RUTHFULLY YOURS

The largely unspoken trade-off involved in membership of the European Union is that democracy and national sovereignty are sacrificed in return for economic prosperity. Member states give up much of their control over critical policy areas to an unelected, technocratic elite who are entrusted with delivering higher living standards and productivity. But Brussels is not keeping its part of the bargain – and hasn’t for some time.

Worse, the EU economy is about to endure decades of ‘slow agony’. This is the grim prognosis not of a Eurosceptic or populist, but of one of Europe’s most senior technocrats, Mario Draghi, the former head of the European Central Bank and ex-prime minister of Italy. Last week, Draghi unveiled a 400-page doorstopper report, commissioned by the EU, on the ‘future of European competitiveness’. Without radical economic reform, he warns, EU member states will suffer from stagnant living standards, technological backwardness and geopolitical impotence.

As Draghi’s report makes clear, the EU has been in deep economic trouble for some time now. At the turn of the century, the EU and US were on a relatively equal footing. But, on a per-capita basis, real disposable income in the EU has grown at only half the rate of the US since 2000. The US now massively outperforms the EU in advanced technology. Only four in the world’s top-50 tech firms are European. Almost a million manufacturing jobs were lost in the EU in the last four years alone. For too long, Draghi argues, policymakers have viewed the growing gap between the EU and US as merely an ‘inconvenience’, rather than the ‘calamity’ it really is.

In truth, Draghi’s bleak assessment actually underestimates the scale of the EU’s economic malaise. Looking at averages across the 27-member bloc obscures the depths of the crisis. Astonishingly, the economies of Italy, Spain and Greece, having been battered by the Euro crisis and EU-mandated austerity, are actually smaller than they were in the late 2000s. Germany, traditionally the EU’s economic powerhouse, is rapidly deindustrialising. In France, the EU’s second-largest economy, debt is spiralling to the kind of levels seen in Italy just before the Euro crisis. The cost of all this foregone growth is a diminished quality of life, stretched public services and decaying infrastructure.