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BQ 3A News > Blog > UK > Welcome to post-growth Europe – can someone settle for this new political truth?
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Welcome to post-growth Europe – can someone settle for this new political truth?

July 7, 2025
Welcome to post-growth Europe – can someone settle for this new political truth?
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Throughout a lot of Europe, the engines of monetary development are sputtering. In its newest international outlook, the World Financial Fund (IMF) sharply downgraded its forecasts for the United Kingdom and Europe, caution that the continent faces continual financial bumps within the highway.

Globally, the Global Financial institution just lately stated this decade might be the weakest for development because the Nineteen Sixties. “Outside of Asia, the developing world is becoming a development-free zone,” the financial institution’s leader economist warned.

The United Kingdom financial system went into opposite in April 2025, shrinking via 0.3%. The announcement got here an afternoon after the United Kingdom chancellor, Rachel Reeves, delivered her spending evaluation to the Area of Commons with a speech that discussed the phrase “growth” 9 occasions – together with promising “a Growth Mission Fund to expedite local projects that are important for growth”:

I stated that we needed development in all portions of Britain – and, Mr Speaker, I intended it.

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Throughout Europe, a long-term financial forecast to 2040 predicted annual development of simply 0.9% over the following 15 years – down from 1.3% within the decade sooner than COVID. And this forecast used to be in December 2024, sooner than Donald Trump’s competitive tariff insurance policies had reignited commerce tensions between the United States and Europe (and just about all over the place else on the earth).

Even sooner than Trump’s price lists, the truth used to be transparent to many financial mavens. “Europe’s tragedy”, as one columnist put it, is that it’s “deeply uncompetitive, with poor productivity, lagging in technology and AI, and suffering from regulatory overload”. In his 2024 record on Ecu (un)competitiveness, Mario Draghi – former president of the Ecu Central Financial institution (after which, in short, Italy’s top minister) – warned that with out radical coverage overhauls and funding, Europe faces “a slow agony” of relative decline.

So far, the standard reaction of electorates has been accountable the policymakers and substitute their governments on the first alternative. In the meantime, politicians of all sunglasses whisper candy nothings about how they on my own understand how to seek out new resources of development – maximum often, from the magic AI tree. As a result of development, with its extensively authorized energy to ship higher productiveness and prosperity, stays a key pillar in Ecu politics, upheld via all events because the benchmark of credibility, development and keep an eye on.

However what if the sobering reality is that development is not reliably potential – throughout Europe no less than? Now not simply this 12 months or this decade however, in any significant sense, ever?

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The Insights segment is dedicated to fine quality longform journalism. Our editors paintings with teachers from many alternative backgrounds who’re tackling a variety of societal and clinical demanding situations.

For a continent like Europe – with restricted land and not more empires to take advantage of, getting older populations, primary local weather considerations and electorates tough ever-stricter boundaries to immigration – the prerequisites that after underpinned secure financial growth would possibly not exist. And in the United Kingdom greater than maximum Ecu nations, those problems are compounded via top ranges of long-term illness, early retirement and financial inactiveness amongst working-age adults.

Because the Ecu Parliament advised again in 2023, the time is also coming once we are pressured to appear “beyond growth” – no longer as a result of we need to, however as a result of there’s no different lifelike possibility for plenty of Ecu international locations.

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However will the general public ever settle for this new truth? As knowledgeable in how public coverage can be utilized to become economies and societies, my query isn’t whether or not a global with out development is morally awesome or extra sustainable (although it can be each). Quite, I’m exploring if it’s ever imaginable for political events to be truthful a couple of “post-growth world” and nonetheless get elected – or will citizens merely flip to the following chief who guarantees they know the name of the game of perpetual development, on the other hand sketchy the proof?

A street sign showing an arrow going back on itself, pointing to Europe/

Which manner is the appropriate manner?
Pixelvario/Shutterstock

What drives development?

To grasp why Europe specifically is having one of these onerous time producing financial development, first we want to perceive what drives it – and why some nations are higher positioned than others in the case of productiveness (the facility to stay their financial system rising).

Economists have a moderately simple resolution. At its core, development comes from two components: labour and capital (equipment, generation and the like). So, in your financial system to develop, you both want extra other folks operating (to make extra stuff), or the same quantity of staff want to develop into extra productive – via the usage of higher machines, gear and applied sciences.

