From finding its place in the global world to competing for business competitiveness, Europe is facing an increasing number of challenges it struggles to deal with, political and business leaders told CNBC to a bystander at the Ambrossetti Forum. “In a way, we see Europe suffering from cholesterol,” Arancha González Laya, dean of the University of Science PO and dean of the Spanish Foreign Minister, told CNBC on Saturday. “The problems accumulate. None of these problems are ruining your health today, but the problems accumulate and one day you will know that you have a heart attack,” he added. Others have similar tones, with political adviser and former German Secretary of State Marcus Carver describing Europe as “a bit like a rabbit in the headlights,” stating that the continent is struggling with years of global rules-based systems and order disruption. “Europe doesn’t know how to respond to it, because a rules-based world gave Europe all the advantages you want. Low defence spending, high consumer confidence, and no worries. So you could almost fly political and economic systems with autopilots. Instead, Kerber flagged it: “Europe has awakened what some political scientists call the Society of Sensitive Life. I mean a world that was more or less governed and influenced by the United States, the People’s Republic of China, India, the EU, and Russia.” Europe is not equipped to manage multilateral threats and opportunities in play, he added. Lack of Competitiveness One of the main accusations against the continent is the failure to enact reforms to increase economic competitiveness against trade rivals in the US and Asia. But defenders of the region say President Donald Trump’s trade wars and tariffs, as well as the conflict in Ukraine, have less time for inward action to enhance the continent’s appeal as a place to invest and do business. Europe knows it has problems. In 2024, the Competitiveness and Single Market Report was compiled by former Italian Prime Ministers Mario Draghi and Enrico Letta, detailing the challenges facing the continent. These factors are slowing Europe to the US with many different indicators, and Draghi’s report highlights that a “wide gap” in GDP has been opened between the EU and its historic Atlantic allies, driven primarily by a more pronounced slowdown in European productivity growth. “European households pay prices at the former standard of living. Per capita, since 2000, actual disposable income in the United States has almost doubled,” the report states. The International Monetary Fund data also reflects a slow decline in the EU’s economic output. Measurements regarding the purchase of power parity (used to compare economic well-being, living standards, and production by adjusting for differences in price levels), the EU’s global GDP share fell from 27.5% in 1980 to 14.1% in 2025. “One of the European Commission’s first initiatives in this mission was to set up what we call the ‘competitive compass.’ In fact, it has built up a lot in the reporting of Draghi and Leta that is currently being implemented. “There are factors in the Draghi and Letta report that can accurately see factors including cutting bureaucracy, such as closing the innovation gap, such as using the full potential of the EU single market. All of this is solidified with everything that is being implemented in the EU agenda,” he added. However, Spain’s Minister of Economy, Trade and Business, Carlos Querpo told CNBC that Europe needs to stop postponing reforms to make it more competitive. “We know what a big roadmap is. We know all the (competitive) recommendations from (Mario) Draghi (Enrico) Retta, and we can agree with most of them… But we need to avoid this sense of frustration that we can’t really push all the recommendations in Europe.” “There are elements that need to be more optimistic about what we can do and avoid these pessimistic stories about Europe,” he pointed out. Cuerpo said competitiveness is a medium-term effort. “It needs to permeate short-term behaviour every day. That’s the most difficult part… you need to drive your competitiveness.”
The problems in Europe are on the rise and we are struggling to fix them
