why the European economy has been declining for forty years

The President of the European Commission, Ursula von der Leyen, in Brussels on September 8.

Economically, Europe is winning. It is not an opinion, but an objectively measurable fact. In 1981, the United States and the nineteen countries which today constitute the euro zone each accounted for 21% of the world economy; almost forty years later, their share has risen to 16% and 12% respectively. During the same time, China’s weight jumped from 2% to 18%. That the Middle Empire, with 1.4 billion inhabitants, has passed in front, is largely a logical catch-up. Europe’s decline, on the other hand, has been much faster than that of the United States.

Economists are almost unanimous on the finding. “On the diagnosis, there is no photo”, regrets Gilles Moëc, chief economist at Axa. “From 2008 to 2019, US growth was 1.85% per year, that of the euro area 0.82%, about half as much”, specifies Eric Dor, director of economic research at the Iéseg business school.

The dropout, which had eased in the 2000s, accelerated with the crisis in the euro zone from 2010. “Over the past fifteen years, Europe has struggled to bring the promised prosperity”, summarizes Clemens Fuest, president of the Munich business institute IFO.

“Third major crisis for Europe in ten years”

The pandemic risks accentuating the phenomenon. In 2020, the recession will be 3.7% in the United States, against 7.5% in the euro area, according to the Organization for Economic Co-operation and Development (OECD). Americans will have recovered by the end of 2021 to their economic level before the Covid-19 pandemic. On the European side, we will have to wait almost another year. “This is the third major crisis for Europe in ten years [après la crise financière de 2008 et celle de l’euro de 2010-2015] “, recalls Klaas Knot, the governor of the Central Bank of the Netherlands.

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We must, of course, modulate the observation: measured in gross domestic product (GDP) per capita, the European dropout remains, but it is less strong, and some states, like Germany and the Scandinavian countries, are doing better. In addition, inequalities in the United States are much higher, and life expectancy is falling there, proof of deep unease. of the American model. How to explain, despite everything, the European dropout?

The world has decided to focus on the subject for a week, in an attempt to analyze its root causes: weakening demography, sluggish innovation, construction flaws in the single currency, deindustrialisation, etc.

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