The primary factor is labour. Europe’s working-age inhabitants is, for probably the most phase, shrinking rapid. Because of many years of declining beginning charges (related with emerging existence expectancy and better earning), at the side of growing resistance to immigration, many Ecu nations face declines of their operating inhabitants. “”). Rural and concrete areas of Europe alike are experiencing structural getting older and depopulation traits that make conventional financial development ever tougher to reach.

Traditionally, inhabitants development has long gone hand-in-hand with financial growth. Within the postwar years, nations equivalent to France, Germany and the United Kingdom skilled booming beginning charges and primary waves of immigration. That increasing labour pressure fuelled commercial manufacturing, client call for and financial development.

Why does financial development subject? Video: Financial institution of England.

Growing old populations no longer simplest scale back the scale of the energetic labour pressure, they position extra power on well being and different public services and products, in addition to pension techniques. Some areas have tried to compensate with extra liberal migration insurance policies, however public resistance to immigration is powerful – mirrored in higher give a boost to for rightwing and populist events that suggest for stricter immigration controls.

Whilst the United Kingdom’s median age is now over 40, it has a birthrate merit over nations equivalent to Germany and Italy, thank you in large part to the inflow of immigrants from its former colonies in the second one part of the 20 th century. However whether or not this interprets into significant and sustainable development relies closely on labour marketplace participation and the standard of funding – in particular in productivity-enhancing sectors like inexperienced generation, infrastructure and training – all of which stay unsure.

If Europe can’t depend on extra staff, then to reach development, its present staff should develop into extra productive. And right here, we arrive at the second one part of the equation: capital. The standard hope is that investments in new applied sciences – in particular AI because it drives a brand new wave of automation – will make up the adaptation.

In January, the United Kingdom’s top minister, Keir Starmer, referred to as AI “the defining opportunity of our generation” whilst saying he had agreed to take ahead all 50 suggestions set out in an impartial AI motion plan. To not be outdone, the Ecu Fee unveiled its AI continent motion plan in April.

However Europe could also be falling at the back of within the international race to harness the industrial doable of AI, trailing each the United States and China. The United States, specifically, has surged forward in growing and deploying AI gear throughout sectors equivalent to healthcare, finance, production and logistics, whilst China has leveraged its massive state-supported, open-source commercial coverage to scale its virtual financial system.

Keir Starmer proclaims the United Kingdom’s AI motion plan. Video: BBC.

Regardless of the EU’s concerted efforts to improve its virtual competitiveness, a 2024 McKinsey record discovered that US firms invested round €700 billion extra in capital expenditure and R&D, in 2022 on my own than their Ecu opposite numbers, underscoring the continent’s funding hole. And the place AI is followed, it has a tendency to pay attention positive factors in a couple of celebrity corporations or towns.

If truth be told, this disconnect between firm-level innovation and nationwide development is likely one of the defining options of the present technology. Tech clusters in towns like Paris, Amsterdam and Stockholm would possibly generate unicorn startups and record-breaking valuations, however they’re no longer sufficient to transport the needle on GDP development throughout Europe as a complete. The positive factors are incessantly too slender, the spillovers too susceptible and the social returns too asymmetric.

But admitting this publicly stays politically taboo. Can any Ecu chief glance their voters within the eye and say: “We’re living in a post-growth world”? Or slightly, can they are saying it and nonetheless hope to win every other election?

The human want for development

To be human is to develop – bodily, psychologically, financially; within the richness of {our relationships}, creativeness and ambitions. Few other folks can be proud of the possibility of being consigned to do the similar activity for a similar cash for the remainder of their lives – because the cave in of the Soviet Union demonstrated. Which makes the possibility of promoting a post-growth long term to other folks sound virtually inhuman.

Even those that care little about cash and good fortune normally try to create higher futures for themselves, their households and communities. When that sense of alternative and ahead movement is absent or pissed off, it may end up in malaise, disillusionment and in excessive circumstances, depression.

The well being penalties of long-term financial decline are more and more described as “diseases of despair” – emerging charges of suicide, substance abuse and alcohol-related deaths concentrated in suffering communities. Recessions reliably gasoline mental misery and insist for psychological healthcare, as noticed throughout the eurozone disaster when Greece skilled surging ranges of melancholy and declining self-rated well being, in particular a few of the unemployed – with activity loss, lack of confidence and austerity all contributing to emotional struggling and social fragmentation.

Those traits don’t simply have an effect on the inclined; even those that seem moderately protected incessantly enjoy “anticipatory anxiety” – a continual concern of shedding their foothold and slipping into instability. In communities, each rural and concrete, which can be wrestling with long-term decline, “left-behind” citizens incessantly describe a deep sense of abandonment via governments and society extra usually – prompting requires restoration methods that deal with depression no longer simply as a psychological well being factor, however as a much broader financial and social situation.

