[serious] Perché l’UE è in stagnazione e cosa si potrebbe/dovrebbe fare? (fonte dati: Banca Mondiale)
https://i.redd.it/x9nz3846tdqd1.png
di DrMelbourne
[serious] Perché l’UE è in stagnazione e cosa si potrebbe/dovrebbe fare? (fonte dati: Banca Mondiale)
https://i.redd.it/x9nz3846tdqd1.png
di DrMelbourne
49 commenti
Mario draghi explained what needs to bo done. So exactly what has not been done in the past.
because everybody is throwing money on american stocks.
I would invite you to look at the same graph inflation adjusted. Also adjusted for the workforce. If I find it I will publish it. Anyway as a rough gist you have USA inflation significantly higher than EU, and this drive USA GDP up, and EU workforce shrinking while USA isn’t. Please note I expect both these effects to be significant and reduce the difference but not to change the sign or even approach it to 0
A lot of things to explain.
1. Measures are shown in current USD level. In 2008 you could buy 1,5 dollar for every euro, now 1,1.
2. EU Companies didn’t adjust since 2008 so well.
Mario Draghi specifically called the solutions. Merger of the major companies, stock exchanges and less regulations. For me the major problem is the capital collections in Europe. We have 14 major stock exchanges where as US have only 2. I hate EU commission for blocking merger of German Stock Exchange and British stock exchange. Just imagine to have a list where Shell, Volkswagen, HBSC and SAP are in one place. That would be a game changer.
Hopefuly EuroCTP (which is a consolidation tape for our stock exchanges) started in 2023 and is projected to be ready in 2025.
The Euro area is behind the USA in GDP per capita change but not by much. You should use the GDP PPP for better comparison.
Maybe we should try regulating more. Like banning stagnation?
Social policies, regulations for businesses.
The EU missed an entire ecosystem with big tech, Look at the Apples, Nvidias, Microsofts, Alphabets, Metas, even Amazon with his AWS service…
The entire technology sector which makes up our everyday life works without meaningful European input. Yes, yes, we have the hidden champions and “the suppliers who supply the customers” and whatever, but we are nearly 20 years in post web revolution and see it no longer works as an argument.
Now we have reached a point where this industry has developed their own sub-industries (think about the entire gig-economy) and branched out industries (AI).
The US is willing to throw an obscene amount of money at new markets. The EU fails to even get the barebone fiscal union starting. We are just starting to see the decline of the EU. Things will get much worse, due to the issue of no unified policy also holds true for several other aspects (geopolitics, foreign policy, military, migration and security…).
We, as in our generation of the 20-45 year olds or so, will be able to witness the decline but not really be all too affected by it (same with climate crisis), as we can eat well from the more or less heavy substance of previous generations.
But the young europeans who grow up now? We may see others overtake us and decline, but they will never know something different. A lost generation.
Explain first why that is bad. And I rather have strong public institutions then rich tech companies
You should verify the same data, but with ”Constant 2015 dollars” so we can take inflation into consideration:
[https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?locations=US-EU](https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?locations=US-EU)
the results are quite the same, though.
Looking at current US$ you are also counting inflation. That’s why USA exploded since 2020, with 27% growth. If you use constant US$ their GDP only increased by ~9% – [https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?end=2023&locations=XC-US&start=2008](https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?end=2023&locations=XC-US&start=2008)
Maybe we need more regulation to hamper the industry even more.
The countries with low debt to gdp need to spend more. 80-90% debt to GDP is reasonable. Apart from that, we need our own tech sector. This is the growth motor of the US economy. There are several ideas to achieve this: Capital markets union, allowing state health- and pension insurances to invest in venture capital, an EU stock exchange for start ups, protectionistic measures against US and Chinese tech giants to give young companies space to grow, an “ESA for AI” which is supposed to develop foundation models that are then commercialized by EU companies
Americans are more die hard in their believe about growth/profit over everything else. European countries tend to also find human lives important
reduce regulation and buerocracy, get a common eu stock market to attract private investment capital. pause deeper integration for some years (except where necessary to achieve economic goals)
More tax /s
How long have you got?
Simple answer is: divergent economic models and a single currency – that’s the quick answer.
Find oil
It is simple. All the biggest cutting edge tech companies are American.
Eu doesn’t have that luxury. We have many bad business decision examples why. For example Nokia sold out and messed up their phone industry when smartphones were just coming out. Nokia even had the first touchscreen phone prototype if i remember right. The ceo at the time didn’t believe in the tech.
Also we have not invested heavily into semiconductors much at all just yet, so far EU has been much more into traditional tech and industries.
we just don’t have the same startup and innovation as the US, major tech companies: apple, amazon, netflix, etc are mostly american. European inventors leave the EU for the USA [(page 91)](https://www.aeaweb.org/articles?id=10.1257/jep.30.4.83) . Why this is the case? i don’t necessarily know, possibly over-regulation in the EU, possibly lack of finance available in the EU, part of it may also be cultural, the USA might just have a more ‘risk taking’ culture when it comes to business.
Secondly is language and immigration. The reality is that a huge portion of the world ( despite what you may see) would give up everything to move to the USA, this means that the US can basically choose it’s immigrants, and pick the extremely wealthy and educated ones ( who are also educated in english) meanwhile learning a language like Dutch, German, Swedish, etc is pretty uncommon in a lot of countries outside of the EU, all immigrants which know a european language typically know english so they’d rather just move to an english speaking country.
