ECB chief warns about European welfare costs as UK plans bigger state spending
European social spending faces big problems due to slow tech growth and aging population. ECBʼs Lagarde points to US success while UK Labour party looks to copy EU high-spending model
The UK Labour party looks at EU-style social spending while Christine Lagarde warns about its problems. Recent UK budget plans show government spending will hit 45pc of GDP - a level thats only happened during major crisis like the covid-19 outbreak
Our productivity growth in Europe is progressively slowing which means that our ability to generate income is diminishing
The aging population creates big issues: Spain Germany and France have more than 1/5th of people over-65 (Italy has even more). By early-2040s predictions show one-third of Italians will be seniors; this means huge pension costs. UK faces similar issues with its triple-lock system which makes benefits grow faster than tax income
Tech-wise Europe is falling behind. In the last two decades US productivity grew twice as fast as euro-zone: Americas work-hour output went up 25pc while Europe got just 13pc. The UK did even worse with less than 10pc growth. Here are the worlds top companies by size:
- Apple (US tech)
- Nvidia (US chips)
- Microsoft (US tech)
- Alphabet (US tech)
- Amazon (US tech)
European industry faces new-world problems. German car makers cant beat Chinese e-cars prices; fashion brands worry about US tax changes. Donald Trumpʼs border tax ideas could hit companies like LVMH hard. The biggest EU tech firm - SAP sits at just 37th place globally
Europe risks getting stuck in old tech while US leads digital progress. Only 4 of top-50 tech companies come from Europe showing how far behind itʼs falling in modern business growth
