Daniel Lacalle writes that Europe's high-welfare model has exhausted competitiveness
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Economist Daniel Lacalle writes that Europe's decades-long model of high welfare, high subsidies, and high taxation has exhausted economic competitiveness, triggering large-scale social unrest. He cites data showing that in 2025, France's public spending accounted for 57.2% of GDP, the second-highest in the EU, 7.7 percentage points above the EU average; in 2024, France's tax burden was 45.3% of GDP, second only to Denmark within the EU; in the second quarter of 2026, France's public debt rose to 119% of GDP, and the fiscal deficit was 5.1% of GDP in 2025. He also notes that government spending across the EU as a whole accounts for 49.5% of GDP, the eurozone's expected growth rate for 2026 is only 1.1%, far below the United States' 2.3%, and the IMF projects France's economic growth rate for 2026 at only 0.4%.
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- ZeroHedge"The state does not create wealth, it only consumes it": Europe's socialist model hits a wall
Daniel Lacalle writes that Europe's decades-long model of high welfare, high subsidies, and high taxation has exhausted economic competitiveness, triggering large-scale social unrest. In 2025, French public spending accounted for 57.2% of GDP, government spending across the EU as a whole reached 49.5% of GDP, and the eurozone's projected growth rate for 2026 is only 1.1%, far below the United States' 2.3%. Multiple European countries face high public debt and massive unfunded pension liabilities, and the IMF projects French economic growth of only 0.4% in 2026.
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