Europe Hit Hard by Inflation from European Disease... European Economy 'Plummets' to Half of US Level

WSJ "Europe Is Becoming Poorer"

"Europe is becoming poorer."

The US Wall Street Journal (WSJ) analyzed on the 17th (local time) that the Eurozone's economic size has shrunk to half that of the US over the past 15 years due to declining productivity caused by an aging population and a culture that values leisure. It predicted that the decline of the Eurozone economy is accelerating as inflation hits while wages do not rise.

According to WSJ, the Eurozone's Gross Domestic Product (GDP) currently stands at $15.07 trillion, about half the size of the US's $26.86 trillion (International Monetary Fund estimate). In 2008, the GDPs of the Eurozone and the US were similar at $14.22 trillion and $14.77 trillion, respectively. However, while the US economy grew by 82% over the past 15 years, Europe increased by only 6%, widening the gap significantly between the two regions.

Europe also lagged far behind the US in terms of consumer spending. According to the World Bank (WB), the European Union's (EU) consumer spending remained stagnant, moving from $12.24 trillion in 2008 to $12.26 trillion last year. In contrast, the US consumer spending surged by 55.3%, from $12.4 trillion to $19.26 trillion during the same period.

With declining productivity, real wages adjusted for inflation also fell. According to estimates by the Organisation for Economic Co-operation and Development (OECD), Germany's real wages dropped by 3% since 2019. Italy and Spain saw decreases of 3.5% each, and Greece's fell by 6%. This contrasts sharply with the US, where real wages rose by more than 6% during the same period.

WSJ analyzed, "Europe's aging population and a culture that prefers leisure time and job security over income have led to sluggish economic and productivity growth," adding, "The situation in Europe, which has been deteriorating for decades, worsened further due to COVID-19, supply chain disruptions caused by the Ukraine war, and inflation." It explained that chronic European ailments combined with soaring energy costs and a global economic slowdown in countries like China have plunged the European economy into trouble.

The decline of the European economy has significantly worsened the quality of life for Europeans. In Germany, per capita meat consumption in 2022 was 52 kg annually, an 8% decrease compared to the previous year?the largest drop in 33 years since 1989. The number of users in Europe of 'Too Good To Go,' a Danish company that sells unsold food inventory from retail stores and restaurants, has tripled to 76 million since the end of 2020.

The European Centre for International Political Economy, a think tank headquartered in Brussels, Belgium, expressed concern that "if this trend continues, by 2035 the per capita production gap between the US and Europe will widen to the level currently seen between Japan and Ecuador."