Based on the GDP data for 18 EU countries, half of those countries had an inflation-adjusted GDP growth rate below 1% last year, and there were only three nations where the economy grew by more than 3%. The EU as a whole mustered 1.6%, with the euro zone coming in at 1.5%. A year ago, the economy of the 27-member union expanded at 1.7%. Since then, GDP growth has slowly tapered off, and it has done so in a pattern that is symptomatic of an economy on its way into a recession.
A stagnant economy is a problem with great consequence for working families whose career opportunities erode as unemployment creeps up; for entrepreneurs whose small businesses find their markets squeezed by stagnant consumer spending; and for politicians who struggle to balance the government budget. The tighter the fiscal conditions get, the more we will see budget conflicts between defense and welfare state spending, and growing political tensions over tax hikes and budget cuts.
At a time when there is much talk about a more cohesive Europe, the economic performance of the continent points in the very opposite direction. As if dysfunctional national governments were not enough, there is no help to be expected from Brussels. Despite fanfare to the contrary, the EU has lost its ability to provide the continent-wide leadership that it was entrusted with when the EU was founded.