Indeed, Europe\u2019s terror is so palpable that it has even stirred its usually workshy politicians into action. Fear of foreigners has compelled EU leaders to pull up the bloc\u2019s migrant drawbridges; fear of Russia and US military abandonment has sparked a splurge in military spending; and fear of firms decamping to China or the US has triggered a wave of regulatory \u2018simplification\u2019.<\/p>\n
\u201cEurope is suffering from a fear of decline,\u201d said Philipp Lausberg, a senior analyst at the European Policy Centre. \u201cThere is a sense that things are going downhill, that we\u2019re losing our prosperity, and that the political and geoeconomic order is changing in a way that isn\u2019t to our advantage.\u201d<\/p>\n
Alas, fear begets fear. The increase in defence expenditure has unnerved<\/a> fiscally conservative policymakers who are still haunted by the nightmare of last decade\u2019s eurozone crisis. Similarly, the rush to slash red tape has alarmed<\/a> labour groups that are already anxious about stagnant wages and EU governments\u2019 attacks on workers\u2019 rights.<\/p>\n The fear is also viciously cyclical. Consumers\u2019 reluctance to spend is largely responsible for companies\u2019 unwillingness to invest. And companies\u2019 unwillingness to invest, in turn, shapes an economic environment in which consumers are reluctant to spend.<\/p>\n Fear, in other words, is not merely a cause of current EU policymaking. It is also a symptom of the bloc\u2019s current economic malaise, which, in turn, exacerbates the disease.<\/p>\n Legitimate fears?<\/p>\n In fairness, Europeans are right to be afraid. The \u2018Doomsday Clock\u2019<\/a>, set each year by the Bulletin of the Atomic Scientists, is currently fixed at 89 seconds to midnight: the closest humanity has ever been to annihilation.<\/p>\n Interestingly, however, the main threats to humanity cited by the Bulletin \u2013 nuclear war, climate change, and the risks posed by disruptive technologies, such as AI \u2013 do not always rank among the principal worries cited by most Europeans.<\/p>\n Indeed, some of their concerns might even be counterproductive. For instance, fear of migrants \u2013 which surveys<\/a> show<\/a> is widespread throughout Europe \u2013 makes little sense when, as Mario Draghi<\/a> points out in his influential report on European competitiveness, the EU is increasingly in need of skilled labour. (Europe will shed roughly 2 million jobs annually by 2040, he notes.)<\/p>\n However, it would be overly simplistic to claim that citizens\u2019 concerns \u2013 which also include a lack of access to housing<\/a>, inflation<\/a>, and general economic anxiety \u2013 are entirely misguided. And it would be an even greater oversimplification to claim that fear \u2013 which is amplified by social media and, it must be admitted, many conventional news outlets \u2013 is the sole problem afflicting the EU.<\/p>\n The slump in Chinese demand, for instance, was not caused by fear, but rather by Beijing\u2019s strategic foresight and European automakers\u2019 hubris regarding the continued consumer demand for combustion-engine vehicles.<\/p>\n Similarly, US tariffs on EU exports, although ultimately accepted by Brussels over fears of America\u2019s abandonment of Ukraine<\/a>, were not caused by fear but by Donald Trump\u2019s<\/a> insanity.<\/p>\n A (sub-)optimal outcome<\/p>\n Nevertheless, it remains true that overcoming fear would be hugely beneficial to the European economy. But can this be done?<\/p>\n Many believe that it can. Sander Tordoir, chief economist at the Centre for European Reform, has suggested that Europeans\u2019 high savings rate \u2013 which, at 15.4%<\/a>, is more than three times<\/a> that of the US \u2013 can be brought down, and channelled into productive investments by specific government policies, such as consumer subsidies<\/a> for electric vehicles.<\/p>\n Tordoir also noted that, while individual citizens\u2019 decisions to squirrel away their money may be economically rational (e.g. as Europeans age, they need to save more for retirement), this can also \u201cadd up to a sub-optimal outcome for aggregate demand and output\u201d.<\/p>\n \u201cWith the right policies, governments can pull those savings into productive investment and generate demand for Europe\u2019s producers,\u201d Tordoir said.<\/p>\n Many also note that the more sweeping reforms proposed by Draghi \u2013 such as capital markets integration<\/a>\u00a0or bolstering the size of the EU\u2019s long-term budget<\/a> \u2013 would be even more helpful.<\/p>\n Ironically, however, some suggest that in order to do this, fear itself must ultimately be overcome.<\/p>\n \u201cThe EU is still too afraid to press the big buttons\u2026 that Draghi has put on the table,\u201d said Nils Redeker, acting co-director of the Jacques Delors Centre. \u201cThere\u2019s a lingering fear of backlash against meaningful reforms in a polarised political climate.