Friday

3rd Feb 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.

Hawkish ECB rate-rise 'puts energy transition at risk'

The European Central Bank raised interest rates by another 0.5 percent to a 14-year high, and expects to hike rates by another half percent in March. But what does that mean for the green transition?

Polish backpedal on windfarms put EU funds at risk

Draft legislation in Poland aimed at relaxing some of Europe's strictest laws surrounding onshore wind-turbines has been derailed by a surprise last minute amendment, which could put Poland back on a collision course with the EU.

Opinion

More money, more problems in EU answer to US green subsidies

Industrial energy-intense sectors, outside Germany and France, will not move to the US. They will go bust, as they cannot compete in a fragmented single market. So to save industry in two member states, we will kill the rest?

Latest News

  1. MEPs launch anonymous drop-box for shady lobbying secrets
  2. Hawkish ECB rate-rise 'puts energy transition at risk'
  3. MEPs push for greater powers for workers' councils
  4. How Pavel won big as new Czech president — and why it matters
  5. French official to take on Islamophobia in EU
  6. EU green industry plan could spark 'dangerous subsidy race'
  7. Wolves should be defended, EU ministers urge
  8. EU Commission wants drones for Bulgaria on Turkey border

Stakeholders' Highlights

  1. Party of the European LeftJOB ALERT - Seeking a Communications Manager (FT) for our Brussels office!
  2. European Parliamentary Forum for Sexual & Reproductive Rights (EPF)Launch of the EPF Contraception Policy Atlas Europe 2023. 8th February. Register now.
  3. Europan Patent OfficeHydrogen patents for a clean energy future: A global trend analysis of innovation along hydrogen value chains
  4. Forum EuropeConnecting the World from the Skies calls for global cooperation in NTN rollout
  5. EFBWWCouncil issues disappointing position ignoring the threats posed by asbestos
  6. Nordic Council of MinistersLarge Nordic youth delegation at COP15 biodiversity summit in Montreal

Join EUobserver

Support quality EU news

Join us