EU like it's 1985
A report out today from a European commerce association says stacked against a number of yardsticks, the E.U. economy is decades behind the U.S.
A huge euro logo decorates the headquarters of the European Central Bank in Frankfurt, Germany. (Ralph Orlowski (c) Getty Images)
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TEXT OF INTERVIEW
SCOTT JAGOW: The European Union just got a piece of unsettling news. A study says the E.U.'s economy is way behind the U.S. economy. Let's check in with our European correspondent Stephen Beard on this. OK, Stephen, what's the study say?
STEPHEN BEARD: In a nutshell, that the E.U. economy is now reaching a level of economic development which the U.S. achieved more than two decades ago.
JAGOW: And how are they measuring this?
BEARD: They're using a number of yardsticks: GDP per capita, employment levels, productivity, spending on research and development. If we take GDP per capita, the U.S. had already back in 1985 reached the level enjoyed by Europeans today and the U.S. had already achieved Europe's current level of productivity in 1989.
JAGOW: Well Stephen do we have an explanation for these figures, why the gap is so wide?
BEARD: Part of this can be explained by the fact that in 2004, 10 new mostly-poor member states joined the E.U. and that to some extent has dragged Europe down. But as important, if not more important, it seems has been the superior growth in, for example, research and development spending in the U.S. compared with Europe.
JAGOW: And what are the prospects of Europe catching up?
BEARD: Pretty slim according to this study. I mean on the subject of U.S. GDP per capita, for the E.U. to catch up with that, the block would require an annual growth rate of more than 8 percent. In other words, Chinese levels of economic growth. It ain't gonna happen.
JAGOW: I was gonna say... well we have our own problems here in the U.S. economy so I don't know if there's any need to brag over across the pond.
BEARD: No but at least it'll cheer you up a little.
JAGOW: I guess so, alright thanks Stephen.
BEARD: OK Scott.
JAGOW: Our European correspondent Stephen Beard.
