Two years after the creation of the euro, the European Union recorded moderate but stable GDP growth, at +2.4%; the United States recorded +3.9%; and China, then experiencing an industrial boom, reached +10.1%. In 2010, after the financial crisis, European GDP rose by 2.1%, American GDP by 2.6%, and Chinese GDP by 10%. In 2016, European GDP grew by +1.8%, Chinese GDP by 6.8%, and American GDP by 1.7%. In 2024, the European Union recorded 0.8%, China between 4.5% and 5.5%, and the United States between +2.4% and +2.9%. Forecasts for 2030 maintain the same trend: China is expected to slow slightly, given the end of its boom phase (+3.3%); the United States is projected to move towards 1.8% due to the Trump administration; and Europe towards a slightly optimistic growth rate of 1.4%, in a context of post-inflation recovery and energy crisis. In a situation of growing geopolitical uncertainty, in which the European Union has lost much of its close cooperation with its historic ally, the United States, economic stability takes on an even more important role. This raises the question of how the European Union went from growth similar to that of the United States to growth that is less than half of it.

What emerges from the initial data is the European Union's continuous decline in the international market, while its competitors carve out an increasingly important position for themselves. This economic relevance goes hand in hand with geopolitical relevance, which is becoming ever more crucial in light of developments in the Middle East.

The first element that distinguishes the European Union from the other two economic superpowers is its extreme internal heterogeneity and the different levels of development between the areas of Western Europe, already historically more solid, and Central Europe, compared with Southern Europe, especially after the 2008 crisis. Before 2008, Central Europe was the region that grew the most, with an average between 4% and 6%, while Western Europe stood at around 2% and Southern Europe at 3%. After the 2008 crisis, Western Europe slowed down, reaching 1-1.8%; Southern Europe remained between 0% and 1%; and Central Europe also slowed, settling at around 3%. Finally, in recent years, all of these areas have stood between 1% and 2.5%.

This two-speed growth has a particularly significant impact at the European level. Indeed, when comparing productivity growth in China, the United States and Europe, the figure is striking: from 2005 to 2023, China grew by around 170% in terms of “GDP per hour worked”; the United States grew by between 25% and 30%; and the European Union, taking an average of the major economies, grew by only 10-15%.

The differences between the Chinese and American cases lie in the fact that China is reaching the peak of its growth, while the United States is in a phase of natural decline, although still relatively positive. Why, then, is Europe experiencing almost continuous stagnation? The two main explanations may be structural or political. Neo-functionalism, a theory widely appreciated in the 1960s and 1970s, points towards the second answer: greater European integration could foster more cohesive growth. Such a large difference between European areas does not encourage a plan of cohesion and union, because richer states will always demand more favourable, rather than equal, conditions. However, greater cohesion and economic union would strengthen all Member States and, consequently, promote stronger political cooperation and faster decision-making. This could be what the European Union needs, as it faces not only slowing growth, but also the spread of populist and nationalist parties that threaten its structure and common economic policies.
A second explanation is structural in nature: from a technological point of view, Chinese and American progress is greater than European progress; the economic structure of the Old Continent is more backward and productivity is lower due to external causes. As a result, economic growth is naturally weaker. Demography also plays a key role, since Europe records growth of only +0.2/0.3%, while the United States records +1% growth, mainly because of immigration. China is in slight decline (-0.1%), but given that its population is already more than three times that of Europe and four times that of the United States, this does not automatically imply per capita growth.

Although the situation, at this point, seems to point towards an increasingly marginal role, the Union has one major advantage over the other two states: the presence of the healthiest and most structured democracy in the world. According to V-Dem, a research institute on the quality of democracy, the EU has an average score between 0.85 and 0.9, where 1 represents a perfectly healthy democracy; the United States stands at around 0.6; and China at 0.05. Perhaps the reason behind the risky situation in which the European Union finds itself, between low growth and stagnation, is its inability to make use of this advantage. This is due to a lack of cohesion at the structural and decision-making level, which, given the slowness and difficulty of taking decisions, leaves it behind economically, despite being considered a healthier democracy.

By Tommaso Prever