Is Europe losing, or choosing?
Where Europe falls behind and where it has chosen a different path, and what that costs.
AI and digital
The usual story says Europe moves slower because it prefers to protect. The data adds nuance.
In 2025, Eurostat asked people who do not use generative AI why not. 64% said they do not need it. Only 7% mentioned privacy or security. In Spain the reasons shift: not knowing how to use it (28%) or not knowing it existed (25%) weigh more. It looks less like a cautious choice and more like a knowledge gap.
Europeans who skip generative AI are not being cautious: they say they don't need it
Reasons for not using generative AI tools, as % of those who did not use them in the last 3 months (aged 16-74)
Loading the chart
Where there is a deeper choice is in how the internet is governed. China adopts technology under state filtering and censorship. The EU as a whole protects online freedom more than the United States, which has slipped since 2023. There are differences within the Union too: the chart shows the most controlled member state each year.
China adopts technology under state control. Europe takes another path
Extent to which the government filters the internet and censors social media in practice (higher = less control)
Loading the chart
One more decision sets Europe apart: most of its notable models are released with open weights that anyone can download and adapt. But with so few models, it is more of a signal than a strategy.
Is Europe betting on open AI?
Notable AI models since 2023 by release type, as % of each bloc's total
Loading the chart
Trade and dependencies
Opening up to the world was a European choice. The price is depending on two partners who no longer get along.
In 2002, China supplied 7.8% of what the EU bought from outside the Union. In 2025, 22.6%. In machinery and transport equipment, which includes solar panels, batteries and electronics, it reaches 35.8%, after peaking at 40.6% in 2022.
More than one in five EU imports now comes from China; in machinery, more than one in three
Share of the EU's imports from outside the Union that comes from China and the US, in %
Loading the chart
Selling works the other way round. The United States buys 21% of what the EU exports outside the Union, almost three times as much as China (7.5%). Europe buys from one giant and sells to the other, which leaves it exposed to the tariffs of one and the competition of the other.
To sell, the EU depends on the US: its first customer, far ahead of China
Share of the EU's exports outside the Union that goes to the US and China, in %
Loading the chart
Productivity and growth
Europe produces less per person than per hour. Part of the difference is that it works fewer hours.
Per hour worked, the EU is at 87% of the US level. Per person, only at 74%. The distance between those two figures comes from the hours each person works and from the share of the population in work.
Per hour worked, the EU is at 87% of the US; per person, only at 74%
EU GDP as % of US GDP (100 = US), per hour worked and per person
Loading the chart
Hours are not the same across Europe. A worker in the Netherlands puts in 31 hours a week; in Germany, 33.5; in the US, 37.5. By contrast, people in Greece, Poland or Lithuania work more than in the US. Spain, at 36.4, is slightly below. Working fewer hours is above all a feature of the richest countries of the west and north.
Western and northern Europe work fewer hours than the US; most of the east and part of the south, more
Hours actually worked per week by each employed person
Loading the chart
Freedoms, well-being and climate
Europe has chosen to cut emissions and protect its population more. Those are choices with costs.
The EU now emits 35% less CO₂ than in 1990. The United States, 7% less. China, more than five times as much. Part of Europe's cut comes from producing abroad many of the goods it consumes.
The EU emits 35% less CO₂ than in 1990. China, more than five times as much
Total CO₂ emissions, index 1990 = 100
Loading the chart
Public social spending is the other big difference. In 2022, France devoted 31.4% of its GDP to it; Italy, 28.2%; Germany, 27.7%; Spain, 26.0%. The US, 19.0%. But it is not a feature of the whole EU: Ireland, the Netherlands and several eastern countries spend less than the US.
France, Italy, Germany or Spain devote 7 to 12 more points of GDP to social spending than the US; several EU countries, less
Public social spending (pensions, health, unemployment, family...), as % of GDP
Loading the chart
Health
Europe chose healthcare paid mostly with public money. That does not make it free for patients.
In the EU, government and social security pay 74.4% of health spending. In the US, 54%, and in China, 57.1%. The gap has narrowed: in 2000, public spending was 44.4% of the total in the US and 22% in China, while in the EU it has barely changed (74.8%).
Three in every four euros of European healthcare are public; in the US and China, just over half
Health spending by government and social security, as % of current health expenditure
Loading the chart
But public funding does not always spare patients from paying. In 2023, US households paid 10.9% of health spending out of pocket; EU households, 14.9%. Only in Luxembourg, France and Croatia was the share lower than in the US. In Bulgaria, Latvia and Greece it is above 34%; in Spain, 20.9%. This is a share: since the US spends so much more, its households pay more money, $1,472 per person against $898 in the EU. Malta and Belgium exceed the US even on that measure.
In 24 of the 27 EU countries, patients pay a larger share of health spending out of pocket than in the US
Direct payments by households (co-payments, medicines, private visits), as % of current health expenditure
Loading the chart
Money and payments
Europeans pay less and less in cash, but do not want to lose it. The digital euro is the EU's answer: public money to pay with a phone.
