Falling behind
Sep 20, 2024
Europe faces a growing competitiveness problem, lagging behind the United States and China economically. Structural challenges such as over-regulation, a lack of innovation and entrepreneurship, high taxes, and fragmented national political agendas are causing European companies to fall even further behind in terms of profitability. For example, Germany’s automotive industry is in a state of decline and the Wirtschaftswunder suffers inter alia from flawed energy policies. Last week, Mario Draghi, the former ECB president, presented an extensive report outlining proposals to address these issues, primarily through coordinated economic, industrial, and security policies at the EU level. The hope now is that these recommendations are swiftly implemented.
