Europe’s recession in numbers: its weight in the global economy has fallen by 28% since 2000

Eat European elections in a few days, but no one seems to care. Neither in the member countries (in which national politics carries much more weight in the election campaign) nor beyond their borders. Europe continues to look at its navel, but the truth is that from the point of view economic-political-strategic weight This is becoming less and less relevant.

It is also true that this was almost inevitable. And this doesn’t have to be a consequence of bad news or the fact that things are going particularly poorly in European countries. He growth of developing economies (especially China and India, but not only them) have made it almost inevitable that rich countries will lose weight in the global economy as a whole. The same thing is happening in the United States. What is striking in Europe is that in our case this trend is much stronger and there is a certain despondency (we seem to have even assumed that this is something structural that we cannot fight). Because, in addition, we must take into account that there are countries (especially in the east) that are doing very well: for the average overall to be so poor, there are others that must be doing very poorly. .

This week, Eurostat published statistics on the weight of the EU in the global economy. When you start looking at the data, there are always some startling numbers that emerge. There are countries that are much larger than others but with less economic activity, others that we thought contributed more, others that have stagnated for a long time… Well, in the case of the Old Continent club, this is not the case . You might be surprised to see the trend over the last quarter century, but it confirms that what we feared is true.

Moreover, it must be said that comparison is not even the worst thing that could be done. The data is taken from World Bank and IMF statistics, and here we are talking about GDP at purchasing power parity. If we take GDP in nominal terms, the difference with other countries (especially the USA) would be much larger.

For now, so that no one can say that we are catastrophists, we will use PPP GDP and move on to the IMF database (here, for those who want to study; the truth is that it is very complete and simple to tinker):

• In 2000 American economy It accounted for 20.18% of the entire world economy. This was a slightly lower percentage than in 1980-1990 (in both cases about 21.5%). And the feeling was that the trend would continue to decline, not so much because the North American giant had stopped growing, but because others were doing better, especially in Asia. Thus, in 2023 this figure was 15.56%. That’s a noticeable decline (23%), partly due to a sense of decline that is palpable in the country: Donald Trump has perhaps been the one who has best captured and exploited the feeling of disempowerment that the average American feels. .
• But if the US case attracts attention, If we look at Europe, things are much worse there.. In 2000, the EU economy (effectively the sum of the countries that are now part of the EU, although they were not part of the club at the time) accounted for 20.12% of the world economy. By 2023, this figure had dropped to 14.46%. This may seem like an evolution similar to the US, but it is not: it represents a 28% reduction in global weight and makes what was once a technical link to the US now an economy that has shrunk by almost 10%.

Because, in addition, two important factors must be taken into account: firstly, financial crisis of 2007-08 This especially hit the USA. That is, we are not talking about magical years for the American economy, but rather the opposite. Well, Europe can’t even keep up with this not-so-good pace. Secondly, there are parts of Europe that have done well: the East, Ireland… If the data is so bad overall, it’s because Western countries (France, Germany, Spain, Italy) They have experienced two decades of relative stagnation. It’s not that we have stopped growing (although in the case of Italy and Spain we can almost talk about a lost quarter of a century), but the lack of dynamism is striking.

Some numbers explaining the strength of the rest of the regions and how Europe is increasingly losing importance (though not everything is due to its mistakes, a significant part is determined by the strength of these other countries):

• China In 2000, its weight in the world economy was 7.2% (we always talk about GDP at PPP), which was a third of Europe’s weight. Now he heads rating from 18.73% (a note must be made here, because in nominal terms the USA is still very far away)
• GermanyEU locomotive, rose from 4.72% to 3.15%, a drop of 33%. Italyfrom 3.27% to 1.85%: a decrease of 43%. For Spainaccumulated over the years 2000-2023 is also negative: from 1.91% of the world economy to 1.37% (-28%, for the EU). In the case of our country, if we divide these years into pre-crisis and post-crisis, the picture is much worse. From 2000 to 2007, the decline was relatively small and has accelerated since then (we have been almost stagnant for more than a decade and a half).

Hence the conclusions. First, the obvious: it is logical that the European economy will lose weight throughout the planet due to the strength of other regions. This is not bad and does not mean that the average European citizen is worse off in absolute terms than at the beginning of the century. But we cannot ignore that (1) the decline in Europe is greater than in other rich regions. And (2) whether it is logical or not, we are witnessing a restructuring of the global economy that is making Europe less and less important. We are not always aware of this fact and the consequences it has.