EU could DIE in 3 years due to overspending, overregulation and underinvestment, warns Macron
10/06/2024 / By Belle Carter
French President Emmanuel Macron has warned that the European is facing an existential threat, and in the next two to three years the bloc risks losing its competitive edge against the world’s most powerful nations.
During a panel discussion at a conference in Berlin on Oct. 2, the French leader issued the warning and stated that the bloc has got to pass some reforms to its regulatory framework, bolster its investments and address its high social spending.
“The EU could die,” Macron said. “We are on [the] verge of a very important moment. We are overregulating and underinvesting. In the two to three years to come, if we follow our classical agenda, we will be out of the market.”
Pertaining to the bloc’s regulatory framework, he said they would need simplification shock if the economic union wants to be more competitive and have a place in the world’s multipolar order.
According to Macron, they have created a complex and overly rigid regulatory framework that stifles innovation and hampers growth, especially in the artificial intelligence and defense sectors.
He emphasized how the EU’s economic model is already outdated and needs to be revamped. He added that they could no longer depend on the United States to handle the bloc’s defense needs. (Related: Hungarian PM Viktor Orban says anti-Russia sanctions will kill EU economy.)
Moreover, he pointed out how the EU’s extensive social welfare system has created an unsustainable financial burden.
According to Eurostat, the bloc’s main statistical agency, EU governments spent the equivalent of around $3.4 trillion, or 19.5 percent of gross domestic product (GDP), on various social programs in 2022, with the largest portion allocated to pensions, unemployment benefits and other social transfers. Also, 78 percent of EU citizens believe that public spending on key social policies should increase, with half supporting higher taxes to pay for it.
“It’s not sustainable with the social model that we have,” Macron said.
To compare, the U.S. spent around $3.5 trillion on various social programs in 2023, or about 14- 15 percent of GDP, according to the Center on Budget and Policy Priorities.
Draghi advises EU to make rapid decisions and create more coordinated policies
Macron’s latest warning mirrors the recent report by former European Central Bank President Mario Draghi, which described the EU’s current economic strategy as an “existential challenge.”
The European Commission asked the former Italian prime minister a year ago to write a report on how the EU should keep its greening and more digital economy competitive at a time of increased global friction.
According to the nearly 400-page report, the EU needs far more coordinated industrial policy, more rapid decisions and massive investment if it wants to keep up, in terms of economy, with its rivals.
“The situation at the moment is really worrisome,” Draghi told a news conference in Brussels. “Growth has been slowing down for a long time in Europe, but we’ve ignored (it)… Now we cannot ignore it any longer. Now conditions have changed.”
Draghi also said in the report that the bloc needed investment of 750 to 800 billion euros ($829 to $884 billion) per year – about five percent of GDP. This is way higher even than the one to two percent of EU GDP in the Marshall Plan for rebuilding Europe after World War Two.
Read more stories like this on EconomicRiot.com.
Watch the video below where a former assistant for President Ronald Reagan says the EU’s worsening relationship with Russia is a disaster on its end.
This video is from Cynthia’s Pursuit of Truth channel on Brighteon.com.
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Collapse, economic collapse, economic model, Emmanuel Macron, EU, Europe, European Union, existensial risk, France, global powers, high social spending, market crash, multipolar world order, overregulating, revamp, risk, underinvesting
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