\u201d<\/p>\n Fears of political reprisal might, in other words, be the very emotion that prevents politicians from enacting reforms that would alleviate their electorate\u2019s fears \u2013 and ease Europe\u2019s political polarisation.<\/p>\n A complex thought, to be sure. But also a scary one.<\/p>\n Economy News Roundup<\/p>\n Brussels remains wary despite US-China trade truce. The European Commission declined to comment directly on an apparent easing of trade tensions between the US and China on Thursday, despite Beijing\u2019s announcement that it would suspend the imposition of rare earth restrictions that have alarmed EU industry leaders. \u201cWe don\u2019t comment on trade negotiations between third countries, but, of course, in principle, we welcome any development that removes barriers to global trade flows,\u201d a Commission spokesperson said. Read more.<\/a><\/p>\n Brussels remains wary despite US-China trade truce<\/p>\n \n\t\t\t\t\tThe European Commission declined to comment directly on an apparent easing of trade tensions between\u2026\t\t\t\t<\/p>\n \n\t\t\t\t\t4 minutes\t\t\t\t<\/p>\n \t\t\t\t\t Eurozone economy expands despite German stagnation. The eurozone economy grew by 0.2% in the third quarter of 2025, beating analysts\u2019 expectations, Eurostat<\/a>, the EU\u2019s statistics agency, reported on Thursday. The uptick came in spite of stagnant output in Germany, the bloc\u2019s largest economy. An increase in corporate investment and aeronautical exports helped France<\/a>\u00a0to unexpectedly grow by 0.5%. Read more.<\/a><\/p>\n Brussels urges Romania to \u2018stay the course\u2019 on deficit-slashing measures. EU economy chief Valdis Dombrovskis said after a two-day visit to Bucharest on Tuesday that it is \u201cimportant\u201d for the Black Sea nation to maintain its efforts to reduce its sky-high budget deficit, which stood at\u00a09.3% of annual GDP<\/a>\u00a0in 2024: the highest in the EU and more than three times the bloc\u2019s 3% fiscal limit. Read more.<\/a><\/p>\n Brussels urges Romania to \u2018stay the course\u2019 on deficit-slashing measures<\/p>\n \n\t\t\t\t\tThe European Commission called on Romania on Tuesday to maintain its efforts to reduce its\u2026\t\t\t\t<\/p>\n \n\t\t\t\t\t2 minutes\t\t\t\t<\/p>\n \t\t\t\t\t EU doubles down on Ukraine reparation loan after Belgian pushback. Speaking in Stockholm on Tuesday following a meeting of Nordic European leaders, Ursula von der Leyen said that the \u20ac140 billion scheme, which would draw on Russian sovereign assets held by Brussels-based clearinghouse Euroclear, remains \u201clegally sound\u201d. Tellingly, the European Commission chief also refused to mention an alternative option of using common EU debt to plug Ukraine\u2019s colossal budget needs, despite being directly asked about this. Read more<\/a>.<\/p>\n Berlin urges \u2018dialogue\u2019 with China after EU trade bazooka threats. Germany\u2019s foreign minister called for calm amid a mounting trade spat between the EU and China over critical mineral export curbs on Monday \u2013 just days after the bloc\u2019s top brass threatened to fire their most powerful trade weapon at Beijing. \u201cWe want a close dialogue with China,\u201d Johann Wadephul told reporters during a visit to Brussels, where he met with von der Leyen and Trade Commissioner Maro\u0161 \u0160ef\u010dovi\u010d. Read more.<\/a><\/p>\n Berlin urges \u2018dialogue\u2019 with China after EU trade bazooka threats<\/p>\n \n\t\t\t\t\tGermany\u2019s foreign minister called for calm amid a mounting trade spat between the EU and\u2026\t\t\t\t<\/p>\n \n\t\t\t\t\t2 minutes\t\t\t\t<\/p>\n \t\t\t\t\t EU to propose \u2018concrete\u2019 critical mineral plan before end of 2025. Brussels is seeking to flesh out a plan to reduce its dependence on China for critical minerals before the end of the year, a European Commission spokesperson said on Monday. The comments come after Commission President Ursula von der Leyen\u2019s weekend unveiling of \u2018RESourceEU\u2019, a proposal to strengthen Europe\u2019s supply chain resilience for strategically crucial metals by boosting trade links with third countries, increasing domestic mining and refining, and joint stockpiling. Read more.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Halloween came and went this week \u2013 and, with it, the annual opportunity for otherwise self-respecting adults to…\n","protected":false},"author":2,"featured_media":237713,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-237712","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/237712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=237712"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/237712\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/237713"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=237712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=237712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=237712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Brussels](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/11\/GettyImages-2243568903-800x533.jpg\")
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