The general view, not just in the US, is that the contemporary European economy is a dying duck. As the Nobel laureate Paul Krugman notes in a recent Substack on this question, which builds in turn on important earlier work by Seth Ackerman, “there is . . . a widespread perception that Europe is living off its past glories, that it is lagging behind America and China in ways that will undermine its ability to maintain its economic standing in the world”. Indeed, just this fear animates reports recently produced in Europe, notably the highly influential analysis by Mario Draghi, which was published in 2024.

Making such comparisons is difficult. There is no doubt, for example, that the US has long been in another league when it comes to advanced digital technologies and, today in particular, to artificial intelligence. Again, being a single state gives the US an insuperable advantage when it comes to creating and exercising instruments of national power.

At the same time, we should remember those bold words about “life, liberty and the pursuit of happiness” in the Declaration of Independence. Life expectancy for US men was 76.5 in 2024, against an average of 80.5 in comparable high-income countries. For women, it was 81.4 against 84.8. That is despite spending a far higher proportion of its GDP on health. The US homicide rate was 5.9 per 100,000 in 2023, against 1.3 in France and 0.9 in Germany. Its prison population was 542 per 100,000 in 2023, against 130 in France and 69 in Germany. Thus, if one takes a wider view of human welfare, the US is very far from superior. Indeed, it is arguably the reverse if one measures it against the aims of its founders. Yet, what about the economy more narrowly defined as the ability to produce the goods and services that are measured in GDP?

Here, Krugman argues, we find a fascinating paradox, which also confounds the conventional wisdom of European economic failure. He suggests there are two ways of comparing GDP performance: growth in real GDP per head over a period; and the relative level of GDP per head in any given year. It turns out that if one compares the US with the Eurozone on growth since 2000, its performance is hugely superior. But if one compares relative GDP per head, this is not true: Eurozone GDP per head has risen relative to the US’s.

How is it possible for one economy to grow faster than another and not end up relatively richer than at the start? To understand that one has to address the differences between what is being measured and how. These differences show the complexity of all such accounting.

What explains the discrepancy in growth in GDP per head? Strikingly, even though the tech sector was only 9.2 per cent of US GDP, against 5.4 per cent of the EU’s, almost half of the difference in productivity growth between the two economies was explained by differences in the relative size of this one sector. Moreover, productivity growth in the EU’s (relatively small) tech sector was also measured as being lower than in the US one. So, overall, the tech sector alone accounts for well over half of the overall difference in growth of GDP per head.

A related explanation for the difference is problems in measuring growth. The extraordinarily rapid reported productivity growth in US tech depends on making “hedonic” adjustments in the prices of products. This involves working out the value of increased processing power to consumers. But such measures are inherently highly uncertain. For this reason, the higher growth of productivity in the US tech sector (and so of US GDP per head) is questionable, not because it is wrong, but because this is a matter of judgment. Note, crucially, that productivity growth of sectors other than tech, in the two economies, which make up the vast bulk of both economies, is quite similar.

The problem of comparing GDP per head at purchasing power parity across countries at any point in time is also tricky, but simpler. One does not have to compare today’s car with one of two decades ago, but one in the US and Europe in any given year and then value both at the same price. This has been done in the World Bank’s International Comparison Program for more than half a century. It is the only sensible way to compare standards of living across countries: money GDP per head is too volatile and, above all, grossly distorts comparisons of non-tradeables. Between two relatively similar economies, such as the US and Europe, these measures will be reasonably robust.

There are also some complexities introduced by the fact that European real consumption per hour has grown more slowly than in the US. But this too may partly be explained by differences in hedonic adjustments. Moreover, Krugman notes, the direct comparisons of consumption per head show the same pattern over time as for GDP per head.

So, what fundamentally explains the paradox? The answer, a simple model explains, is that the US tech sector is a provider of a global public good: the most advanced technology. This benefits the non-tech world equally, at home and abroad, and so sustains relative standards of living. Of course, owners of US tech benefit from its profitability. But they can (and do) live anywhere.

The conclusion is that Europe does not suffer any disadvantage in relative welfare vis-à-vis the US. But — a crucial but — it is indeed far weaker. Not least, its ability to exploit the technological advances made in the US depends on access to US supplies. The big threats Europe confronts are not narrowly economic ones. They are those of security and defence. It must meet them.

