Productivity and growth
The EU weighs as much in the world economy as the United States, but it produces less per hour and much less per person. The question is how much of that gap is lagging behind and how much is choice.
Between two giants
China is now the world's largest economy. The EU and the US weigh almost the same, but they do not produce the same.
Measured in purchasing power, China's economy has been larger than the US's since 2014 and now accounts for 19.1% of world GDP. The EU (14.4%) and the US (14.7%) are practically level, and both weigh far less than in 1990, when each was above 20%.
China is now the world's largest economy in purchasing power. The EU and the US weigh almost the same
Each economy's share of world GDP, measured in purchasing power parity, in %
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The difference lies in productivity. In 2024, each hour worked in the EU produced 69.8 dollars, against 80.6 in the US: 13% less. In 2019 the gap was 7%. China, at 19.7 dollars per hour, is still far behind both.
For every hour worked, the EU produces 13% less than the US, and the gap has widened since 2019
GDP per hour worked, in constant 2021 dollars at purchasing power parity
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Is Europe losing, or choosing?
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
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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
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Europe from within
Since 2004, the east has closed in on the European average. The south has fallen behind.
In 2004, Romania's GDP per person was 35% of the European average; in 2025, 78%. Poland has gone from 52% to 81%, and Lithuania from 50% to 87%. The south has gone the other way: Greece has fallen from 95% to 68%, Italy from 114% to 96% and Spain from 101% to 92%.
Eastern Europe has closed in on the average since 2004. The south has not
GDP per person at purchasing power parity, index EU = 100, 2004 and 2025
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By region, the gaps are even wider. The Dublin region (268% of the average), Luxembourg (245%) and Hamburg (196%) top the list. In Spain, the Madrid region reaches 125% and Melilla stays at 59%.
Capital regions drive European income; the south and east sit below average
GDP per person by region at purchasing power parity, as % of the EU average, 2024
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Notes on this theme
- US public debt exceeds 120% of GDP; the EU's, 80%In 2001, the EU owed more than the US. Today the US owes 122.3% of its GDP and the EU 81.6%. Within the EU, 12 of the 27 countries exceed the 60% set in the Treaty.
- The Draghi report, two years on: what it asked for, what has been done and what the data say todayIn 2024 Mario Draghi warned that Europe faced an existential challenge: it grows less, innovates less, pays more for energy and relies on others for its security. Two years on, defence spending has risen sharply, but investment and energy remain far from what he asked for.
- The Draghi report in two charts: Europe grows less and needs to invest much moreSince 2000, the US economy has grown 69% and the EU's 41%. Draghi estimated that closing the gap requires an extra 750 to 800 billion euros of investment a year. Two years on, a quarter of his recommendations have been implemented.
Other themes
- AI and digitalThe EU is adopting artificial intelligence faster than ever, but almost all the technology it uses is designed elsewhere.
- Trade and dependenciesFor decades the EU was the world's largest trading power. China has overtaken it, and Europe increasingly depends on others to buy and to sell.
- Freedoms, well-being and climateEurope lives longer, pollutes less and protects freedoms more than the United States or China. But those advantages are not equal across its countries, and some are eroding.
- HealthThe EU spends far less on health than the US, and people live longer. Most of it is paid with public money, but each country differs in how many doctors it has and how much patients pay themselves.
- Money and paymentsThe euro area holds more cash relative to its economy than the US and China, but uses it less and less to pay. Cards are filling the gap, largely through non-European networks. The digital euro is the EU's bet to keep public money present in electronic payments.
- Housing and the cost of livingHousing has risen less in the euro area than in the US, and so have rents. Almost seven in ten Europeans live in a home they own, but those renting at market prices bear far higher costs, and the gaps between countries in cost and space are huge.
- EnergyThe EU uses less than half as much energy per person as the US, and China has now overtaken it. Its electricity relies far less on fossil fuels, but renewables cover only a quarter of all its energy, and industry pays considerably more for power than before the 2022 crisis.