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The economy is a source of concern for the 27 European countries that meet in Brussels to review how to increase investment in the private sector, while their industry has been decimated compared to the global sphere. The community bloc saw reduced growth in its GDP in 2023 and experienced several periods of zero financial growth, while the first and second economies in the world accumulated significant increases and have not spared investments in new technology and environmental projects.
The European Union would be falling behind economically in the face of the impressive growth of China and the United States.
Under this concern, European leaders met while looking for options to boost their market of 450 million inhabitants and developing plans to stimulate the private market, which has been hit by the high costs of energy in the context of the war in Ukraine, a high inflation for the same reason and interest rates that have risen to the highest level since 1999 when the euro was created.
Experts say that the Old Continent is “losing position in the global race for innovation,” whether in batteries or artificial intelligence.
Day 2 of Special #EUCO starts at 9:30am CEST.
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Other analysts point out that its industry is losing markets and strength in the global panorama and that it would be giving in to foreign competition that benefits from massive subsidies and reduced regulations granted by governments.
This is the case of China, a country that has also been criticized by the United States, since Beijing would be advancing large packages of subsidies to technology and auto parts companies for the manufacture of electric cars that would come to the market at a lower cost and would complicate the European and US.
This criticism was emphasized by Treasury Secretary Janet Yellen herself during her recent visit to Beijing. She explained that the United States would not let China “flood the world market” with cheap products and that, if the Chinese authorities dared to do so, this would mean “unfair competition” to which they would not spare a commercial response.
Janet Yellen visits China and calls for a level playing field for American companies
The EU is growing less than its competitors
In macroeconomic terms, the European Union has been mired in stagnation for more than a year and a half.
Its growth peaked in 2023, at 0.4%, compared to 2.5% for the United States and 5.2% for China.
“What we need is a radical change. In Europe we have the same advantage linked to the size of our market, but its fragmentation is holding us back,” said former president of the European Central Bank (ECB), Mario Draghi, in a speech in Belgium on Tuesday.
Another fear in the European heart is that local companies will be seduced by foreign subsidies and the profitability of opting for these plans will become such a strong proposition that they will migrate from the continent.
In addition to divided opinions, with countries like France criticizing China, but with others like Germany increasingly strengthening its commercial relationship with the Asian giant, seeking its own benefits for its national companies such as BMW or Volkswagen.
With AFP
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