Discussions of competitiveness are front and centre in Europe right now. The European Commission’s new Competitiveness Compass, its answer to the Draghi report, calls for the EU to build its own artificial intelligence infrastructure, double down on industrial policy and finish the work of integrating the single market. All good goals, but as an American arriving at Brussels airport last week, all I could think was “why is the passport control line three hours long?”
This isn’t just the anecdotal musing of an outsider (or at least not just that). I lived and worked in Europe for 10 years, just when the single currency was introduced. It was an optimistic time. But since then Europe has lagged the US on pretty much every economic metric, from growth and per capita income to the size of capital markets and the number of high-value technology companies.
The news isn’t all bad. Inflation is coming down now, it’s true, and in Germany and the UK, stock markets have benefited somewhat from Donald Trump’s election, as investors look for ways to diversify. But when the continent is so painfully stuck between America’s tariff threats and China’s electric vehicle dumping, it’s worth looking closely at what — if anything — Europe can do to fundamentally change its economic trajectory.