In recent years, EU policy has been influenced by what some see as a selective reading of the Draghi and Letta reports on Europe's future. In a nutshell, the narrative is one of European decline vis à vis the United States, leading to a menacing productivity gap that entails a growing divide on GDP and, ultimately, wealth and growth. Only massive reforms and simplification can reverse this decline.

By the EESC's Workers' Group

The relative waning of Europe's weight in the world is impossible to deny, given the development and growth of the rest of the planet. The train of thought from the productivity gap points, nevertheless, to the differences with the US. 

What if, however, there was no such thing as a growing divide? To begin with, the comparisons depend on indicators that are calculated with differing statistical methods, and to continue, they vary depending on the metric we choose. Productivity measured at current prices (year by year) has not declined in the EU compared to the US. Productivity measured at constant prices (one year as reference) has done so. 

Both have their merits, and have sparked a notable discussion among economists, with Krugman questioning the decline narrative and Garicano leading it, among others. As Krugman explains, this apparent contradiction is explained by the role of the IT sector, which contributes little to overall US production, but accounts for half of its productivity gains. This means that Europe's purchasing power, its material standard of living, is holding against the US. It might explain why, despite the growing riches of the US, eight of the ten countries with the highest human development standards are European, with Hong Kong and Australia completing the ranking. 

This demands a more thorough analysis of the simplification and competitiveness narrative, and its fatalistic implications for the economy, welfare, and the environment. If the last two years' worth of EU policy are largely based on a statistical gimmick and a partial and probably biased reading of economic data and reports, the potential destructive consequences of solving the wrong problem could be disastrous for Europe, particularly when they are in and of themselves damaging for social and environmental sustainability in many cases, justified solely for the greater need and the greater good. It might be time to bridge the productivity trap.