The World Needs Europe to Get Its Act Together - Fast

If Europe is to assert itself on the global stage it needs to restore its self-confidence. Europe’s leaders must have the courage to chart their own course.

https://www.socialeurope.eu/the-world-needs-europe-to-get-its-act-together-fast



The world’s two superpowers are hardly inspiring models for those who care about democracy, human rights, and social justice. For all its economic success, China is an authoritarian regime that does not tolerate dissent. Under President Donald Trump, the United States has not only abandoned any semblance of addressing its vast inequalities of income and wealth but has also departed sharply from the rule of law at home and has become an erratic, unreliable partner abroad. Many yearn for a better future than what the US and Chinese models offer.

If we are to achieve a stable, multipolar world in which democratic aspirations remain alive, Europe will have to take the lead. But Europe has its own weaknesses. Its economic machine is faltering, and its democracy is under attack from far-right groups. But its politics has not deteriorated as much as in the US under Trump, and the continent still has many sources of strength, including a social-market model that produces greater equality and a stronger middle class than the US, as well as a large economic base – comparable to that of the US when adjusted for purchasing power – that boasts many innovative industries.

The trouble is not only that Europe lacks a vision of what it wants to be, but that it often looks at the wrong models for inspiration. For many of the continent’s leaders, the holy grail is the American Silicon Valley model of innovation. They point to the “innovation gap” between the US and the European Union that the influential Draghi report documented and advocate reforms – such as financial market integration and digital deregulation – that would, in effect, make Europe more like the US.

This US envy is misplaced. It disregards Europe’s own traditions of inclusion and regulation that have produced more equitable societies with broader access to good middle-class jobs and more reliable safety nets. It also overlooks the disconnect in America between innovation, on one hand, and productivity and general living standards, on the other. It is true that by almost any metric the US spends more on research and development and produces more innovation. But this yields greater economy-wide productivity and rising living standards for ordinary people only if the benefits diffuse widely. Indeed, US productivity growth since 2000 has been lackluster, except for the very recent uptick. The tech sector is an island in an economy where many workers need a second job to keep their heads above water.

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