For decades, American liberals have pointed to Western Europe as a model for enlightened, humane governance. But now that model is leading to economic ruin.
Many of the Western European nations most celebrated by progressives are sinking into economic stagnation and social decay. Years of de-industrialization, bloated welfare states, and punishing energy policies have eroded productivity, gutted middle-class stability, and left many of these countries in a prolonged state of managed decline. And it’s not just conservatives sounding the alarm—Europe’s own central bankers and economists are beginning to admit they don’t have answers.
In February, the Bank of England acknowledged it could no longer “fully account” for the country’s ongoing productivity slump. Things are so bad, in fact, that The Telegraph reported in March that Britain is “no longer a rich country” after 15 years of stagnation.
“Economic stagnation over the past decade is now threatening the U.K.’s position as a place for a high standard of living,” one economist told The Telegraph. Years of near-zero wage growth, productivity collapse, and spending cuts have left the country with neither prosperity through high wages nor security through welfare.
The solution, economists argue, must include significant tax cuts and a rollback of destructive energy regulations – a stark reversal from decades of liberal policies and a vindication of sorts for conservatives in the United States, warning about the consequences of those policies.
One major contributor to Britain’s crisis is the country’s aggressive pursuit of “net zero” energy policies. By imposing heavy taxes on traditional energy sources like oil, gas, and coal – while heavily subsidizing unreliable wind and solar – the government has imposed major costs on both businesses and everyday citizens. According to the Heritage Foundation, the impact has been “devastating” for families simply trying to heat their homes and get to work.
France faces a similarly grim trajectory. As Politico put it in January, “a crash is coming.” Years of runaway spending and deficit financing have left the country with massive debt, and the public has shown little interest in reform. When former Prime Minister Michel Barnier tried to rein in the budget, he was ousted. Today, no party holds a majority in the French National Assembly, creating gridlock that experts warn could spiral into full-blown crisis.
“It will take a budget crisis, maybe a financial crisis, for parties to sit down and say we’re going to do something,” warned Olivier Blanchard, an MIT economist and former chief economist of the International Monetary Fund.
France’s birth rate has also been falling since 2011, a trend that – while better than many of its neighbors – still reflects a continent-wide fertility collapse. It’s not just economic decay that threatens the future of Europe – it’s demographic catastrophe, too.
Germany, the supposed anchor of European prosperity, is in equally dire straits. Even as The New York Times praises the country as “a product of enlightened postwar American policy” for embedding itself in global institutions, Germany’s economy shrank in both 2023 and 2024. Its embrace of net-zero policies – again lauded as “bold” by the Western media – left it reliant on imported natural gas, especially from Russia. When Vladimir Putin invaded Ukraine, German energy prices surged, hammering its economy and forcing industry to a halt.
Worse still, Germany’s birth rate hit a 10-year low in 2024, even as the country continued to import large numbers of refugees – many of whom have failed to assimilate into German society. Social cohesion is fraying, and the economic engine of the European Union is sputtering.
Meanwhile, political elites in all three countries continue to virtue signal about Donald Trump and “threats to democracy” in the United States. According to the European Council on Foreign Relations, about half of U.K. residents said Trump’s 2024 election victory was “bad for Americans and for peace in the world.” But perhaps they ought to focus on their own mounting crises before casting stones across the Atlantic.
Not all of Europe is in freefall, however. Portugal has taken a different path – and is reaping the rewards.
Following intervention from the International Monetary Fund nearly a decade ago, Portugal made painful but necessary fiscal reforms. It reduced its debt load, embraced a more market-oriented approach, and resisted the temptation to endlessly expand its welfare state.
The results have been impressive: a booming export sector, record-breaking tourism, relatively low unemployment, and faster-declining inflation than peer nations like Germany and France. Caixa Bank projects 2.4 percent GDP growth in 2025, citing strong wage growth and encouraging signs across the economy.
Portugal’s success shows that fiscal discipline and pro-growth policies can still turn things around. The question is whether the rest of Western Europe is willing to follow its lead.
And here lies the warning for the United States. For nearly 60 years, Western Europe has been a case study in managed decline – slow, comfortable decay enabled by massive social spending, anti-growth regulation, and a cultural aversion to risk and industry. America is not immune to these same trends. De-industrialization, a ballooning federal budget, and utopian energy mandates are beginning to echo the European model.
As Americans debate their economic future, the evidence is clearer than ever that Europe is a giant flashing warning sign, not a road map. Democrats’ affinity for bigger government, reckless spending, and Green New Deal-style energy policy only accelerates this disastrous trajectory.
That’s why President Donald Trump’s reforms – focused on revitalizing American industry, cutting taxes, reining in the administrative state, and restoring energy independence – are not just important. They are essential.
AMAC Newsline contributor Matt Lamb is an associate editor for The College Fix. He previously worked for Students for Life of America, Students for Life Action, and Turning Point USA. He previously interned for Open the Books. His writing has also appeared in the Washington Examiner, The Federalist, LifeSiteNews, Human Life Review, Headline USA, and other outlets. The opinions expressed are his own. Follow him @mattlamb22 on X.
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