Europe is finished and only Remainers haven’t noticed9 Sep 2023 15:35
With the recent revision of the UK’s growth figures, Germany, the traditional engine of the European economy, is now the slowest-growing member of the G7. Its heavy industries have been fatally undermined by losing access to cheap Russian gas, while the EU’s obsession with electric vehicles could be about to destroy its auto industry as cheap Chinese imports batter it into submission.
The hapless Chancellor, Olaf Scholz, left to clear up Angela Merkel’s dismal legacy, has been reduced to calling for the country to pull together to overcome the “mildew of red tape, risk averseness and despondency” that may see it in a full-blown recession by the end of the year. But is anyone listening?
It is little better anywhere else. The roughly €200bn that Italy was awarded through the EU’s Coronavirus Recovery Fund, much of it borrowed money, was meant to finally reboot its economy and set it on a path to stronger growth. Somewhat predictably, it has been wasted by grandstanding politicians, while Giorgia Meloni’s creeping expansion of state control, such as price caps on air travel, or banning AI, will only condemn it to permanent stagnation.
After a few meaningful reforms, France’s President Macron has been left a lame duck for the rest of his term, having squandered all his remaining political capital on a minor tweak to the pension system. His likely heirs show no desire to tackle a welfare model that means the state consumes a vast 57pc of GDP. It has one of the biggest structural deficits, as well as one of the highest debt-to-GDP ratios, in the developed world.
Meanwhile, the EU faces major demographic decline, with 27.3 million fewer people by 2100. And divisions within the bloc mean it will never complete monetary union.
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