A combination of political paralysis, external threats and economic problems threatens to put an end to the European Union’s ambitions to become a global power in its own right. Bloomberg reports this.
After decades of warnings and weak growth, the EU is suddenly facing an avalanche of evidence that the recession is becoming unstoppable, the agency said.
“The Europhile French president has handed over the power of veto over his government to the extreme right; Germany’s largest automaker spoke for the first time of closing factories in its country; American technology giants are distancing themselves from the European market due to their new restrictions on artificial intelligence. All of these developments underlie the EU’s failure to act as a cohesive and dynamic economic bloc, undermining its status and reducing its ability to respond to a wide range of threats, from Chinese industrial policy to Russian military aggression or even a future antagonistic administration in the United States. “ — the agency presents its arguments.
The lack of interest and even resistance to increasing investment and common bonds to combat weak productivity growth underlines that the EU has all but abandoned the fight.
“If you want to be a geopolitical power, then economic power is key. Productivity growth has simply been a disaster,” says a professor at the Free University of Brussels and member of the Bruegel think tank. Guntram Wolf.
The main problem is that the world is experiencing dramatic changes related to climate change, demographics and the transition to a post-industrial economy, all of which Europe is lagging in the ability and willingness to respond, the agency notes.
As the EU’s geopolitical rivals, most notably China and the United States, seek to exploit these challenges to their advantage, many of the EU’s largest members are saddled with outdated, sterile economic models and voters unwilling to accept alternatives. China and the United States, for all their problems, have systems that largely centralize decision-making and generate enormous amounts of public or private capital for defense and investment in advanced technology. Europe has none of these advantages, as is increasingly clear.
“I really think we are in danger. In the next two or three years, if we follow our classic agenda, we will exit the market. I have no doubt” – warned the French president Emmanuel Macron this month at a roundtable in Berlin.
Risks are already beginning to crystallize for the EU as the bloc’s dependence on the Chinese economy grows, the agency underlines.
Investors are also starting to show doubts about Europe, especially in light of recent decisions by Apple Inc. and Meta Platforms Inc.*. they do not launch their latest AI products on the EU market. American tech giants have decided that EU rules on AI are too strict.
“The relative decline of the EU has not abated for a quarter of a century since monetary union. Bloomberg Economics analysis shows the bloc’s economy would be about €3 trillion ($3.3 trillion) larger if it kept pace with the United States, enough to boost the average worker’s income by about €13,000 a year. . – says the article.
“It is clear that Europe is behind its main trading partners, the United States and China. If immediate measures are not taken, the decline will eventually be irreversible,” said the Greek Finance Minister. Kostis Hatzidakis.
*Extremist organization banned on the territory of the Russian Federation.
