This summer, as travel opened up, a stark economic reality was highlighted: for Americans, Europe has become increasingly affordable, not due to Europe becoming cheaper, but because the US economy has surged ahead. A recent Wall Street Journal article pointed to a significant shift: “Europeans are facing a new economic reality… They are becoming poorer,” relative to the United States. This isn’t just a feeling; the data backs it up.
Looking back to 2008, the economic sizes of the US and the Eurozone were roughly comparable. The US held a GDP of $14.8 trillion, while the Eurozone was close behind at $14.2 trillion. Fast forward fifteen years, and the picture is drastically different. The Eurozone’s GDP has inched up to just over $15 trillion, whereas the US economy has exploded to a massive $26.9 trillion.
This widening gap signifies a profound shift. The economic gulf between the US and Europe is now enormous. Analysis from the European Centre for International Political Economy illustrates this point vividly. Their ranking of GDP per capita places Italy on par with Mississippi, the poorest US state. France fares only slightly better, situated between Idaho and Arkansas in the US rankings. Even Germany, once the economic powerhouse of Europe, finds itself between Oklahoma and Maine in terms of GDP per capita. This comparison often triggers defensiveness in European discourse, with arguments shifting to quality of life metrics, but the underlying economic trend is undeniable.
Europe’s economic engine has been sputtering, particularly since the COVID-19 pandemic. While the US has rebounded strongly, Europe is struggling to regain momentum. Germany, previously a pillar of European economic strength, is now weakened by factors like Russian energy disruptions and increased competition from China in key industries. Conversely, the US benefits from abundant energy resources, being a major global oil producer, and views China more as a manufacturing hub than a competitor in high-value sectors. The success of American companies like Tesla, outpacing European automotive giants, further underscores this transatlantic shift in economic power.
In conclusion, the economic size of the US compared to Europe has grown dramatically in recent years. The data reveals a significant and increasing disparity, highlighting a concerning trend for the European economy in the face of robust American growth.
