The project of a united Europe is approaching a critical point, Bloomberg estimates. Political unrest, external threats and economic difficulties may stand in the way of making the European Union a global power. The countries that make up the Community fiercely defend their own interests, ignoring alarming forecasts about the declining position of the Old Continent.
“Although for decades experts have been warning about the European Union's weakening position and declining economic growth, it is only now that European leaders are faced with such irrefutable evidence that the disaster can no longer be stopped,” writes Bloomberg.
Troubles of the Old Continent
According to the agency, the problems of the Old Continent are a good illustration of the political turmoil in Europe France and the successes of the local far right.
The American website also notes that the largest German car manufacturer, Volkswagen, is considering closing its factory in the country for the first time, and American technology giants are turning away from the European market due to new restrictions on artificial intelligence.
“All these events demonstrate the failure of the European Union to create a coherent and dynamic economic bloc. Europe's current condition significantly worsens its ability to respond to a wide range of threats, from Chinese industrial policy to Russian military aggression. Effectiveness in relations with a potential future is also questionable. , a less friendly administration in the United States,” we read.
Giving up the fight
Bloomberg cites the former prime minister's report Italian and the head of the European Central Bank, Mario Draghi, in which the politician drew attention to the need to overcome economic stagnation in the EU. Draghi emphasized that Europe “needs investments comparable to the Marshall Plan and much more innovation.” He also drew attention to the alarming state of demography.
“The recent apathetic response to Draghi's appeal shows that the region has almost given up on taking up the gauntlet,” Bloomberg says.
– If you want to be a geopolitical power, you must also be an economic power – comments Guntram Wolff, professor at the University of Brussels and employee of the Bruegel think tank, in an interview with Bloomberg. – The level of productivity growth is catastrophic. Europe is still rich, but the slowdown over 20 years has had huge consequences, he adds.
“We are too slow”
“The world is struggling with fundamental crises, including climate and demographic crises, and is facing radical economic changes. In the case of all these challenges, Europe's readiness to respond is delayed,” notes Bloomberg.
“The region's geopolitical rivals are trying to use these changes to their advantage. Meanwhile, the largest EU economies are burdened with ineffective economic models that have not produced promising results for too long,” the agency adds.
– Something is changing very dramatically in this world – said the former president of Poland, quoted by Bloomberg Aleksander Kwaśniewski. – We are not able to react to it properly, we are too slow – he pointed out.
Emmanuel Macron and Olaf ScholzPAP/EPA/CLEMENS BILAN
“State of Emergency”
– This is a state of emergency – admitted the French president at the beginning of October Emmanuel Macron during the conference in Berlin. – If we do not change our actions, we will go out of business in the next two or three years. I have no doubt about it, he warned.
European leaders view with concern the continent's dependence on Chinese economygrowing even despite increasingly fierce disputes with Beijing.
Macron argued that the loss of cheap Russian raw materials since the invasion Ukrainethe emergence of the president's aggressive, heavily subsidized industrial policy USA Joe Biden mean the need to break with the old model that allowed for export-based development.
“Existential challenge” facing Europe
“Europe is in danger,” said David Galbraith, a technology entrepreneur and investor who has worked on both sides of the Atlantic during his career and sees the world economy as undergoing an industrial revolution-like transformation.
“Let's look at what happened to the countries that failed to industrialize,” he said. “They weren't doing very well,” he said.
The effects could go beyond simple delays in investment and productivity: leaders will lose faith in the European project. It's not just about Eurosceptics like the Prime Minister Hungarian Viktor Orbán. Officials in major European countries are beginning to see the EU as an obstacle they must get past – rather than the source of prosperity and protection it has represented.
French officials talk about deepening integration with a smaller group of countries outside the Community due to long-standing opposition from Germany. Polish officials cite similar defense initiatives, Bloomberg notes.
“The foundations on which we have built are at risk,” Draghi wrote in the introduction to his report. “It's an existential challenge,” he added.
His key recommendations to use the EU's financial power through greater joint debt issuance were rejected by Germans reluctant to share greater risks with other member states. Other priorities, such as the creation of a common capital market, have not yet gained momentum.
The report has been largely rejected for now, leaving some policymakers concerned that time is quickly running out to take action in the region.
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