EU Economy Falls Behind US for First Time in Two Decades

The European Union's economy once surpassed that of the United States, but over the past two decades, their economic trajectories have diverged significantly.

In 2008, the EU's gross domestic product (GDP) was $19.3 trillion, representing 131% of the U.S. economy's $14.8 trillion GDP at the time.

The global financial crisis and Great Recession had a devastating impact on the EU, leading to severe challenges for several member-state governments as they struggled to service their debts or rein in large structural deficits.

A combination of multilateral bailouts and austerity measures helped the EU weather the crisis, but the bloc's aggregate GDP contracted, and the U.S. economy surpassed it in 2015.

The Brexit process, which culminated in the UK's formal withdrawal from the EU in January 2020, dealt another significant blow to the EU's economy.

Since the pandemic, the U.S. and European Union have followed very different trajectories, with the U.S. economy rebounding strongly and forecast to reach $32.4 trillion in 2026, while the EU's GDP is expected to reach $23 trillion, leaving it at just 71% the size of the U.S. economy.