As Europe faces a host of economic challenges, an excessive despondency about its current condition may be one of the more pernicious.
That is the contention of Marieke Blom, chief economist at Dutch bank ING, who has embarked on a mission to correct some of the gloomier misconceptions.
After half a millennium at or close to the centre of the world economy, there is a sense both within and without the continent that Europe is drifting complacently towards its periphery, where it will accept its fate as “a nice museum,” in the words of European Central Bank President Christine Lagarde.
There are few who will argue instead that the glass is half full and that many of the weaknesses attributed to Europe are exaggerated; Blom is one.
The Dutch economist’s concern is that a narrow focus on Europe’s problems without acknowledging its strengths is making businesses wary and pushing households to build ever larger savings. It may also be making elected officials more anxious to protect what they have.
“Sometimes when you’re very concerned as a politician about the current state of the economy, you might want to conserve it a bit more rather than being more forward looking and believing that there are alternatives,” Blom said in an interview.
Blom cites Europe’s response to President Trump’s tariffs as one example; the bloc chose not to retaliate, despite viewing the higher duties as unfair and unwarranted.
“Politicians overestimated the impact that the trade war could have on Europe and were just very, very keen to make a deal,” she said.
The air of doom may also make the unorthodox options presented by parties that are not part of Europe’s traditional mainstream more appealing.
“If people lose hope and if people lose belief in the system because they read day in and day out that the system is bad, then maybe that brings them into the direction of a more populist way of thinking,” Blom said.
After 18 months of interactions with European business leaders and participation in the World Economic Forum’s annual gathering in Davos, Blom concluded that excessive gloom was itself placing Europe’s economic future at risk.
“There was such a sense that the U.S. was going to be the best economy in the world and that Europe was in very, very difficult circumstances, and I felt that it’s becoming so one-sided and it’s probably having an effect,” she said.
Few argue that all is well with the European economy. Growth has been weak since the global financial crisis and the continent lags the U.S. and China in developing new technologies. The latest cause for anxiety is artificial intelligence. Still, a more balanced debate about Europe’s economy may help businesses, voters and policymakers find a better way forward.
“It’s important to talk about it in a different way,” Blom said.
Her contribution is a series of “Pitchbook” notes for clients and others that take a more glass-half-full approach to Europe’s challenges.
Readers of these will discover that while Europe does have an aging and shrinking population, a rising share has joined the workforce. Productivity growth has lagged the U.S., but by much less than would appear if countries in the eastern part of the European Union are taken into account.
The most recent note focuses on energy, with Europe highly dependent on imports from increasingly unreliable sources and at relatively high prices. Blom’s conclusion could stand for the series as a whole.
“Europe has achieved more than the public debate often acknowledges, but less than its ambitions require,” she wrote.
The publication of Blom’s notes comes at a time when the European economy is showing greater resilience than most economists expected, yet there are few celebrations of that resilience; the eurozone was the only major economic area to record a pickup in growth in the three months through June, a period that saw the U.S.-Iran war trigger a sharp rise in energy prices.
That Europe avoided a widely-expected recession in the wake of Russia’s 2022 invasion of Ukraine and President Trump’s tariff rises in 2025 have similarly been little acknowledged.
“Despite weak productivity growth, Europe continues to deliver a good quality of life,” Blom said. “It has a clearer diagnosis of its challenges, a broad roadmap for addressing them, and stronger institutions than it did a decade ago.”
Write to Paul Hannon at paul.hannon@wsj.com
