The problem is that everything about this diagnosis is wrong. In economic terms, the reality is that Europe is perfectly capable – if that proves useful – of pursuing several objectives at the same time. In particular, Europe has been running strong balance of payments surpluses for years, while the United States has a huge deficit. In other words, it is the US that spends more within its own territory than it produces, while Europe does exactly the opposite, accumulating its savings in the rest of the world (notably, in the US).

Over the last 15 years, the average annual surplus has reached 2% of Europe’s gross domestic product (GDP), which has not been seen for over a century. This can be seen just as well in southern Europe as in Germany and northern Europe, with levels sometimes exceeding 5% of GDP in certain countries. By contrast, since 2010, the US has accumulated average deficits of around 4% of its GDP.

France is in the middle of the pack, with a near-even balance of payments (with a deficit of less than 1% of its GDP, and a younger population than its neighbors). The truth is that Europe has healthier economic and financial fundamentals than the US – indeed, they are so healthy that the real risk has long been not spending enough. Rather than an austerity treatment, Europe needs, more than anything, an investment treatment if it is to avoid slow agony, as the Draghi Report aptly diagnosed.

However, it must do so in its own European way, by prioritizing human welfare and sustainable development, and focusing on collective infrastructure (training, health, transport, energy, climate). Europe has already overtaken the US in health terms, with a life expectancy gap that continues to expand in the Europeans’ favor. All this while spending just over 10% of GDP on European healthcare, while the US hovers around 18%, proof, if any were needed, of the private sector’s inefficiency and the extra costs it generates, no matter what Elon Musk and his brigades may think. Europe must continue to support its healthcare professionals so that they can continue in this vein. It also has the means to definitively surpass the US in terms of transport, climate, training and productivity, provided it makes the necessary public investments.

If indispensable, Europe could also increase its military spending. However, it remains to be proved that this is necessary. Dedicating billions to the military is an easy way to show that we’re doing something about the Russian threat, but there’s nothing to say that it’s the most effective one. Combined, European budgets already far exceed Russian budgets. The real challenge is to spend these sums together, and, above all, to establish structures to enable collective decisions on effectively protecting Ukrainian territory.

To finance the country’s reconstruction, it’s also time for Europe to not only seize Russian public assets (totalling €300 billion, including €210 billion in Europe) but also private assets, estimated at around €1 trillion, most of which is in Europe, and of which only a few crumbs have been seized to date. This will require the establishment of a genuine European asset registry to finally record who owns what on our continent, a tool that is also indispensable for combating serious crime and pursuing a social and tax justice policy.

Then there’s the essential question. Why isn’t Europe, with its wealth of savings and de facto position as the world’s leading economic and financial power, investing more? One classic explanation is a demographic one: European countries, faced with the prospect of aging populations, are preparing for their citizens’ old age by accumulating tons of savings in the rest of the world. Yet it would be more useful to spend these sums in Europe, to enable the continent’s younger generations to imagine a future for themselves.

Another explanation is nationalism: Each European country suspects its neighbor of wanting to squander the products of its labor, and prefers to keep them under lock and key. Commercial and financial globalization has fuelled deep anxiety – for instance in Sweden, after the 1992 banking crisis, and in Germany, during the 1998-1999 post-unification crisis – and has, in Europe, led many to fall back on saving and an « everyone for themselves » mindset, which has only gotten worse since the 2008 financial crisis.

However, the main factor is, first and foremost, political and institutional. There is no existing democratic framework in which European citizens can collectively decide how best to use the wealth they produce. At present, these decisions are effectively left to a few large groups and a small social segment of corporate executives and shareholders. The solution to this can take many forms, such as a European Parliamentary Union relying on a strong core of countries. What is certain is that the demand for Europe has never been so strong, and that leaders have a duty to respond to it with boldness and imagination, going beyond the beaten track and false certainties.

Thomas Piketty

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