Europe has been going downhill for a long time and everyone knows it now for years European governments downplayed weak economic growth first it was just a cyclical thing then it was because of the pandemic then it was because of Ukraine but now European leaders are admitting that their economic problems are structural with the US and China already far ahead in this Century's most important industries Europe needs to get its act together and fast today we find out what's eating Europe's economy how it might be saved and what's next for the European Union lock in Once Upon a Time it was the world's economic Powerhouse now it's an aging giant staring at a slow agonizing decline this is Europe as described by Mario dragy former chair of the European Central Bank and former prime minister of Italy dragi made this diagnosis in a long- awaited report for the European commission which laid out in facts and figures what many Europeans have known for years since the great financial crisis of 2008 life in many parts of Europe has become materially worse the wealth of the continent has been drained by its richest people while austerity and inflation have gutted public life and immiserated ordinary folk according to the European commission almost 100 million people people in the EU were at risk of poverty or social exclusion in 2023 anger alienation and apathy pervade the continent to the benefit of reactionary political forces which blame immigration for Europe's socioeconomic malaise unfortunately for them high levels of immigration have been propping up GDP growth and offsetting Europe's aging population for decades nevertheless reducing immigration is now a common goal for politicians in what is already the oldest continent in the world the average European is 42 compared to 31 in Asia and South America and 19 in Africa similarly a resilient global economy has provided a Lifeline for European exports in recent years compensating for weak domestic demand but now the global economy is slowing down and protectionism and geopolitical tensions are on the rise and it's no longer possible to ignore the C in Europe's economic model dragy notes in his report that quote across different metrics a wide Gap in GDP has opened up between the EU and us he argues that this Gap can mostly be attributed to weak productivity growth in Europe while the US and China have led the way in all of the new high growth industries of the 21st century so far European industry has stagnated the average age of the top five companies by market cap is 307 seven in the US in China it's 30 in Europe it's 96 and two of its top five companies were founded in the 19th century in the last 50 years no European company worth more than 100 billion euros has been created from scratch and now not one of the top 20 companies in the world is European a third of Europe's unicorns meaning privately held startups worth more than 1 billion Eur have left since 2008 because they were not able to scale on the continent the European commission regularly publishes Innovation scoreboards that consistently show the EU lagging behind the US on many indicators and the Gap is only getting wider European industry invests less than its peers in research and development it lags way behind in software hardware and artificial intelligence and its pharmaceutical component is at risk despite the kick in the dairy air from the pandemic interestingly European government support for R&D has grown steadily in the last 20 years and is now on par with the us at about 7% of GDP the problem is in the private sector where business expenditure on R&D is just 1. 2% of GDP compared with 2. 3% in the US this is a feature of what an earlier report by the European policy analysis group described as the middle Tech trap since the turn of the century Europe has failed to capitalize on the digital Revolution and has instead clung to its Legacy Industries these are now becoming uncompetitive if not obsolete hello hello it's me guys cousin Barry I'm very very sorry to be interrupting this no doubt fascinating video but I want to tell you about the coin Bureau deals page so listen up and listen well all right this is the place where you will find all the amazing promos and discounts what you as coin Bureau viewers are entitled to so don't be a mug go and check it out using the link below you'll find discounts on Hardware wallets you'll find exchange signup bonuses some of which are absolutely bleeding mental and you will find trading fee discounts there as well as well as a whole load of other goodies too and let me tell you old barington here he's out to am the Dog and Bone all bleeding day and night to get you these promos and discounts so you're welcome thank you very much go and have a look Pronto or have to come and have a word right now the most obvious example of the middl tech trap is the eu's automotive industry it employs 13.
8 million people accounting for 6. 1% of total EU employment and this includes 2. 6 million autom manufacturing workers accounting for 88.
5% of total EU manufacturing jobs for over 20 years most of the innovation in the EU EU has come from the same companies mostly in the automotive sector however innovation in this sector mostly means applying the latest technological advances to production this doesn't require the same R&D intensity or offer the same growth potential as high-tech Industries producing the newest Technologies this is why private sector R&D expenditures in the EU are so much lower than in the US where high growth software companies have long since planted automakers as the biggest and most important innovators in the economy the EU can still claim a comparative advantage in the automotive sector but for how long despite their large investments in R&D European car makers are at risk of being leapfrogged by competitors in the US and China who already have a lead in autonomous driving software and EV manufacturing Europe's top five car makers doubled their profits between 2019 and 2023 but this wasn't accomplished by any boost to productivity or innovation they just raised their prices and produced fewer cars this has been a boon for executives whose pay has soared but not so much for workers many of whom can now look forward to being laid off Volkswagen Germany's largest private employer is reportedly planning to close three factories and cut more than 15,000 jobs Global demand for European cars is falling and Chinese competitors are TR anouncing Europe in the race to make highquality EVS that are affordable now the eu's response is to try and engineer demand for European cars by imposing a 36% tariff on Chinese EVS on top of the existing 10% tariff levied on All Imports now funnily enough the most vocal critic of these tariffs is Germany which is home to Europe's biggest car makers Germany understands that tariffs are a losing proposition for several reasons European car makers are heavily dependent on sales in China which may now retaliate with its own tariffs on cars made in Europe and not only that but the eu's tariffs are just one more reason for Chinese car makers to speed up their plans to build their own factories on the continent now proponents of the tariffs say that their purpose is not to block Chinese EVS but to level the playing field but according to one analysis if that is indeed the goal then the tariffs would have to be at least 4 40 to 50% depending on the company anything less would not level the playing field because EVS can be built in China for as little as $5,000 compared to $20,000 in the EU as the EU is proposing a tariff of only $ 36% you have to ask what it will accomplish imported Chinese EVS will become more expensive but they will still be cheaper than European made EVS China will likely retaliate and already struggling sales of European cars in China will be hit hard moreover the proposed tariffs fly in the face of the eu's own environmental goals the block wants to cut emissions by at least 55% by 2030 it is not on track to achieve this and needs to double the rate of its emissions reductions to meet that 2030 Target refusing European consumers access to Affordable highquality EVS is therefore one of the most hypocritical and backwards decisions the EU could make now Germany is the biggest economy in the EU and is fairing exceptionally poorly but the structural problems are similar throughout the Euro Zone it's not only automakers but also manufacturers of Machinery chemicals and electrical equipment who say that they are lacking orders investment in construction is at a very low level further weakening demand for manufacturing this summer S&P Global reported that its Eurozone manufacturing purchasing managers index PMI which serves as a proxy for manufacturing activity fell to a 7mon low of 45.
