Monday

20th Mar 2023

EU economy 20 years behind US, study says

The EU is 22 years behind the US on economic growth according to a new study, with several other economic indicators showing further gaps despite Europe's ambitious reform agenda to be praised by leaders at this week's summit.

A report by Eurochambers, the Brussels-based business lobby, published on Monday (5 March) argues that the US reached the current EU rate of GDP per capita in 1985 and its levels in employment and research investment almost 30 years ago.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • The US reached EU levels in jobs and investment in research almost thirty years ago, the study says (Photo: Wikipedia)

Economic growth, jobs and innovation feature as top priorities of the so-called Lisbon Agenda - agreed by EU leaders in 2000 - with the original aim for Europe to become the most competitive economy by 2010 and with the US seen as its key competitor.

However, according to the Eurochambers study, the EU time lag behind the US has expanded further since 2003 when the group published its first report comparing the economic indicators on both sides of the Atlantic.

Part of the reason is that the previous analysis was based on figures from the "old" EU member states while countries that joined in 2004 record quite significant growth rates but worse figures on employment and mainly on investment in knowledge economies.

Authors of the study point out that if calculations included the latest newcomers of Bulgaria and Romania, the gap between the EU and US would be even larger, adding "The European Council must take the size of this lag into account when making its decisions."

This week's gathering of the European Council - heads of states and governments plus the European Commission president - is expected to conclude that the Lisbon strategy "is beginning to deliver results" according to draft summit conclusions.

The document highlights "7 million new jobs created during the 2007/2008 period, leading to a potential increase in the employment rate from just under 64 percent in 2005 to nearly 66 percent by 2008 and a falling unemployment rate" in the EU.

However, in a bid to start catching up with the US on key Lisbon indicators, Europe would have to perform better than the States, according to the Eurochambers study, while the latest results show the opposite: in 2006, the US registered an average GDP growth of 3.3 percent and the EU about 2.9 percent, the highest since 2000.

"If income (GDP per capita) would grow in the US at 2 percent per year and in the EU at 3 percent per year, meaning a 1 percent higher growth of the EU, the EU would catch up with the US around 2045" the authors of the report concluded.

EU closer to reaching job goals, think-tanks say

Two independent studies suggest the EU is getting closer to its job and growth targets although productivity and spending on research remain problematic, with Denmark and the Netherlands praised as "heroes" and Poland and Greece as "villains" of the EU's reform efforts.

EU launches critical raw materials act

The EU presented its strategy to ensure access to critical raw materials needed for clean technologies. No country should supply more than 65 percent of any key material. Currently, China dominates almost all rare earth metal markets.

'The race is on', EU Commission warns on green tech

The EU Commission is expected to detail its plans on Thursday as part of the Net-Zero Industry Act on industrial incentives, and the Critical Raw Materials Act, which seeks to reduce EU over-reliance on China.

Looser EU fiscal rules agreed, with 'country-specific' flexibility

EU finance ministers agreed on new spending rules, copying much of previously existing rules. One worry is that only three countries — Sweden, Denmark and Luxembourg — could currently afford to meet green commitments while meeting debt and deficit rules.

Opinion

Corporate lobbying and the delay of the EU's Reach directive

The European Commission has delayed publishing its proposal to revise the Reach regulation, a key part of the European Green Deal's chemicals strategy. Centre-right political pressure, backed up by corporate lobbying, seems to have been behind the decision to delay.

Latest News

  1. 'Forever chemicals' industry hit by perfect storm
  2. EU summit zooms in on global roles This WEEK
  3. EU launches 'Hydrogen Bank' — but what is it?
  4. MEPs probing spyware 'stonewalled' by EU states
  5. Why the EU double standards on mental help for asylum seekers?
  6. 'Bravery has no gender', Ukrainian Nobel winner says
  7. Innovation and politics: an intertwined relationship
  8. Most Frontex deportations to take place from Germany, Italy

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  2. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  3. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  4. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality
  5. Promote UkraineInvitation to the National Demonstration in solidarity with Ukraine on 25.02.2023
  6. Azerbaijan Embassy9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting

Join EUobserver

Support quality EU news

Join us