Another reason i can think of, which ties into the first point is culture. When someone immigrates to the USA they know if they mess up welfare probably won’t save them, the US is still viewed as the land of opportunity, and the place where anyone can start a business and grow their wealth, which probably means the goals of immigrants coming into the usa is a lot different than ones immigrating to europe. Whilst the majority of immigration is beneficial, some ones are more so than others.
Birthrates
I believe if you adjust for PPP (purchasing power), the lines are a lot closer.
US has a common language, regulation, common stock markets, oil, gas and so on..
The graph is a bit misleading because it looks at USD, but exchange rates changed significantly in that time frame. If you look at PPP, it looks very different: https://ourworldindata.org/grapher/gdp-per-capita-worldbank?tab=chart&stackMode=relative&time=2010..latest&country=USA~OWID_EU27
EU create regulations for AI, US create AI, you see the difference?
Just a heads up. Just because ‘average’ goes up it doesn’t mean all benefit. And literally higher income doesn’t mean better as cost can outpace income gain
Not to mention actual quality of life
Plus, USA is gaining population much faster so growth has to be leveraged against other factors.
print more money, start to touch domestic resources on a much bigger level, complete the capital markets union
I think because we reached our capacity in many areas (land, population, natural resources)
However, I really like Mario draghi solution on focusing on tech (part of his solution)
The workforce can work from home, doesn’t need raw resources, and etc. So I think it’s the best area for EU to focus on.
The biggest problems are very difficult to solve:
1. The EU is not as much of a single market compared to the US, due to different languages, governments, regulations etc. This makes it much easier for US companies (particularly tech companies) to quickly scale up in the US internal market, and therefore establish dominance.
2. Energy costs are much higher in the EU, because it doesn’t have the oil and gas reserves of the US (and Russian gas has been rejected / cut off).
3. Partly as a result of 1, the EU has almost completely missed out on the tech sector / internet economy with all the big companies being American. Other reasons for this include much more venture capital in the US, the environment of Silicon Valley, the wealth of US universities, and potentially more relaxed regulations.
4. The US government has far more money to stimulate / prop up the US economy, thanks to the US dollar being the global reserve currency.
5. The argument made by libertarian conservatives: the US has lower taxes and more business-friendly regulations (relaxed environmental rules, less worker protections, etc.) I’m less sure about this but it may play a role.
6. Problems compounding. Once the EU falls behind the US it is very hard to catch up, as US companies have achieved dominance and the EU has less money to invest / is less attractive to investment and start ups.
I really see little hope of fixing these problems.
The EU could take up irresponsibly high loans to ruin the lifes of future generations.
The EU first and foremost needs a central bank, a proper common market where cross border investment is simplified and a proper stock exchange.
As long as the euro area lacks a lender of last resort remains even more fragmented than it was before 2008 and has multiple “major” stock exchanges it will never compete with the US or China.
Draghi can recommend any bandaid fixes he likes with in the existing framework but none of these will repair the built-in structural weakness of the EU market.
Aren’t americans degenerate gamblers though ? They have a massive debt to China. And even with that they still shove everything into the future. Like sure, everything will work out fine. You just have to believe in yourself.
Disastrous US proxy wars. We’ve lost cheap energy and cheap raw materials, were flooded with refugees and major contributors like Germany are now deindustrializing.
EU used to be in parity with US before 2008. How you handle financial crisis really matters.
We’ve just agreed to spend 0.25% of nations PIB to buy weapons from the USA 😀
EU regulations is killing businesses, it is also not providing any funding to the small businesses there claim they are trying to foster. It is a little frustrating
Stop being the vassal of the US, fighting their imperial conflicts against European interest.
Europe = mostly Germany
All we need to do is to replace the german government with some monkeys. At least this way we give the German economy a chance to recover.
One significant factor is also the population growth, most european countries are experiencing significant overaging.
EU should accept Ukraine in the EU. That will show those yankees!
If you want to compare with an actual federation…well…moreover, we could always bet on less regulations all around, less of a safety net all around, huge investments in the military (which boosts high value industry), etc, etc. Somehow I don’t think that’s what the average European wants (and neither do I to be clear).
Have more babies. Europe has a rapidly aging population meaning an every increasing proportion of people are unproductive. Immigration can offset this but Europe imports too many unproductive migrants, and all the very productive ones go to the USA because the salaries are 4x higher.
Stop putting tech companies and factories in random boring cities with shit weather. Build silicon valley in Malaga.
Tech, tech, tech and once more TECH.
Learn from each other. We don’t need to copy USA, there are plenty of strong innovative regions in EU to learn from.
And also don’t forget the see-sawing Euro Dollar exchange rate. Add 10 % value to the Euro and suddenly that graph looks completely different
a Union born of noble political goals
often accused of neo colonialism
unable to break its economic stagnation for decades
with its population increasingly drawn to right wing movements some of whom argue for Union’s dissolution
man this is early ’80s all over again, why’s real life so unoriginal all the time
Excessive welfare spending and strangling itself in red tape.
Europe is so regulated that it hurts enterprising.
All can be fixed by one word: Federalization
Majority of our economic problems come from the complexity of business in EU and all of it’s different regulations in each different EU member and artificial barriers blocking integration like Schengen and Eurozone. This also applies for almost all social sectors. One Federation, one army, one main connecting language, one currency, no borders, federal control on all levels in all federal states.
The Eurozone is stagnating, not the EU. Look at Denmark or Poland.