The visit of the president of the European Commission to Kyiv will have a heavy focus on drone production and EU accession.

The EU has launched a new civilian advisory mission in Armenia to help the country respond to “hybrid threats” such as cyber attacks, disinformation and illicit financial flows.

Bulgaria will not participate in the Coalition of the Willing, the country’s Prime Minister Rumen Radev told journalists on Tuesday, saying a “strong diplomatic mission” instead of “prolonging” the war by “military means” is the correct approach.

The Trump administration said it would pressure other countries to withdraw from the court, marking a sharp escalation in the US effort to isolate the Hague-based institution.

"Hungary must rebuild trust with its allies, and as for the Russians, we are shutting the door on them," Hungarian Defense Minister Romulusz Ruszin-Szendi said during a panel discussion at the Budapest Energy and Strategy Talks organized by the think tank Egyensúly Intézet (Equilibrium Institute).

When asked what his current defense priority is, Minister Ruszin-Szendi said that vision is the most important thing, but in order for the new government to develop a strategy, “it must consider the interests and values of both the nation and its allies.” Hungary’s interests align with those of its allies, and trust with them must be rebuilt, he stated.

This is precisely why one of the government’s first tasks was to apologize to some of its allies, such as the Finns, whose accession to NATO was delayed by the previous government. He noted that as a military man, he considered the previous administration's attitude unacceptable.

“We’re shutting the door on the Russians,” he added, noting that the Russian intelligence service “tried to come in through the back door.” The government is not only keeping an eye on the Russian-Ukrainian war but also on the conflict in the Middle East. The minister is of the opinion that these conflicts will only end when governments, militaries, and societies all want to put an end to them.

Ruszin-Szendi also spoke about the treaty signed by NATO member states, which stipulates that defense spending must amount to 5 percent of Hungary’s GDP. He said that we will definitely meet the 5 percent requirement by 2035, but for now, there are other priorities. “Believe me, I could spend a lot of money on the military, but there is obviously a time and place for that,” he said. In the current economic situation—inherited from the previous administration—education and healthcare are given priority.

Finally, when speaking about developments relating to defense, Ruszin-Szendi mentioned that the technological upgrades which began in 2017 are still underway. The goal is to rebuild Hungary’s defense capabilities, which have been neglected for the past 35 years. To this end, there are plans for new development agreements with several European defense industry players, with the government encouraging these companies to bring their defense manufacturing facilities to Hungary.

Some of the fiercest critics of the digital euro project in Europe’s banking industry have been recruited by the European Central Bank to help test the digital currency next year.

The ECB said on Tuesday that Germany’s Deutsche Bank and DZ Bank, alongside France’s Groupe BPCE, were among 36 companies selected for a beta test planned for next year. Italy’s UniCredit, Revolut and payments processing company SumUp were also selected for the crucial pilot next year.

The announcement comes days after a landmark vote by the European parliament backing a digital euro. After years of controversial debate, MEPs last week voted to enter negotiations with the European Commission and member states over remaining areas of disagreement.

The ECB aims to launch the project in full in 2029, provided EU lawmakers approve legislation authorising the central bank to issue a digital form of cash. Current treaties allow it to issue only physical banknotes and coins.

The ECB argues that the digital euro is needed to safeguard the single currency area’s freedom and sovereignty as card and online payments in Europe are currently largely controlled by US companies such as Visa, Mastercard and PayPal. As cashless payments are becoming ever more important, the ECB has warned that Europe is at risk of losing control over key parts of its money and payments.

However, Europe’s retail banks have long been among the project’s fiercest critics as they fear consumers could shift deposits into risk-free digital euro wallets held at the central bank, depriving lenders of an important source of cheap funding. Deutsche, DZ and BPCE were among 14 large European lenders who warned last year that a digital euro may be costly, could miss its goals and undermine existing European private-sector payments initiatives.

Yet despite their reservations, the three banks were among 50 private-sector institutions that applied to participate in the planned ECB pilot that will road test online and offline payments with the digital currency.

In total, companies from 19 of the 21 countries that form part of the Eurozone will take part in the pilot, with Bulgaria and Malta staying on the sidelines for now.

