Why is Europe falling behind the US?

Business Daily

BBC

News, Business

4.4 • 796 Ratings

🗓️ 27 April 2025

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

Even before there was talk of a trade war between the US and EU, Europe was on the economic backfoot.

But it wasn’t always the case.

In 2008, the EU was the world’s biggest economy - today, the US economy is $9.5 trillion bigger than the EUs.

So what has happened?

Presented and produced by Rob Young

(Image: An employee fixes the seat to a Volkswagen AG Tiguan on the production line at the Volkswagen factory in Wolfsburg, Germany. The company said in March 2025 that profits had fallen amid high costs and Chinese competition. Credit: Getty Images)

Transcript

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0:00.0	Hello, I'm Rob Young. Welcome to Business Daily from the BBC. Coming up, Europe's economy is failing to keep up with Americas.
0:10.2	These are very, very scary numbers for Europe to see that we're losing a competitive edge. We'll look at why Europe fell behind and hear what the consequences could be.
0:21.4	It is totally urgent. We have some democratic values to defend. So we cannot really
0:28.1	defend those values if our economies are not doing well.
0:32.7	Tackling Europe's poor competitiveness. That's all on Business Daily from the BBC.
0:40.6	Even before there was talk of a trade war between the United States and the European Union,
0:46.3	the EU was on the economic back foot. But it wasn't always the case. Back in 2008, the European
0:53.4	Union was the world's mightiest economic engine,
0:56.5	having just overtaken the United States the year before. The annual economic output of the
1:02.0	bloc of 27 nations was one and a half trillion dollars greater than that of the US. Many
1:08.0	economists at the time predicted the EU, with its much bigger population, would
1:12.7	continue to outpace America. But it didn't turn out that way. Fast forward to today,
1:18.6	and the US economy is now nine and a half trillion dollars bigger than the EU's. Even if you
1:25.3	include Britain back in the figures, which is no longer in the
1:28.3	block after Brexit, America still towers over its European rivals. These are very, very
1:34.0	scary numbers, I think, for Europe to see that we're losing a competitive edge. Sventor
1:39.9	Holsita is the chief executive of the fertiliser giant Yara, which works in dozens of European countries.
1:46.3	Yara's headquarters are in Norway, which is not an EU member state, but is part of the bloc's single market and so is bound by its economic rules.
1:55.3	There's war in Europe. That war is being fought with energy as well and that has huge consequences. And it's something
2:03.0	I really realizing now how important energy is for all sectors. And when we're faced with energy
2:10.7	prices, that three and a half times the cost in the U.S., that has a consequence for vital industries.
2:17.4	And we see it in terms of capital
	...

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