War, peace, democracy in Europe - Part 2

The first part of this series compared the costs of the ongoing Russia-Ukraine conflict for both countries and how the US is trying to put pressure on both of them to end the hostilities.

- By Sreedev Krishnakumar and Roshan Kishore

Irrespective of how the conflict ends, the rest of Europe faces difficult policy choices which are linked but not confined to the fate of Russia and Ukraine. Here are four charts which describe this situation.

Europe is faced with a low growth and growing debt environment

When compared with the US, the compound annual growth rate (CAGR) of real GDP of major European economies since the Covid-19 pandemic is much lower. In fact, even when nominal numbers are taken, the European Union, since the Covid-19 pandemic, saw a CAGR of 6.4% according to IMF. This is lower than the 7.5% nominal growth recorded by the US during the same period. EU's debt-GDP ratio, on the other hand, has been rising consistently over time and it is unlikely to come down as far as IMF projections go. To be sure, things are different across major economies in Europe.