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Donald Trump's security policy document offers a flawed assessment of the European Union. The document asserts that open-border policies and so-called "woke" policies represent an existential risk to European civilization. Yet, this perspective is based on a fundamental misreading of the reality. The true danger confronting Europe is not societal but technological and economic lag.

The Stark Growth Gap Between the US and Europe

Statistics paint a sobering picture. From 2008 and 2023, US GDP grew by eighty-seven percent, compared to a paltry thirteen and a half percent increase for the European Union. During this time, EU GDP per capita fell from over three-quarters to just 50% of the American figure. Remarkably, even Mississippi now boasts a greater average income than several leading European economies like France and Italy.

Today, roughly 50% of the world’s top fifty tech companies are American, while only four are European.

The Technological Shortfall: A Critical Question

This widening disparity is driven by superior efficiency gains in the United States, fueled by technological innovation and better use of resources. The scene of global tech leadership is overwhelmingly American. Over the past five decades, hundreds of American startups have grown into enterprises valued at over ten billion dollars, compared with just 14 in Europe.

This gap raises a vital issue: In the race for tomorrow's sectors like semiconductors, AI, and fusion energy, where does the EU stand? Most analysts concede it is essentially a contest between two involving the United States and China, with European nations starting at a significant handicap.

Underlying Factors of the Continent's Technological Lag

A number of key reasons explain this technological divide.

• Financing Ecosystem: The US boasts a far deeper and more dynamic system for financing new ventures. The EU has yet to establish a true capital markets union, which caps the scale of new firms.
• Regulatory Fragmentation: Complex and divided regulation hamper European business. A American entrepreneur can introduce a product under a single set of laws to access a consumer base of over 330 million. The European Union, despite a larger population, is divided among twenty-seven different national systems, creating huge internal barriers.
• Mindset Differences: Views on entrepreneurial failure vary greatly. In parts of Europe, business failure was historically viewed with stigma, whereas in the US, it is often seen as a valuable lesson.
• Military Investment: The US benefits from a deeply integrated academic-military-industrial complex. Europe's long-term lack of spending in military capabilities has weakened its capacity for pioneering research.

A Path Forward: Grounds for Hopefulness

Despite these hurdles, one can find causes for optimism. European leaders are increasingly aware of the existential challenge and have started to advance substantial change. Key reports on European competitiveness and the internal market highlight the necessity of sweeping reforms.

Given appropriate incentives and regulatory reforms, these assets could support much higher levels of commercial innovation.

Europe retains significant strengths: high-quality human capital, top-tier education systems, and premier research institutions. Coupled with a vast domestic consumer base and substantial household savings, these elements have the potential to trigger a surge of investment and entrepreneurship.

Crucially, even if the EU does not take the lead in developing cutting-edge technologies, it can still significantly boost economic output by adopting and adapting advancements from elsewhere.

An Inflection Point

Europe now stands at a critical crossroads. As the saying goes, economic erosion often happens "slowly, then all at once". So far, Europe's technological decline has been steady. But, without decisive action to address its structural weaknesses, today's slow erosion could turn into a rapid and permanent loss of world influence.