‘The best on Earth’: Can weak economic growth undermine Europe’s ‘very sophisticated social system’?

Can Europe continue to sustain one of the world's most ambitious social models while falling increasingly behind its major economic competitors? For Pascal Lamy, former European Commissioner for Trade and former Director-General of the World Trade Organization, this question lies at the heart of the continent's mounting economic and political tensions. Lamy looks beyond the immediate turmoil in France to identify a deeper European predicament: a widening disconnect between the continent's social commitments and its capacity to generate the economic growth needed to sustain them.

"The common cause of these turbulences is the mismatch between a very sophisticated European social system, which is the best on Earth, and Europe's weak growth," he argues. His diagnosis is particularly stark: Europe's potential growth rate, he maintains, is only half that of the United States, one-third that of China and one-fourth that of India.

The implications extend well beyond public finances. Across Europe's diverse socioeconomic models, weak growth raises fundamental questions about the long-term sustainability of social protection, economic competitiveness and the political consensus underpinning the European social contract.

France's unrest, in Lamy's interpretation, reflects both a distinctive national tradition of political mobilization and broader structural weaknesses shared across Europe. Rising living costs, energy vulnerabilities and mounting pressures on lower-income households compound social tensions that cannot be explained by unemployment figures alone. These pressures also reveal Europe's exposure to geopolitical conflicts over which it exercises limited influence.

Yet China's expanding industrial and commercial power introduces another consequential strategic dilemma. As surging Chinese exports threaten the survival of parts of European industry, Lamy advocates a graduated response: negotiation first, stronger trade defenses if necessary.

"There is a trade war, but this is not the European Plan A," he explains. Europe's preferred strategy, in his view, remains negotiated restraint rather than immediate escalation. But he is equally explicit about the economic consequences of confrontation: "Any trade conflict with China would raise prices in Europe."

His argument exposes a fundamental tension in Europe's emerging economic security agenda. Protecting industrial competitiveness may be necessary to preserve the continent's productive capacity, yet the measures adopted could increase the cost of living for the very households whose economic insecurity is already fueling political discontent. The prospect of Chinese retaliation further raises the question of European solidarity and how the costs of economic confrontation should be shared among member states.

Lamy thus points to a larger challenge for European integration: reconciling social protection, economic competitiveness, strategic autonomy and openness in an international economic order increasingly shaped by rivalry rather than cooperation.

Ultimately, the question is not simply how Europe should respond to China, but whether it can restore the economic foundations of its diverse socioeconomic models while preserving the prosperity, solidarity and social protections that remain central to the European project.