In 2016, 79% of payments in shops, bars and other businesses in the euro area were made in cash. In 2024, 52%. 55% of consumers now prefer to pay by card or another cashless method, against 22% who prefer notes and coins. Even so, 62% consider it important to keep being able to pay in cash.
Cash has fallen from 79% to 52% of in-store payments since 2016; 55% now prefer cards
Euro area. Share of payments in shops, bars and other points of sale made in cash, and consumers' preferred means of payment, in %
Loading the chart
Cards are filling most of the gap left by cash. In 2025, the euro area made almost 92 billion card payments, 57% of all cashless payments and 36% more than in 2022. That is what worries the ECB: in 2022, 61% of euro area card payments went through international networks such as Visa or Mastercard, and 13 euro area countries rely on them entirely.
Cards account for 57% of cashless payments in the euro area
Euro area. Number of transactions per year by payment instrument, in billions
Loading the chart
The digital euro aims to be a European, public alternative: money issued by the ECB, like banknotes, but for paying in shops, online and offline too. Basic services would be free and there would be a cap on how much each person can hold. What is missing is the law. Parliament and Council are negotiating mainly how banks and payment firms that distribute it are compensated, how distribution works and where that cap lies. Privacy is the other big question: 60% of euro area consumers say they are concerned about their privacy in digital payments.
- June 2023The European Commission proposes the digital euro regulation.
- October 2025The ECB moves the project to its next phase to be technically ready.
- December 2025EU governments, in the Council, agree their position: holding limits, free basic services and regulated fees.
- June and July 2026The European Parliament's Economic Affairs Committee adopts its report (43 votes in favour, 14 against and 1 abstention) and the plenary gives the go-ahead to negotiate with the Council.
- Second half of 202712-month pilot with payment providers, if the law is adopted in 2026.
- 2029Earliest possible issuance. The ECB will decide whether and when to issue it once the law is adopted.
Housing and the cost of living
Europe is, above all, a continent of homeowners. Those who rent at market prices pay for it.
In 2025, 68.5% of the EU population lived in a home they owned, slightly fewer than in 2010 (70.7%). The differences reflect different models. In Slovakia, Romania and Croatia more than 91% are owners, and in Romania almost all of them without a mortgage. At the other end, Germany is the only country where owners are fewer than half (47.2%), followed by Austria (54.2%) and Denmark (58.4%). In the Netherlands, 57.9% of the population lives in an owned home with a mortgage. Spain, at 73.6%, is above average, but ownership has fallen from 79.8% in 2010, and tenants at market rent have risen from 11.9% to 17.4%.
Almost seven in ten Europeans live in a home they own; only in Germany is it fewer than half
Population by tenure status of their home, in %
Loading the chart
Owning or renting makes a big difference to how much housing weighs on household budgets. In 2025, 18.6% of Europeans renting at market prices lived in a household spending more than 40% of its income on housing. Among owners with a mortgage, 5%, and among those without one, 3.8%. For market-rent tenants the share has fallen from a peak of 27.1% in 2014, but it is still almost four times that of owners with a mortgage.
18.6% of tenants at market rent spend more than 40% of their income on housing; among owners, 5% or less
EU population living in households that spend more than 40% of their disposable income on housing, by tenure status, in %
Loading the chart
Energy
The EU has chosen renewables. In electricity it is moving fast; elsewhere, less so. And industry pays far more for power than before the crisis.
In 2024, renewables covered 25.2% of the EU's final energy consumption, up from 9.6% in 2004. In electricity they have reached 47.5%; in heating and cooling, 26.7%, and in transport, just 11.2%. The 2030 target is 42.5%. To reach it, the EU would need to add almost three points a year until 2030; between 2019 and 2024 it added just over one a year on average.
Renewables now cover 47.5% of the electricity the EU consumes, but only 25.2% of all its energy
Share of the EU's gross final energy consumption covered by renewables, across all energy and in each use, in %
Loading the chart
The other side is price. Between 2007 and 2020, electricity for European industry never cost more than 10.72 cents per kWh, excluding VAT and recoverable taxes. With the energy crisis, it reached 20.16 cents in the second half of 2022. In the second half of 2025 it stood at 15.96: 20.8% below that peak, but 45.8% above the first half of 2021. Excluding taxes, the rise is 80.6%. There is no open series that allows this price to be compared with the US and China using the same method.
Electricity for EU industry costs 45.8% more than in early 2021, but 20.8% less than at its peak in late 2022
Average electricity price for industry in the EU, in euro cents per kWh
Loading the chart
Notes through this lens
- One in six new cars in the EU is now electric, but the pace depends on the countryIn 2025, 17.3% of new cars in the EU were battery electric, up from 1.9% in 2019. In Denmark, 67.8%; in Spain, 8.7%; in Croatia, 1.9%.
- How to comply with the AI Act: obligations, costs and the political battle over regulating AIA practical guide to the European AI law after its 2026 reform: what it requires of each company, in what order to act, the problems it is causing, what has already happened in practice and why the UN, Washington and Beijing see it so differently.
- The AI Act and business: legal uncertainty is now the second barrier to AIEurope chose to be first to regulate artificial intelligence. Among companies that consider using it but do not, 54% now say the legal consequences are unclear, up from 46% in 2023.