The 2020s are arguably one of the worst decades for Europe in modern history. It began with the pandemic lockdowns which contracted GDP by -6.1% across the EU, the biggest drawdown since the 1930s. This was followed by the Ukraine War which began the ongoing energy crisis. The
Why now
Thesis: Europe's AI lag and shocks weaken growth versus US, China
Catalyst to watch: Further energy shocks or AI policy response
Main risk: Persistent underperformance in European equities
Why it matters
Europe's lag in AI and repeated shocks weaken its long-run growth and equity earnings power relative to US and China.
Details
The 2020s are arguably one of the worst decades for Europe in modern history. It began with the pandemic lockdowns which contracted GDP by -6.1% across the EU, the biggest drawdown since the 1930s. This was followed by the Ukraine War which began the ongoing energy crisis. Then, the AI Revolution began in 2022, in which Europe has fallen significantly behind the US and China. Between 2020 and 2025, the US deployed roughly ~$500 billion of venture capital into AI compared to just ~$50 billion in Europe. Europe was then hit by the highest tariffs in US history, impacting $600+ billion of annual European exports to the US. Now, the Iran War has pushed Europe into its worst energy crisis ever, with central banks being forced to raise interest rates. The 2020s will be remembered as one of Europe's most disruptive decades in history.
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- x · 2026-09-18 16:31 UTC