondary education, equipping youth with vocational skills, and fostering environments that nurture creativity and problem-solving can also help reduce inequality of opportunity.
The economics of talent is an emerging field, but one thing is clear: Smart policies that help people realize their potential can change the game for entire societies. We hope the articles in this issue will spark new thinking among policymakers and leaders. By shining a light on talent, we aim to inspire real progress where it matters most: expanding human ingenuity to solve the defining challenges of our time.
To read the full issue, click here (PDF).
 
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