For almost twenty years, Europe has been falling behind \u2014 not as the result of a temporary cyclical shock, but as the outcome of a cumulative and structural process. The comparison with the United States is now unambiguous: while the U.S. economy regained a sustained growth trajectory after the 2008 financial crisis, Europe appears stuck in a regime of persistently low growth, with lasting economic, social, and geopolitical consequences.<\/p>\n\n\n\n
Since the global financial crisis, real U.S. GDP has grown at a markedly faster pace than that of the European Union. As a result, the American economy has expanded roughly twice as fast as Europe\u2019s over the period, creating a gap of more than 20 percentage points in GDP.<\/p>\n\n\n\n
Growth is not merely an economic variable. It determines fiscal capacity, investment in research, defense, and infrastructure \u2014 and therefore, in the long run, global power itself: the ability to protect living standards and uphold one\u2019s values.<\/p>\n\n\n\n
A Growing Productivity Divide<\/p>\n\n\n\n
The divergence is also visible in GDP per capita. In the early 2000s, Europe stood close to U.S. levels. By 2024, GDP per capita in purchasing power parity terms reached roughly $75,000 in the United States, compared with around $55,000 in the European Union. This gap no longer stems primarily from differences in hours worked, which have remained broadly stable over the past two decades, but from a widening disparity in productive efficiency.<\/p>\n\n\n\n
At the heart of Europe\u2019s challenge lies insufficient productivity growth \u2014 more specifically, weak total factor productivity gains. These depend on incentives to innovate and take risks, on competitive market structures, and on the capacity to allow new firms to emerge while less efficient ones exit. In other words, on enabling \u201ccreative destruction\u201d in the Schumpeterian sense, as formalized in modern growth theory.<\/p>\n\n\n\n
Europe has suffered from a chronic deficit in these areas. Since the late 1990s, productivity growth has been significantly lower than in the United States, often close to zero in the euro area.<\/p>\n\n\n\n
Innovation tends to be incremental rather than radical; markets remain fragmented; scale effects are limited; and incentives for risk-taking are insufficient.<\/p>\n\n\n\n
The weakness of venture capital \u2014 particularly at the scale-up stage \u2014 combined with burdensome regulation and penalizing tax structures, leads many European start-ups either to sell prematurely or relocate abroad, fueling a silent outflow of technology and talent.<\/p>\n\n\n\n
Structural Handicaps<\/p>\n\n\n\n
These weaknesses are compounded by structural constraints: energy dependence, persistently higher energy prices than in the United States, critical dependence on rare earths, and chronic underinvestment in defense and key technologies.<\/p>\n\n\n\n
The illusion of European \u201cnormative power\u201d \u2014 the idea that Europe can shape global standards without sufficient industrial and technological leadership \u2014 collides with reality: standards ultimately follow market power.<\/p>\n\n\n\n
The remedies are well known. They require acting more collectively and more swiftly. Institutional governance is at stake. They involve deepening the single market, particularly in capital, energy, and digital sectors; massively reducing intra-European regulatory barriers; and pursuing a more ambitious and risk-embracing innovation policy.<\/p>\n\n\n\n
They also require faster reallocation of resources toward the most productive firms, greater labor mobility, and a decade-long investment effort spanning climate transition, defense, energy, and critical technologies \u2014 alongside a substantial upgrade in education and skills.<\/p>\n\n\n\n
Ultimately, the issue is not merely economic; it is political. Without stronger and more durable growth \u2014 and therefore without the structural reforms that make it possible \u2014 neither Europe\u2019s social model nor its ability to shape the global order can be preserved.<\/p>\n","protected":false},"excerpt":{"rendered":"
For almost twenty years, Europe has been falling behind \u2014 not as the result of a temporary cyclical shock, but as the outcome of a cumulative and structural process. The comparison with the United States is now unambiguous: while the U.S. economy regained a sustained growth trajectory after the 2008 financial crisis, Europe appears stuck […]<\/p>\n","protected":false},"author":1,"featured_media":10116,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[137,133,136],"tags":[],"class_list":["post-10248","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-conjoncture-en","category-economical-and-financial-crisis","category-economical-policy"],"acf":[],"yoast_head":"\n