‘The best on Earth’: Can weak economic growth undermine Europe’s ‘very sophisticated social system’?

Europe's economic growth is lagging behind its major competitors, threatening the sustainability of its social model.

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Former European Commissioner for Trade and former Director-General of the World Trade Organization, Pascal Lamy, has identified a widening disconnect between Europe's social commitments and its capacity to generate economic growth.

Lamy argues that Europe's potential growth rate is only half that of the United States, one-third that of China, and one-fourth that of India, making it difficult to sustain its social model.

The implications of weak growth extend beyond public finances, raising fundamental questions about the long-term sustainability of social protection, economic competitiveness, and the political consensus underpinning the European social contract.

Rising living costs, energy vulnerabilities, and mounting pressures on lower-income households compound social tensions, which cannot be explained by unemployment figures alone.

Lamy advocates for a graduated response to China's expanding industrial and commercial power, including negotiation and stronger trade defenses if necessary.

He warns that any trade conflict with China would raise prices in Europe, exposing a fundamental tension in Europe's emerging economic security agenda.

The challenge for European integration is to reconcile social protection, economic competitiveness, strategic autonomy, and openness in an international economic order increasingly shaped by rivalry rather than cooperation.