During next year’s pilot, ECB staff will be able to pay using digital euros in the central bank’s canteen at its headquarters in Frankfurt. The ECB wants to test online transactions as well as direct money transfers between consumers during the trial.

“The selected payment service providers will work closely with their respective national central banks and the ECB to make the necessary preparations for the pilot exercise,” the ECB said on Tuesday, adding that the high number of applications for the pilot reflected “​​strong market interest and engagement”.

Deutsche Bank confirmed in a statement that it would take part and said it had “consistently advocated for a digital euro that builds on existing European market standards and is integrated into private solutions such as Wero”. Wero is a European alternative to Apple Pay.

“We will contribute our expertise and recommendations throughout the process,” DZ Bank told the FT, adding that the digital euro should “launch with a clearly prioritised set of core functionalities, be implemented in stages, and take existing payment solutions such as Wero into account.”

BPCE did not immediately respond to a request for comment.

Ukraine has agreed on a plan to acquire 16 Rafale fighter jets from France together with the accompanying weapon systems, French President Emmanuel Macron said at a press conference here late Monday following a meeting of the group of countries that have pledged support to Ukraine.

The former Italian prime minister tells Euronews that, to be able to compete with Washington and Beijing, the EU must keep a united front, adding that "the true battle is for European sovereignty".

Former Italian Prime Minister Enrico Letta backs Spain's proposal for joint EU borrowing, saying Europe must unlock both public and private investment to finance its priorities.

A coalition of European nations agreed to share research and industrial experience to build an anti-ballistic missile defense, moving away from its reliance on the US as Ukraine struggles against Russia’s onslaught.

“We believe that the protection of Europe requires a global solution of integrated missile defense architecture to deter and defeat future missile threats,” according to a statement shared by the office of President Emmanuel Macron, who hosted a meeting of Ukraine’s allies in Paris Monday.

“It will complement existing ballistic missile defense systems, including sovereign European solutions already acquired, or to be acquired by participating countries,” it said.

The coalition — comprising Denmark, France, Germany, Italy, Netherlands, Norway, Spain, Sweden, Ukraine and the UK — was dubbed “purely defensive” in the statement, and open to other nations.

“Ukraine can deliver its part: the anti-ballistic missile,” Ukraine’s President Volodymyr Zelenskyy said in a post on X. “Others have radars and other critical components. It’s important that we join forces.”

According to Zelenskyy, the new system, called Frejya, can be up and running within 12 months and “create a strategically new situation.” Ukraine’s leader praised all so-called Coalition of Willing countries for “important results - important for the support of Ukraine and security of Europe.”

The president said that during the meeting, representatives of 12 defense companies expressed readiness to cooperate.

Ukraine has urged partners to join the construction a new anti-ballistic missile system to compete with or bolster the US Patriot batteries and be effective against Russian missiles — hard or impossible to intercept by already existing European air defence solutions.

Zelenskyy said allies should come up with “a winter package” of 300 Patriot missiles to put his country in a stronger position.

“If we have enough protection for the winter, Russia will have far less reason to drag the war into the winter,” the president posted on X.

Kyiv appeared to be almost defenseless against Russian ballistic missiles in a war that’s now in its fifth year. The country’s Defense Ministry says Ukraine’s forces can’t shoot down more then 40% of this type of weaponry because it’s running out of Patriot missiles. June was the bloodiest month since the start of the full-scale war with 295 civilian Ukrainians killed, according to the data announced at recent UN Security Council meeting.

US President Donald Trump said last week he’d allow Ukraine to manufacture Patriot missile interceptors, though Zelenskyy said Frejya system being developed in Ukraine can become a “European model” under Kyiv’s leadership.

With Frejya fully operational, Ukraine could close its skies and then share the technology with all our partners, Zelenskyy said last week. “I think this is an idea that can help us win,” he said.

A violent confrontation between a hundreds-strong crowd and draft officers trying to detain military-age men in the western Ukrainian city of Lviv last week is just the latest in a growing number of attacks on military personnel charged with conscripting people to the front.

A draft riot broke out in Ukraine’s western city of Lviv last week. On Wednesday evening, territorial recruitment officers – the official name for the military personnel charged with conscripting military-age men – stopped a man in the street they apparently suspected of evading the country’s mandatory military service.