The conclusion in alternative and upward mobility – lengthy embodied in US tradition via “the American dream” – has traditionally served as a formidable mental buffer, fostering resilience and function even amid systemic boundaries. On the other hand, as inequality widens and whilst profession alternatives for plenty of seem to slender, analysis displays the distance between aspiration and truth may end up in disillusionment, persistent tension and higher mental misery – in particular amongst marginalised teams. Those emotions are simplest intensified within the age of social media, the place consistent publicity to curated good fortune tales fuels social comparability and deepens the sense of falling at the back of.

For more youthful other folks in the United Kingdom and plenty of portions of Europe, the truth that such a lot capital is tied up in housing manner alternative relies much less on effort or benefit and extra on whether or not their folks personal belongings – that means they may move a few of its price all the way down to their kids.

‘Deaths of Despair and the Future of Capitalism’, a dialogue hosted via LSE On-line.

Stagnation additionally manifests in additional refined however no much less harmful tactics. Take infrastructure. In many nations, the actual price of flatlining development has been absorbed no longer thru dramatic cave in however quiet decay.

Throughout the United Kingdom, greater than 1.5 million kids are finding out in crumbling faculty structures, with some pressured into makeshift study rooms for years after being evacuated because of protection considerations. In healthcare, the full NHS restore backlog has reached £13.8 billion, resulting in masses of crucial incidents – from leaking roofs to collapsing ceilings – and the lack of necessary medical time.

In the meantime, overlooked govt structures around the nation are affecting the entirety from jail protection to court get right of entry to, with hundreds of circumstances disrupted because of structural disasters and hearth protection dangers. Those aren’t headlines however lived realities – the hidden toll of underinvestment, quietly hollowing out the state at the back of a veneer of capability.

With out financial development, governments face a stark catch 22 situation: to boost revenues thru upper taxes, or make additional rounds of spending cuts. Both trail has deep social and political implications – particularly for inequality. The query turns into no longer simply the way to steadiness the books however how to take action quite – and whether or not the general public may give a boost to a post-growth time table framed explicitly round lowering inequality, even though it additionally manner paying extra taxes.

If truth be told, public attitudes recommend there may be already in style give a boost to for lowering inequality. Consistent with the Equality Believe, 76% of UK adults agree that giant wealth gaps give some other folks an excessive amount of political energy.

Analysis via the Sutton Believe unearths more youthful other folks particularly attuned to those disparities: simplest 21% of 18 to 24-year-olds imagine everybody has the similar likelihood to prevail and 57% say it’s tougher for his or her technology to get forward. Maximum imagine that coming from a rich circle of relatives (75%) and understanding the appropriate other folks (84%) are key to getting on in existence.

In a post-growth international, upper taxes would no longer simplest imply wealthier folks and firms contributing a moderately higher proportion, however the wider public transferring intake patterns, spending much less on personal items and extra jointly in the course of the state. However the fresh instance of France displays how difficult this tightope is to stroll.

In September 2024, its former top minister, Michel Barnier, signalled plans for centered tax will increase at the rich, arguing those had been crucial to stabilise the rustic’s strained public budget. Whilst politically delicate, his proposals for tax will increase on rich folks and big companies first of all handed with out in style public unrest or protests.

On the other hand, his broader austerity bundle – encompassing €40 billion (£34.5 billion) in spending cuts along €20 billion in tax hikes – drew vocal opposition from each left‑wing lawmakers and the a ways appropriate, and contributed to parliament toppling his minority govt in December 2024.

In the United Kingdom, the power on govt budget (heightened each via Brexit and COVID) has noticed a mixture of “stealth” tax rises – particularly, the continuing freeze on revenue tax thresholds, which quietly drags extra earners into upper tax bands – and extra visual will increase, equivalent to the upward push in employer Nationwide Insurance coverage contributions. On the similar time, the United Kingdom govt moved to chop advantages in its spring observation, growing monetary power on lower-income families.

Such measures for sure mark the early indicators of a deeper monetary reckoning that post-growth realities will pressure into the open: the way to maintain public services and products when conventional assumptions about financial growth can not be relied upon.

