Europe’s Submerging Economies

“India may be an emerging economy, but the UK is a submerging economy!” shrieked my friend’s father.

Only a few years ago, my friend G brought his parents to the UK from his native Chennai. His objective was to ensure they had the best medical care money could buy. They could live in an exciting city like London, stay healthy, and live a long life close to family.

A few weeks ago, G sent them back to India because England’s medical service appalled them!

Yes, G’s parents would rather have doctors in India look after them than stare in awe at the wonders of European socialized medicine. (Do mention that the next time your idiot lefty buddies say how excellent Europe’s healthcare is.)

How It Started

G and I graduated from London Business School in 2002. He was immediately offered a role at Goldman Sachs, eventually leading to partnership, pay, and perks.

And my goodness, did he succeed! I regret to report that you may be much richer if G were writing this column.

I met G’s father in Cape Town when G got us tickets to the 2010 World Cup. Ah, the perks of being friends with a Goldman partner!

Germany beat Messi and Argentina at Green Point Stadium (now renamed Cape Town Stadium). But the trip’s highlight was a helicopter ride over the Twelve Apostles to where the Atlantic and Indian Oceans meet.

I also recall a fantastic meal at an Ethiopian restaurant, and I wondered, “What kind of cuisine could the benefactors of the ‘We Are The World’ fundraiser possibly have?”

G’s father was as charming and intelligent as G, and I immensely enjoyed their company. To this day, it’s the only time I’ve been to southern Africa.

I can’t recall if G gave me the idea of importing my parents to Italy, following his example. But I’m sure hearing his intention made an impact.

Part of me laughed when I heard the news of G’s parents’ departure, as my father, philosopher-truck driver John Ring, is having a hell of a time adjusting to Italy.

For a man who constantly railed against government stupidity, the old truck driver sounds more like Lee Iacocca than Ron Paul.

But I didn’t bring my parents here for the healthcare. I got them here to spend time with their grandson, eat the best red meat, and drink the best red wine Gaia’s green earth offers. Oh, and to remove them far from the dreaded Tex-Mex border (not that it’s much of a border).

The Land of Lack

But let’s face it: Europe is in big trouble. It self-strangulates economically through excessive regulation. Resource-wise, European dirt is practically worthless. And with friends like Joke Biden, who needs enemies?

Didn’t you hear?

Thanks to Biden trying to punish Texas for its unabashedly disobedient razor wire laying, the muddleheaded POTUS announced a temporary pause on pending decisions on exports of Liquefied Natural Gas (LNG) to non-FTA [Free Trade Agreement] countries until the Department of Energy can update the underlying analyses for authorizations.


In plain English, President Potatohead used the green lobby to shield himself from looking petty and spiteful in his treatment of Texans… but he really screwed Europe.

Yup, Victoria Nuland finally got her chance to “F*ck the EU.” That’s because Europe has depended on US LNG since “parties unknown” (wink, wink) blew up the Nordstream pipelines. This act of terrorism on civilian infrastructure deprived Europeans of cheap, plentiful Russian pipelined gas in the name of solidarity with Ukraine.

Getting into a brawl over Ukraine was stupid for the US. Backing the US is economic suicide for Europe.

As Henry Kissinger said before he entered Inferno Eternal, “To be an enemy of the US can be dangerous. But to be a friend is fatal.”

Hence, we do not have emerging economies in Europe. As G’s father said, we have “submerging” economies.

Eurotrash is Green

“America innovates. China replicates. Europe regulates.”

It’s not just the US’s fault, but the US has accelerated Europe’s economic seppuku. Instead of talking Europeans off the ledge, the US told them to jump.

Let’s look at a few examples.


Germany, once a global manufacturing powerhouse, has been experiencing a gradual deindustrialization trend in recent years. This decline is attributed to a confluence of factors.

Rising energy costs: Germany’s reliance on fossil fuels, particularly Russian gas, makes it vulnerable to energy price fluctuations. However, that reliance was not harmful as long as the US didn’t antagonize Russia. The war in Ukraine and the subsequent sanctions have led to higher energy costs for businesses.

Competitive pressures: Global manufacturing has become increasingly competitive, with emerging economies like China offering lower labor costs and attractive investment incentives. German companies have faced pressure to relocate production to these lower-cost regions. They’ve also started moving to the US to escape Europe’s insane energy costs and taxes.

Digitization and automation: The rise of automation and technological advancements have transformed many industries, leading to job losses in traditional manufacturing sectors.

Changing consumer preferences: The demand for goods has shifted towards services and experiences, reducing the need for some traditional manufacturing products.

United Kingdom

I’d pull the lever for Brexit a thousand times over again. But I’ll never vote for the Tory morons who are running the UK into the ground.

Globalization: The rise of globalization has made it easier for businesses to source goods from cheaper locations, further putting pressure on UK manufacturers.

Financialization: The UK’s financial sector has grown significantly in recent decades, drawing investment away from manufacturing. The City of London (financial center) is between 8% and 16% of the UK’s economy.

Changing consumer preferences: As in France, the demand for goods has shifted towards services and experiences.


France is an unbelievably productive country when it feels like working, but it hasn’t fared well in modernity.

Global economic shifts: The rise of new manufacturing powerhouses in Asia, particularly China, has pressured French manufacturers to compete on price and quality.

Labor costs: France’s relatively high labor costs compared to other European countries make it less attractive for businesses to invest in manufacturing.

Government policies: Some government policies, such as high taxes and strict regulations, have been seen as hindering the growth of French manufacturing.

Changing consumer preferences: The demand for goods has shifted towards services and experiences, reducing the need for some traditional manufacturing products.

Wrap Up

All three of these countries are also run by green loonies who’ve made it their mission to drive their countries back into the stone age. They’ve attacked their farmers, who’ve literally covered them in merde in return. And they also have large numbers of immigrants who utterly refuse to assimilate.

Like Russia, don’t be surprised if these countries start looking eastward. They won’t get help from anywhere else.

The Daily Reckoning