The Economic suicide of Europe

Sixteen years ago, the European Union and the United States had almost identical gross domestic product (GDP). Today, the difference is large in favor of the United States.

The GDP per capita of the European Union in 2008 was about 37,000 US dollars, and now it is about 40,000. That is an increase of only 8 percent. In a full 16 years.

On the other hand, the GDP per capita of the United States was 48,500 US dollars 16 years ago, and now it is 81,500, which is an increase of 68 percent.

Over the past 16 years, the United States has achieved 8.5 times greater economic growth than the EU.

Looking at the countries, today, when comparing GDP per capita, Germany is richer than only the 5 poorest countries in the United States, and France is richer than only one.

The EU achieved enviable economic growth in the period from 1996 to 2008, much faster than the United States. What happened next, what caused Europe to fall into permanent stagnation, while the US continues to grow?

Yes, we had the global financial crisis and the great depression. But it hit the whole world. So, the Great Depression is not the reason for European stagnation, but the response to it and everything that key politicians did afterwards.

We can say that the stagnation was also influenced by some non-economic elements, such as the accession of Croatia, which was significantly poorer than the EU average at the time, and Brexit (the UK was one of the richest member states and as such contributed significantly to GDP). But even without Croatia, and if the UK had remained within the EU, stagnation would still have occurred.

Ole Lehmann, a German cryptocurrency trader and IT analyst, explained his theory on X: he claims that the stagnation was a political choice of EU leaders. He called it the "economic suicide of Europe".

"Europe chose security over economic growth. America chose innovation over regulation.

The results?

America produced 9 trillion-dollar companies (9 of the 10 most valuable companies in the world). Europe zero.

But that's not the end. European talent is leaving the EU en masse. I see most European entrepreneurs choosing between two destinations:

- the US where wages are higher

- Southeast Asia where the cost of living is lower and it's easier to start a startup

Why?

Because Europe has made it impossible to win at home. Look, for example, at the Berlin scene. Company founders are viewed with suspicion. Entrepreneur = exploiter. I've witnessed local gatherings where IT entrepreneurs have been called "capitalist parasites."

Meanwhile, in places like Silicon Valley and New York City, entrepreneurship is celebrated, innovation is celebrated, risk-taking pays off. Failure is seen as an education, not a disgrace.

Europeans are drowning in red tape. Labor laws make it virtually impossible to hire and fire, taxes destroy small businesses, and regulatory compliance kills innovation.

Even French President Emmanuel Macron admits this. Comparing Europe to the American and Asian markets, he said:

"The EU could die, we are on the verge of a very important moment. Our old model is over - we regulate too much and invest too little. In two to three years, if we continue to push the old agenda, we will be out of the market."

An anti-innovation mindset is killing Europe. When Elon Musk was building Giga Berlin, Germans protested: "We don't want techno-colonialism!"

Tesla almost abandoned the project because of regulations and protests from local residents. This happens to small companies all over Europe every day.

Europe's regulatory culture has created an economic spiral of destruction:

- talent leaves

- companies avoid investment

- innovation dies

- the economy stagnates

- more regulation follows.

The numbers are brutal: 90% of European tech companies would like to move to the US, European salaries in the IT sector are 50% lower than in the US, and investment in startups is 5 times higher in the US than in the EU.

And what about European tech successes? Most of them have moved to the US: Spotify (which is now based in New York), Klarna (which runs its main operations from the US), ARM (taken over by the American NVIDIA).

The point is this: while Europe is debating the ethics of artificial intelligence, America is building it. While Europe is regulating cryptocurrencies, America is creating them. While Europe is protecting an old industry, America is building a new one.

The solution? In my opinion, Europe should:

1. Cut regulations

2. Support risk-taking

3. Support entrepreneurship

4. Lower taxes on innovation.

But will it?

As a European, I unfortunately doubt it. The addiction to regulations is too deep. The anti-business culture is too widespread. As a fellow French entrepreneur told me: "I love Europe, but I can't build my future here. The system won't let me."

That's why America wins. Not because Americans are smarter, but because their system rewards those who build.

Europe has become a museum: good at preserving the past, bad at building the future. Unless Europe deregulates and starts valuing risk-taking, this gap between the US and the EU will only widen," Lehmann explained.