For the standard events, the political warmth is on. Areas maximum left at the back of via structural financial shifts are more and more attracted to populist and anti-establishment actions. Electoral results have proven a vital shift, with far-right events equivalent to France’s Nationwide Rally and Germany’s Selection for Germany (AfD) making considerable positive factors within the 2024 Ecu parliament elections, reflecting a broader development of emerging give a boost to for populist and anti-establishment events around the continent.

A 'ban AfD' placard is held up during a large protest.

An indication in Berlin requires a ban on Germany’s AfD occasion, Would possibly 2025.
Filip Singer/EPA-EFE

Citizens are expressing rising dissatisfaction no longer simplest with the financial system, however democracy itself. This sentiment has manifested thru declining agree with in political establishments, as evidenced via a Forsa survey in Germany the place simplest 16% of respondents expressed self assurance of their govt and 54% indicated they didn’t agree with any occasion to unravel the rustic’s issues.

This brings us to the central catch 22 situation: can any Ecu baby-kisser effectively lead a countrywide dialog which admits the industrial assumptions of the previous not dangle? Or is making an attempt such honesty in politics inevitably a trail to self-destruction, regardless of how urgently the dialog is wanted?

Going through as much as a brand new financial truth

For far of the postwar technology, financial existence in complex democracies has rested on a collection of acquainted expectancies: that arduous paintings would translate into emerging earning, that house possession can be extensively potential and that each and every technology would surpass the prosperity of the only sooner than it.

On the other hand, a rising frame of proof suggests those pillars of monetary existence are eroding. More youthful generations are already suffering to check their folks’ income, with decrease charges of house possession and larger monetary precarity turning into the norm in lots of portions of Europe.

Earning for millennials and technology Z have in large part stagnated relative to earlier cohorts, whilst their residing prices – in particular for housing, training and healthcare – have risen sharply. Charges of intergenerational revenue mobility have slowed considerably throughout a lot of Europe and North The united states because the Seventies. Many younger other folks now face the possibility no longer simply of static residing requirements, however of downward mobility.

Successfully speaking the realities of a post-growth financial system – together with the want to account for long term generations’ rising sense of alienation and declining religion in democracy – calls for extra than simply sound coverage. It calls for a major political effort to reframe expectancies and rebuild agree with.

Historical past displays that is now and again imaginable. When the Nationwide Well being Carrier used to be based in 1948, the United Kingdom govt confronted fierce resistance from portions of the clinical career and considerations a few of the public about price and state keep an eye on. But Clement Clement Richard Attlee’s Labour govt endured, linking the advent of the NHS to the shared sacrifices of the warfare and a compelling ethical imaginative and prescient of common care.

Whilst taxes did upward push to fund the carrier, the promise of a fairer, fitter society helped protected enduring public give a boost to – however admittedly, within the wake of the huge surprise to the device that used to be the second one international warfare.

In 1946, High Minister Clement Clement Richard Attlee requested the United Kingdom public to lend a hand ‘renew Britain’. Video: British Pathé.

Mental analysis gives additional perception into how such messages can also be won. Individuals are extra receptive to switch when it’s framed no longer as loss however as contribution – to equity, to group, to shared resilience. This underlines why the instant postwar duration used to be one of these politically fruitful time to release the NHS. The COVID pandemic in short introduced a way of unifying function and the danger to reconsider the established order – however that window briefly closed, leaving many of the outdated buildings intact and in large part unquestioned.

A society’s skill to flourish with out significant nationwide development – and its voters’ capability to stay content material and even hopeful within the absence of monetary growth – in the end will depend on whether or not any political occasion can credibly redefine good fortune with out depending on guarantees of ever-increasing wealth and prosperity. And as a substitute, be offering a believable narrative about tactics to fulfill our very human wishes for private construction and social enrichment on this new financial truth.

The problem can be no longer simplest to seek out new financial fashions, however to construct new resources of collective that means. This second calls for no longer simply financial adaptation however a political and cultural reckoning.

If the speculation of creating this new consensus turns out overly positive, research of the “spiral of silence” recommend that folks incessantly underestimate how extensively their perspectives are shared. A up to date record on local weather motion discovered that whilst the general public supported more potent inexperienced insurance policies, they wrongly assumed they had been within the minority. Making shared values visual – and naming them – can also be key to unlocking political momentum.

To this point, no mainstream Ecu occasion has dared articulate a imaginative and prescient of prosperity that doesn’t depend on reviving development. However with democratic agree with eroding, authoritarian populism on the upward push and the local weather disaster accelerating, now is also the instant to start out that long-overdue dialog – if someone is keen to pay attention.

