The Rotten Core: Why Europe’s Giants Are Crumbling (Kaiser Bauch, Jun 12, 2026, LEO)
Using the 2010 level as a baseline of 100%, productivity in France and the UK in 2025 would stand at 106% and 107% respectively. For frame of reference, labour productivity in the US economy grew by 25% over the same period, and in Poland by 50%. Yet before one concludes that Poland is simply undergoing catch-up growth and the US is an exception, it is worth noting that even countries like Denmark or Switzerland have grown their productivity by nearly 20%. The annual labour productivity growth in France between 1999 and 2025 was 0.3%, showing that its stagnation started even before the 2008 crises.
Italy, a nation of almost 60 million people and thus the third most populous country in the EU, has become the epitome of economic stagnation. It is in fact one of the few European countries — along with Greece and Luxembourg — whose labour productivity has not grown at all since 2010, currently sitting slightly below that level. Facing strong demographic headwinds with persistently low fertility and the second oldest population on earth after Japan, spending 16.1% of GDP on pensions — the highest figure in the world — and burdened by decades of very high debt that severely limits the government’s fiscal options, it is very hard to imagine significant growth for Italy anytime soon. Stagnation, at this point, seems like the optimistic scenario.
Wasting Brexit has been a tragedy.