September 13: Europe’s dimming dynamism

In which, European pols fret about the continent’s future, Russia gets less than subtle help in its war effort, and the presidential debate… happened…. I guess?

Europe’s dimming dynamism

It’s no secret that European economies, particularly in the EU, have been hit hard by the sovereign debt crisis of 2009, Covid, loss of access to Russian energy, and the massive influx of immigrants and war refugees over the past decade. It hasn’t exactly been easy to maintain the robust welfare states that the EU has become known for. 

With the emergence of AI, and limited American and European decoupling from China, European leaders are divided on how to ride the emerging wave of new technologies. Should they take the regulatory path or should they seek to incentivize growth? Former Italian Prime Minister, Mario Draghi, made waves this week with a new report calling for the latter path and harshly criticizing the “regulate-first” approach of the EU. 

Despite the negative reaction in Brussels to the Draghi report, the central concern of the report touches on a difficult policy problem for the EU not much different from the debate on Social Security: the economic need for reform for the sake of financial and economic health in tension with the political need to maintain established social welfare programs. That’s quite a Gordian knot. In the meantime, Europe’s economic and political prospects look far from bright.