The European Green Deal and its Impact on the Economy of the European Union

Abstract

The European Green Deal is the European Union’s central framework for linking climate action with long-term economic transformation. Introduced in 2019, it sets out to reshape the EU into a climate-neutral, resource-efficient, and more resilient economy by 2050. This paper examines how that agenda affects the EU economy, with particular attention to renewable energy, industry, agriculture, the circular economy, and pollution control (Fetting, 2020). The analysis uses academic studies together with official EU documents in order to interpret the economic changes associated with the Green Deal. The literature suggests that decarbonization depends heavily on cleaner energy systems and lower-emission production models, but also on substantial capital investment and institutional adjustment across multiple sectors. Overall, the Green Deal appears to create both economic promise and policy strain. It can stimulate innovation, support new employment opportunities, and strengthen competitiveness in emerging green industries, yet it also places pressure on traditional sectors, public budgets, energy prices, and labor-market adjustment processes. UDC: [504.06:338.2]:061.1EU; JEL: Q56, Q58, O44