Euro Decay

Collin May at Innocents Abroad points out the grim truth of European economic growth (or lack thereof). He draws a parallel between the EU and the USSR, in that the EU leaders view their nations, as Soviet leaders once saw theirs, as economic competitors of the U.S. The parallel isn’t perfect – especially when you consider that the EU lacks serious military power, not to mention the will to use it, which are what really got the U.S. to pay attention to the Soviet empire. Still, he has a point.

Of course, the USSR eventually collapsed. It’s difficult to imagine the EU nations, relatively open societies whose governments are, at least on the margin, accountable, suffering the same fate without first being forced by voters to reform. But it’s also difficult to see how their stagnant economies can possibly outcompete the relatively low-tax, low-regulation, dynamic U.S. Something eventually will have to give. As Collin puts it,

. . . When are the Europeans going to finally wake up and see that they’re busy rebuilding the Kremlin in the heart of Brussels? Not possessing a crystal ball, that is a question I’ll leave to the Europeans, but maybe the realization will soon sink in as they find that their economies are fast bogging down and their moralizing European empire has nothing but illusions to offer.

The EU is on a collision course with economic reality, and it’s a good bet reality will win. I wouldn’t be surprised if the EU survives in some form, though to do so it may have to narrow the scope of its ambitions. The next few years should be interesting.

UPDATE: Iain Murray is thinking along the same lines as Collin.

UPDATE: Joe Katzman develops the EU-as-incipient-USSR theme at greater length, and includes many links and thoughtful reader comments.