Written by Knowledge Wharton 

Europe has continued to surpass the U.S. when it comes to economic performance in recent years, and that trend looks set to continue through 2019, according to European Commission forecasts. In this opinion piece, Kalin Anev Janse, secretary general and a member of the management board of the European Stability Mechanism (ESM), the eurozone’s lender of last resort, suggests a “Euroboom” is underway, thanks to global investors. He goes on to sketch out critical new steps Europe is taking that he believes will add to the growth numbers. His comments are adapted from his speech at the recent Bloomberg Investment Summit 2018 in Luxembourg.

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Wow — what a difference a year makes! A year ago, Europe woke up to a big shock. Trump had been elected president of the United States. The polls hadn’t seen it coming. They hadn’t seen Brexit coming, either. Would populism and protectionism win in Europe as well? Was this the end of globalization? What would happen to everything the European Union stood for?

Many feared that the populist wave would spread to Europe:  the Netherlands, France and Germany. This would have meant a real revolution in 21st century Europe. But I did not believe that. In January 2017, I stuck my neck out. I said I did not think Europe would see a populist uprising. 

A Europe from the Mind and Heart

Part of the explanation came from the mind: The three countries holding elections have created more wealth for their citizens over the past 60 years than the U.S. or the UK. Income inequality is also much better in those countries, and in Europe in general, than elsewhere.

And last but not least, the EU has brought citizens of close to 30 countries together like never before. Europe has now seen 70 years of peace — which is unprecedented in its history.

Another part of the explanation came from the heart: I am a Dutchman and a Bulgarian, living in Luxembourg. And I just did not get the feeling a populist surge was about to happen. Speaking to my colleagues, friends or family — no one believed it. What we built up in Europe was too precious to give up.

Luxembourg, where the ESM is based, is a great example. Almost half of the workforce in Luxembourg crosses the borders from Germany, France and Belgium every day. That’s 180,000 people! And the monuments of the terrible world wars are only an hour’s drive away. There is hardly a place where European integration is more tangible, and more visible.

A Spectacular 2017 for Europe’s Economy

Luckily, I was proven right. While the start of 2017 wasn’t easy, it has now emerged as a very strong year for Europe.

The election results were pro-European and Europe’s economy started to perform really well. The EU outperformed the U.S. in terms of GDP growth in 2016. It looks like this will be the case again in 2017 once the numbers are in. That is two years in a row.

But what is even more important is per-capita growth. This shows the share of each European citizen in growth. So, it is what people feel in their pocket. And here, things look even better.

This month, the autumn forecasts from the European Commission came out. They predict that the European Union will outpace the U.S. this year, and in 2018 and 2019. It was already the case in 2016. So four consecutive years!

A #Euroboom from Global Investors

This year I met almost 150 investors around the world. Their feedback was bullish. They see Europe as a safe haven. There is lot of uncertainty about what the new U.S. administration can deliver. And the U.K. is struggling with how to deal with Brexit. Investors simply don’t like such uncertainty.