“A combination of political paralysis, external threats and economic malaise is threatening to end the EU's ambitions” Our Take, with Doug Sheridan
“Germany's biggest carmaker is talking about shuttering factories at home for the first time ever. US tech giants are turning their backs on the EU market because of its new restrictions on AI.”
Bloomberg writes, a combination of political paralysis, external threats and economic malaise is threatening to end the EU's ambitions to become a global force—pushing member states toward defending their own interests.
After decades of warnings and sub-par growth, the region's leaders are suddenly confronting a barrage of evidence that decline is becoming unstoppable. France's president has surrendered veto power over his gov't to the far right. Germany's biggest carmaker is talking about shuttering factories at home for the first time ever. US tech giants are turning their backs on the EU market because of its new restrictions on AI.
These developments underpin the EU's failure to act as a cohesive and dynamic economic bloc, eroding its status and degrading its capacity to respond to a wide range of threats from Chinese industrial policy to Russian military aggression.
Recent apathy or pushback by gov'ts after Mario Draghi's wake-up call for more investment and common bonds to combat feeble productivity growth underscore how the region has all but given up trying.
"If you wanted to be a geopolitical power, then economic might is the key ingredient" says Guntram Wolff, a professor at the Free University in Brussels and senior fellow at the Bruegel think tank. "Productivity growth has just been a disaster... these differentials over 20 years have massive implications."
The region's geopolitical rivals are seeking to exploit global transformations, whereas too many of the EU's biggest members are saddled with economic models that have failed to deliver for too long and restless voters who won't embrace alternatives.
"Something is changing very, very dramatically and very, very deeply in this world," former Polish President Aleksander Kwasniewski said in an interview.
The longer the current trends persist, the greater Europe's vulnerability will become. "I really believe we are at risk," French President Emmanuel Macron said earlier this month. “In the two to three years to come, if we follow our classic agenda, we will be out of the market. I have no doubt."
The result threatens to cause damage that goes beyond simply lagging in investment and productivity—the region's leaders are losing faith in the European project.
"It's obvious that Europe is falling behind its main trading partners, the US and China," Greek Finance Minister Kostis Hatzidakis said in a Sept. 24 interview. "If it doesn't take immediate action, the decline will eventually become non reversible."
Our Take 1: The EU has been the West's source reservoir for bad ideas and delusional thinking for decades, malignancies that have metastasized into feckless policy that prioritizes a non-existent green growth economy, an unwillingness to invest what it takes defend itself, and a general apathy undermining it's global competitiveness and relevance.
Our Take 2: It's been a slow motion train wreck of epic proportions... and hard to watch.
