The Darkening Skies Over Europe’s Economy

Pessimism prevails on the continent as businesses turn their eyes to Trump’s America. Will this be the shock the EU needs to reform?

By Greg Ip. Excerpts:

"Since the end of 2019 the EU has grown 5% while the U.S. has expanded 12%. Seven U.S. stocks are worth more than the stock markets of Britain, Germany, France, Italy, Spain, the Netherlands and Switzerland, combined."

"sometime in the last 15 years, the bloc’s priorities shifted, from prosperity toward protection—of privacy, of data, of the climate. A tsunami of regulation on everything from website disclosures to carbon emissions followed."

"Having pushed so hard to rein in big tech companies, Europeans now lament that they have none of their own."

"The only aspect of AI where Europe leads is its regulation, like the AI law passed last year. The AI regulation is “sometimes so contradictory that you don’t even know how to fulfill it,” said Roland Busch, chief executive of German technology company Siemens."

"Apple, Meta and Google all delayed or withheld some AI product features from Europe out of regulatory concerns."

"The eurozone lacks truly pan-European banks comparable to America’s big four. Siemens must deal with four or five telecom companies in each of the EU’s roughly two dozen markets, Busch said."

"Exxon Mobil has roughly twice the sales but six times the market value of BP. The reason, according to one investment banker: Exxon’s shareholders expect it to prioritize oil and gas production while BP’s expect it to prioritize renewable energy, which isn’t as profitable. That could make BP a takeover target."

"in the past year, the U.S. has grown to account for nearly half of Ericsson’s net sales" [Swedish telecom equipment giant Ericsson]

"finding alternatives to Russian energy had cost Europe more than a year of growth."

"In European capitals, a rethink of regulation is already under way. Britain is delaying implementation of the latest bank capital rules. Germany has proposed delaying for two years European green disclosure rules that would have required companies to report at least a thousand data points."