Europe is a continent with a long, violent history. Since it’s already there it never occurred to me that it would need a “reason for being.”
The EU has 27 member states and has a 5-year strategic agenda.
https://www.consilium.europa.eu/en/policies/strategic-agenda-2024-2029/
Mario Draghi, a former president of the European Central Bank, is warning that Europe could lose its reason for being if they don’t invest massively to maintain competitiveness with the U.S. and China.
https://www.nytimes.com/2024/09/09/business/europe-economy-competitiveness.html
Europe’s ‘Reason for Being’ at Risk as Competitiveness Wanes, Report Warns
The European Union, facing a shrinking share of the global economy, needs to increase its spending by nearly $900 billion a year, according to a long-awaited report from Mario Draghi.
By Jenny Gross and Patricia Cohen, The New York Times, Sept. 9, 2024
Europe must increase public investment by nearly $900 billion a year in sectors like technology and defense, according to a long-awaited report published Monday in response to growing anxieties about the continent’s economy lagging behind that of the United States and China.
The challenge for the European Union is “existential,” Mario Draghi, a former president of the European Central Bank, said on Monday in Brussels. If Europe cannot effectively compete and, in turn, provide its people with security and prosperity, he said, “it will have lost its reason for being.”…
Mr. Draghi said that, to meet the objectives in his report, the European Union needed additional annual investment of up to 800 billion euros ($884 billion), an amount equivalent to about 4.5 percent of the European Union’s gross domestic product last year. …
The gap in gross domestic product between the European Union’s 27 members and the United States, adjusted for inflation, has widened to 30 percent in 2023 at 2015 prices, from just over 15 percent in 2002, mostly driven by lower productivity in Europe… [end quote]
The EU has about 450 million people as opposed to 335 million in the U.S. But the Europeans work less than Americans so their productivity is lower.
In comparison to the 4.5% of EU GDP that Mr. Draghi is proposing, the U.S. bipartisan Infrastructure Investment and Jobs Act provides for $1.2 trillion in spending to be allocated over the next five years. That’s $24 billion per year for 5 years. U.S. GDP is currently $28.7 trillion. That would make the spending less than 0.1% of GDP annually.
Given Europe’s slowing economy, especially Germany which has been the engine of the EU, it’s going to be hard to raise the huge amount of money needed.
Europe’s reason for being will have to change as the economic screws tighten. Expect major unrest since the European population has been indulged for generations.
Wendy
