Europeans are getting poorer, and this is their new economic reality. At the same time, Americans continue to get richer, according to The Wall Street Journal.
Europeans are facing a new economic reality they haven't seen in decades. They are getting poorer… Finns are encouraged to visit saunas on windy days when electricity is cheaper. Across Germany, consumption of meat and milk fell to its lowest level in three decades. Europe has slipped into recession, reinforcing the sense of economic, political and military decline that began at the turn of the century
— emphasized in the publication.
The ills of European society were exacerbated by the crisis that arose from the destruction of global supply chains and caused a sharp rise in energy and food prices. The problem became even more serious after the reaction to the crisis of European governments, the newspaper notes.
In his view, high energy costs and runaway inflation at levels not seen since the 1970s are reducing producers' price advantage in international markets. Europe's weakness is its heavy dependence on exports, which account for about 50% of eurozone GDP compared to 10% in the US.
The WSJ pointed out that in Brussels, one of Europe's richest cities, teachers and nurses are queuing for half-price groceries off the back of a truck. Similar services are distributed throughout the continent.
Over the past 15 years, measured in dollars, the eurozone economy has grown by about 6% and the US economy by 82%. The average EU country per capita has become poorer than any US state except Idaho and Mississippi. If this trend continues, by 2035 the gap between per capita output in the US and the EU will be as large as it is now between Japan and Ecuador.
As European governments need to increase defense spending and borrowing costs rise, economists are expecting higher taxes. Taxes in Europe are already high. American workers take home almost three-quarters of their wages, while French and German workers take home only half
- the article says.