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Some years ago Europe was a great economic powerhouse as the Eurozone and EU were recording high GDP growth, high wages and high life quality standards. But in the last decade this momentum has changed a lot as the Eurozone crisis took place between 2011-2016. Today European states are recording negative or zero GDP growth, the industrial production is declining really fast, their technology sector has vanished while the wages have been stagnated for many years. The estimates illustrate low economic expansion for the 2023,2024 and 2025 while others economies like the US, China, Australia and Canada are expecting much higher growth rates. The main question is why European countries are falling behind their competitors??
It may be linked to population growth, which has now stopped, and soon will be declining. (LINK)
Population decline results in an older population, even before the actual decline itself begins. Older populations consume less and produce less.
It won't be reversing, this population decline. Current fertility rate throughout Europe runs around 1.5 (LINK). That means ever fewer people. Italy is very concerned, but can do nothing. Fortunately, the tourism industry there is very strong and will hold them together for a great many years.
I, personally, do not think the influx of African migrants will help the financial situation. Even if they came in sufficient numbers they would not have the training or education necessary to properly power the European economy. That's not to say I think Europe will fail; Europe will do well for many decades to come.
There will come a time, though, when world wide population decline results in economic decline. (LINK)
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Quote:
Originally Posted by Financial Man
,,,. The main question is why European countries are falling behind their competitors??
Having worked and lived in the Euro zone
1) There will never be a 'unified' Europe - there are generations of warfare / ethnic violence / kingdoms
2) The EU council formation was +/-. The powerful and more economically stable and strong economies are diluted by poor performers.
3) There will be a 'delayed' / extended time to benefit from EU
4) Vast rules / infrastructure / diverse objectives will slow (and possibly torpedo) EU benefit.
5) There is a LOT of complexity (cultures, skills, objectives, education levels, local dialects *and very divisive, underground economy)
Overall the EU was probably a good thing, but came with an understandable slowing down of the overal economy, until the 'new normal' finds it's way (if ever).
This weighs heavy.
In 2022, around 1.08 million non-EU citizens were found to be illegally present in the EU, indicating a 59% increase compared with 2021 (679 730). Hungary reported the largest number of non-EU citizens found to be illegally present in the EU (222 520), followed by Germany (198 310) and Italy (138 420).May 5, 2023
But where are those exiled supposed to go?
They have no 'home', they have no income. They have needs.
One needs to look at the history of how many people immigrated to the USA for various reasons (starting in the 1700's.) 5 million Irish alone! We were a more unified nationwith room to grow, and opportunities for the VERY hard workers.
US and EU residents have generally had a very cush life. You note that when working with business development. Immigrants are very driven, motivated, and have a high need for success. It's really tough for the EU to take all it's new residents and get them productively on a fresh start.
Nearly impossible to buy housing in much of the EU (cost + regs), fortunately rents are less expensive than USA.
Food and natural resources? Lots of people & less land = higher need to import.
I hope EU can hold it together, as there are a lot of forces tearing it apart.
Having worked and lived in the Euro zone
1) There will never be a 'unified' Europe - there are generations of warfare / ethnic violence / kingdoms
2) The EU council formation was +/-. The powerful and more economically stable and strong economies are diluted by poor performers.
3) There will be a 'delayed' / extended time to benefit from EU
4) Vast rules / infrastructure / diverse objectives will slow (and possibly torpedo) EU benefit.
5) There is a LOT of complexity (cultures, skills, objectives, education levels, local dialects *and very divisive, underground economy)
Overall the EU was probably a good thing, but came with an understandable slowing down of the overal economy, until the 'new normal' finds it's way (if ever).
This weighs heavy.
In 2022, around 1.08 million non-EU citizens were found to be illegally present in the EU, indicating a 59% increase compared with 2021 (679 730). Hungary reported the largest number of non-EU citizens found to be illegally present in the EU (222 520), followed by Germany (198 310) and Italy (138 420).May 5, 2023
But where are those exiled supposed to go?
They have no 'home', they have no income. They have needs.
One needs to look at the history of how many people immigrated to the USA for various reasons (starting in the 1700's.) 5 million Irish alone! We were a more unified nationwith room to grow, and opportunities for the VERY hard workers.
US and EU residents have generally had a very cush life. You note that when working with business development. Immigrants are very driven, motivated, and have a high need for success. It's really tough for the EU to take all it's new residents and get them productively on a fresh start.
Nearly impossible to buy housing in much of the EU (cost + regs), fortunately rents are less expensive than USA.
Food and natural resources? Lots of people & less land = higher need to import.
I hope EU can hold it together, as there are a lot of forces tearing it apart.
