Europe – the lost continent? Howard Davies Director, LSE KR Narayanan Memorial Lecture Indian Council of World Affairs 8 April 2010

The European Union: 500 million people – 27 countries Source: Eurostat. EU population, million people, 1986 – 2010

The Euro: A single currency for Europeans Source: EU countries using the euro EU countries not using the euro

How rich is the EU compared to the US, China and India? Source: IMF World Economic Outlook, October GDP per capita, current prices (US dollars), 2008

The EU economy is close in size to that of the US Source: IMF World Economic Outlook, October GDP, current prices (Billion US dollars), 2008 EU (18,387 Billion USD)US (14,441 Billion USD)

Europe’s post-crisis growth rates will be sluggish Source: IMF World Economic Outlook, October Gross domestic product forecast (% change), constant prices,

The World’s Economic Centre of Gravity is moving eastwards Source: Grether JM, Mathys N (2008): Is the World’s Economic Center of Gravity Already in Asia? Projection of the World’s Economic and Geographic Centre of Gravity

EU is losing its share in the global economic governance Source: G8 G20

10-year government-bond spreads over German bunds, percentage points, 2008 Jan – 2010 Jan Costs of borrowing in the Eurozone have been growing apart Source: The Economist.

Unit labour costs in Greece and Spain have been growing more rapidly than in Germany or France Quarterly unit labour cost*, index (2005 = 100.0), 2006 Q4 – 2009 Q3 * Unit labour costs measure the average cost of labour per unit of output and are calculated as the ratio of total labour costs to real output. Source: OECD Data.

“If change is - inevitable - predictable - beneficial - doesn't logic demand that you be a part of it?” (Captain James T. Kirk, Star Trek)

Europe – the lost continent? Howard Davies Director, LSE KR Narayanan Memorial Lecture Indian Council of World Affairs 8 April 2010