In 2021，with the overall relief of the local epidemic in Europe，coupled with the influence of positive factors such as the rapid promotion of COVID-19 vaccination，the gradual recovery of the global supply chain，and the implementation of the “Next Generation EU” plan，the European economy has achieved a relatively strong recovery. Affected by factors such as tight supply chains and soaring energy prices，the economic growth of the EU and major European countries in 2021 showed a trend of “first high and then low”. The sharp rise in inflation has become a new problem encountered by the European economy，which may prompt the ECB to moderately adjust its monetary policy in 2022. Continued accommodative fiscal policies have resulted in high public deficits and debts in the EU and major European countries；therefore，maintaining fiscal discipline in the future will become a long-term challenge. The “Next Generation EU” Fund is an innovative measure invented by the EU to promote post-pandemic economic recovery. Overall，its financing and using are progressing steadily as originally planned. In terms of monetary and financial system，in 2021，the EU’s new measures to promote the development of capital markets and strengthen the supervision of the financial system as well as the new trends of the British financial system after Brexit deserve attention. Finally，this article also sorts out and analyzes the important progress of the EU in promoting“twin transition”，i.e.，green and digital transitions，in 2021.