All of these are so true and have a vital meaning for European decline. Instead of these facts another determining factors which fading Europe are the high taxation rates and the low investment per worker. I mean in the US the average investment spending per worker stood at 23.000$ per year while in Europe the same number is around 14.000$, so we see a massive difference which doesn’t help European nations to grow as fast as the US can.
All of these are so true and have a vital meaning for European decline. Instead of these facts another determining factors which fading Europe are the high taxation rates and the low investment per worker. I mean in the US the average investment spending per worker stood at 23.000$ per year while in Europe the same number is around 14.000$, so we see a massive difference which doesn’t help European nations to grow as fast as the US can.
Please post the base for your post that the average US worker investment spending stood at 23k/anno. Thank you.
One big issue is the cost of doing business in the EU - the regulatory framework employed there tends to make it more expensive to do business and to give fewer degrees of freedom for the business to develop & execute plans.
Take Italy. At the end of any employment contract, even for just cause and resignations, employers in Italy must pay the “Trattamento di Fine Rapporto” which is a severance pay of an employee's all-time received salary divided by 13.5. It is an extra cost to the employer of ~7% per month.
The added costs of doing business in the EU, at the margin, discourage large employers from investing. Lower investment means lower long term productivity and lower long term GDP.
Last edited by moguldreamer; 12-01-2023 at 09:34 AM..
One big issue is the cost of doing business in the EU - the regulatory framework employed there tends to make it more expensive to do business and to give fewer degrees of freedom for the business to develop & execute plans.
Take Italy. At the end of any employment contract, even for just cause and resignations, employers in Italy must pay the “Trattamento di Fine Rapporto” which is a severance pay of an employee's all-time received salary divided by 13.5. It is an extra cost to the employer of ~7% per month.
The added costs of doing business in the EU, at the margin, discourage large employers from investing. Lower investment means lower long term productivity and lower long term GDP.
That’s true, business regulations in Europe are so complicated and tough for the enterprises so at the end of the day they don’t want to invest there. Italy, Greece and Spain are great examples for tough and weird laws which reduced the economic activity and investments. Also another throwback for European economy is the high corporate taxes that governments force businesses to pay. In Portugal, Germany, Spain, France and Italy the firm taxation ranges from 25-32% as a result many businesses have pulled out their activities and move them in Asia.
That’s true, business regulations in Europe are so complicated and tough for the enterprises so at the end of the day they don’t want to invest there. Italy, Greece and Spain are great examples for tough and weird laws which reduced the economic activity and investments. Also another throwback for European economy is the high corporate taxes that governments force businesses to pay. In Portugal, Germany, Spain, France and Italy the firm taxation ranges from 25-32% as a result many businesses have pulled out their activities and move them in Asia.
Regarding economics Germany is particularly interesting. A tidbit that shows Germany's drift toward structural and likely permanent underperformance..........VW said just the other day that its VW brand is no longer competitive on the world stage due to a morass of things but among them relatively low productivity per worker year and high pay per worker. To be fair some of that goes beyond Germany but the incessant illusion sold from the US left that Euro car companies can pay well, treat workers like movie stars, sell good cars and make money too is vaporizing before our eyes.
Leading to........who knows the damage that we will see from the new US autoworker pay raises? GM was already overpaying workers relative to Toyota and several others.
The same people who cheered on these raises are the most likely to gripe about car prices.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,690 posts, read 57,994,855 times
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Quote:
Originally Posted by EDS_
Regarding economics Germany is particularly interesting. A tidbit that shows Germany's drift toward structural and likely permanent underperformance..........VW said just the other day that its VW brand is no longer competitive on the world stage due to a morass of things but among them relatively low productivity per worker year and high pay per worker. T...
Leading to........who knows the damage that we will see from the new US autoworker pay raises? GM was already overpaying workers relative to Toyota and several others.
....
History repeats itself within our lifetime. BTDT in the 70's with Auto industry.
Negotiated themselves out of a career (and industry).
Today our choices to 'offshore' / find a more economical production region AND a larger customer base are easier, way easier since most companies have global presence and access.
The USA has probably turned yet another corner. Results will be similar, but not the same, because the world of commerce is very different.
Germany has it's hands full - tug of war.
EU wants it's bite.
Nationals are hanging onto their origins
Needy countries are looking for a boost
Germany is looked upon as the stable mother of the EU, but few realize the great price that it and other strong EU nations are paying.
Many nursing nations are happy to keep nursing, It get addictive, It's easy.
No mother hen has the current clout to say "ENOUGH!, wean yourselves and get on with unification and betterment of our union."
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