Welcome to Europe’s first ‘post-growth’ country

I’m imagining a Ecu nation in a decade’s time. One who not positions itself as a world tech powerhouse or monetary centre, however the first primary nation to claim itself a “post-growth nation”.

This shift didn’t come from idealism or ecological fervour, however from the onerous truth that when years of monetary stagnation, demographic trade and mounting environmental tension, the pursuit of monetary development not introduced a reputable trail ahead.

What adopted wasn’t a revolution, however a reckoning – a reaction to political chaos, collapsing public services and products and widening inequality that sparked a large coalition of more youthful citizens, local weather activists, disenchanted centrists and exhausted frontline staff to rally round a brand new, pragmatic imaginative and prescient for the long run.

On the middle of this motion used to be a shift in language and priorities, as the federal government moved clear of guarantees of unending financial growth and as a substitute dedicated to wellbeing, resilience and equality – aligning itself with a rising global dialog about shifting past GDP, already gaining traction in Ecu coverage circles and projects such because the EU-funded “post-growth deal”.

However this modification used to be additionally the results of years of political float and public disillusionment, in the end catalysed via electoral reform that broke the two-party dangle and enabled a brand new alliance, formed via grassroots organisers, coverage innovators and a technology in a position to reimagine what nationwide good fortune may just imply.

Taxes had been upper, in particular on land, wealth and carbon. However in go back, public services and products had been remodeled. Healthcare, training, delivery, broadband and effort had been assured as common rights, no longer privatised commodities. Paintings modified: the usual week used to be shortened to 30 hours and the state incentivised jobs in care, training, repairs and ecological recovery. Other people had much less disposable revenue – however fewer prices, too.

Intake patterns shifted. Hyper-consumption declined. Restore retail outlets and sharing platforms flourished. The housing marketplace used to be restructured round long-term safety slightly than speculative returns. A big-scale public housing programme changed buy-to-let funding because the dominant type. Wealth inequality narrowed and towns started to densify as automobile use fell and public area used to be reclaimed.

For the more youthful technology, post-growth existence used to be much less about mountaineering the revenue ladder and extra about balance, time and relationships. For older generations, there have been promises: pensions remained, care techniques had been rebuilt and housing protections had been bolstered. A brand new sense of intergenerational reciprocity emerged – no longer completely, however extra visibly than sooner than.

Politically, the transition had its dangers. There used to be backlash – one of the vital rich left. However many stayed. And over the years, the narrative shifted. This Ecu nation started to be noticed no longer as a laggard however as a laboratory for Twenty first-century governance – a spot the place ecological realism and social harmony formed coverage, no longer simply quarterly objectives.

The transition used to be asymmetric and no longer with out ache. Jobs had been misplaced in sectors not thought to be sustainable. Provide chains had been restructured. World competitiveness suffered in some spaces. However the political narrative – sparsely crafted and extensively debated – made the case that resilience and fairness had been extra vital than brief development.

Whilst some nations mocked it, others quietly started to review it. Some towns – particularly within the Nordics, Iberia and Benelux – adopted swimsuit, drawing from the rising frame of study on post-growth city making plans and non-GDP-based prosperity metrics.

This used to be no longer a retreat from ambition however a redefinition of it. The shift used to be rooted in a rising frame of educational and coverage paintings arguing {that a} deliberate, democratic transition clear of growth-centric fashions isn’t just appropriate with social development however crucial to combating environmental and societal cave in.

The rustic’s post-growth transition helped it sidestep deeper political fragmentation via changing austerity with heavy funding in group resilience, care infrastructure and participatory democracy – from native budgeting to citizen-led making plans. A brand new civic tradition took root: slower and extra deliberative however much less polarised, as politics shifted from summary guarantees of development to open debates about real-world trade-offs.

The world over, the rustic traded some geopolitical energy for ethical authority, focusing much less on financial festival and extra on international cooperation round local weather, tax justice and virtual governance – incomes new relevance amongst smaller international locations pursuing their very own post-growth paths.

So is that this all only a social and financial delusion? Arguably, the actual delusion is believing that nations in Europe – and the events that compete to run them – can proceed with their present insistence on “growth at all costs” (whether they if truth be told imagine it).

The other – embracing a post-growth truth – would provide the sector one thing we haven’t noticed in a very long time: honesty in politics, a dedication to lowering inequality and a trust {that a} fairer, extra sustainable long term remains to be imaginable. Now not as it used to be simple, however as it used to be the best choice left.

Welcome to post-growth Europe – can someone settle for this new political truth?

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