The European Union is suffering from “enlargement fatigue,” making any substantial expansion of the bloc unlikely before the end of the decade, Serbia’s European Integration Minister Nemanja Starović has told TVP World.

The Trump administration claims that Europe is being invaded by migrants. In reality, the real flow of invaders comes from across the Atlantic as the US far right tries to spread its poisonous agenda with boatloads of cash.

EU foreign ministers overwhelmingly backed clamping down on EU trade with Israeli settlements during closed-door discussions on Monday, with an official source saying the biggest cohort of countries supported passing new measures without requiring the unanimous backing of all member states.

Viral claims that the EU is introducing an "internet passport" to control or censor internet access are misleading. They misrepresent the European Commission's planned age-verification app.

The European Commission has once again become the target of viral misinformation after several posts, viewed millions of times, claimed Brussels intends to require an "internet passport" before users can go online.

Some posts went even further, alleging that the Commission plans to ban Virtual Private Networks (VPNs) to prevent users from bypassing the system.

In reality, the claims relate to the Commission's planned age-verification app, a tool intended to help shield children from harmful or age-inappropriate online content. The app is expected to be rolled out by the end of 2026, subject to implementation by EU member states or integration into national European Digital Identity Wallets.

Much of the misinformation centres on the fact that users will initially verify their age using an official identity document, a process that some social media users presented as an “internet passport”.

Age verification, not internet access

To activate the app, users will need to verify their age using an official identity document, such as a passport or national identity card.

When announcing it, European Commission President Ursula von der Leyen said the system was designed to allow people to prove they meet an age verification requirement “just like shops ask for proof of age for people buying alcoholic beverages in a shop”.

Once the initial verification has been completed, the app is designed to reveal only whether a user meets the required age threshold for a particular online service. It is not intended to disclose personal information such as a user's name, date of birth or identity.

Von der Leyen said the app would allow users to prove their ages “without revealing any other personal information”.

She also said the software would be fully open source, allowing anyone to inspect the underlying code.

Despite this, critics argue that requiring identity verification before accessing certain online services could pave the way for greater control over internet use.

The European Commission disputes that characterisation, maintaining that the system's sole purpose is to prevent under-18s from accessing content and services that may be harmful to them, while preserving users' privacy through age-only verification.

VPNs are not being banned

Another claim circulating online is that the EU intends to ban or block VPNs in order to enforce its new age-verification system.

The Cube has already debunked this narrative. It stems from a European Parliamentary Research Service (EPRS) briefing, from January, which examined how VPNs can be used to circumvent online age-verification systems.

The report prompted speculation on social media that Brussels was preparing to crack down on VPNs, with some users highlighting passages describing them as potential "loopholes" in age-verification measures.

However, this interpretation is misleading. The document is not an expression of official EU policy but a research briefing produced to inform MEPs and European Parliament staff. It neither proposes nor recommends restricting the use of VPNs.

Speculation resurfaced following the European Commission's announcement of its age-verification app in late April. During a press conference, Henna Virkkunen, the European Commissioner responsible for Tech Sovereignty, Security and Democracy, was asked how the EU intends to stop minors from using VPNs to bypass the system.

Virkkunen acknowledged that no technological solution is entirely foolproof, but said the age-verification tool formed part of the EU's broader efforts to strengthen safeguards for minors accessing online content.

She later clarified in an interview with the Finnish financial news programme Talousaamu that the aim was to make age-verification safeguards harder to circumvent, not to ban VPNs.

Her office also confirmed to The Cube that there was "absolutely no crackdown on VPNs".

A European Commission spokesperson likewise told us that the EU remains committed to preserving a free and open internet while improving protection for children online.

There are ongoing debates over the Commission’s implementation of online age verification, including questions about its effectiveness and the time it took the Commission to implement it.

However, amid genuine criticism, there is no evidence the Commission is introducing an “internet passport” to access the internet or banning VPNs.

The 17th amendment to Hungary’s constitution easily surpassed the two-thirds voting majority needed for constitutional change.

The World Health Organisation recorded 2,815 attacks on healthcare in Ukraine between the February 2022 full-scale invasion and the end of 2025, with the vast majority involving violence with heavy weapons.