October 08, 2004


Only by working longer and moving towards the US social model can Europe hope to attain its Lisbon goals, according to Laurens Jan Brinkhorst, Dutch Minister of Economy, speaking at an event in Brussels on 7 October.

Modernising the European social model is a matter of urgency if Europe wants to maintain its model of choice in the long term and close the productivity gap with the US, believes the minister. . .

The current European model is not performing adequately said Mr Brinkhorst pointing out how far the EU had slipped behind the US. 'Since the early 1990s, the US has largely outpaced the EU in terms of economic growth. From 1991 to 2003, the US economy grew by no less than 47 per cent in total, whereas the EU economy achieved only 28 per cent growth.' Mr Brinkhorst also drew attention to the fact that in 2003, the US GDP per capita was 55 per cent higher than the EU's.

55 per cent? I knew the gap was big, but I didn't realize it was that big.

UPDATE: Reader Mateusz Krepicz says it's not that bad, and sends this article from The Economist suggesting that the gap, while real, is narrower. On the other hand, here's an argument that things are worse.

ANOTHER UPDATE: Reader Mike Chittenden emails:

I think part of the difference in the expansion of the EU since the Economist article was written in early 2003 to countries in Eastern Europe with much lower GDP per capita than Western Europe. This expansion may have depressed overall GDP per capita enough to explain the difference in the two figures.

Could be.