The $1.7 trillion chasm: The real story of how the EU has lost the growth race
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In the last five years the EU’s fall against the US has become a rout
Montage © Stand for Our Sovereignty 2026
Shocking new figures show that ‘Ever Closer Union’ doesn’t work
Exclusive: This report shows how the EU’s economy has fallen off a cliff compared to its major rival, the United States. Using the latest international data just released by the IMF, this summary reveals the shocking $1.7 trillion gap that has opened up between the US and the EU.
Two ‘at-a-glance’ charts demonstrate that for decades the EU led the US in the size of its economy in real purchasing parity terms, excluding the effects of inflation. For 30 years the EU consistently had the larger economy by some margin.
However the Stand for Our Sovereignty (SOS) team with colleagues from The think-thank Facts4EU and The Campaign for an Independent Britain (CIBUK.Org), show that during the 2008 financial crisis this began changing, and post-2022 the EU really started plummeting, weighed down by regulatory overreach. This report has been shared exclusively with GB News.
How a massive economic engine that once beat the US was structurally derailed
The data in the chart below comes from the official IMF ‘World Economic Database’, October 2026.
The United States has steadily pulled ahead of the EU due to its high-growth tech industry and superior productivity gains, while the EU has settled into a heavily regulated, lower-growth decline and fall. This has now become an extraordinary and continuing plunge.
These figures can’t be massaged away
Data explainer: When the US Dollar strengthens – as it has dramatically done against the Euro and Pound since 2008 – an economy can appear to be shrinking in dollar terms even if it is actually growing domestically. To strip this distortion out, we use the IMF’s Purchasing Power Parity (PPP) figures, combined with its Chained Volume Measures (CVM).
- PPP: Instead of converting currencies via volatile FX markets, PPP uses a standardised basket of goods to evaluate what money actually buys locally, eliminating exchange rate spikes
- CVM: Chained Volume Measures fix the prices to a baseline year (constant prices) and chain the growth increments annually, thereby stripping out domestic inflation
- The above are the official figures from the IMF and this is their standard dataset, Oct 2026.
How “the mighty EU” has fallen
In 2008, the total size of the EU economy, using Purchasing Power Parity, actually exceeded that of the US by $834 billion. By 2026 this had all changed. The rigid constraints of the Single Market have allowed the US to open up a commanding lead in purchasing power, projected by the IMF at an astonishing $1.7 TRILLION this year.
The root cause of this persistent divergence is structural rather than accidental. A single currency, operating without a true fiscal union, has created a built-in straitjacket, restricting countries from acting as they might wish.
Lacking the ability to adjust exchange rates, mature EU economies are repeatedly driven toward internal wage devaluation and spending constraints to maintain fiscal discipline. This emphasis on austerity suppresses local demand and reduces long-term corporate investment, which has led to the fall that can be seen above.
Failure to tackle public spending has also resulted in massive increases in borrowing costs,
which we have warned about.
President Macron and Andy Burnham are now finding this out to their cost.
How the EU’s decline and fall evolved – by phases
The 1980–2008 era (EU larger than the US): For nearly 30 years, it was the EU that possessed the larger real economy, before being weighed down by its ever-extending structural tentacles and interference.
The 2008–2019 era (the “Euro trap”): Both the post-financial crisis handling and the rigid architecture of the Euro began to cause permanent stagnation, allowing the US permanently to seize the lead in 2013.
The post-2022 plummet (the current “falling off a cliff”): Our chart shows the acceleration in the EU’s downfall has become extreme, due to a combination of the 2022 Ukraine energy shock and the US tech boom. Taken together, what was a slow divergence has very quickly turned into an economic rout.
Rt Hon Lord Redwood D.Phil FCSI, former Single Market Minister and former Secretary of State
commented exclusively to GB News, Stand for Our Sovereignty and Facts4EU
“The UK’s growth all the time we were in the EEC/EU was around just half the level the economy achieved in the 20 years before joining. The growth slowed more the longer we stayed in, and the more laws and taxes the EU imposed.
“Now Mr Draghi in his excoriating report has said the EU has fallen further and further behind in recent years owing to excessive regulation.
“The EU has burdened its member states with dear energy, with carbon taxes and emissions charges, and extensive regulation of every industry and every farm.
“The EU code-based law is far less flexible than the Anglo-Saxon common law, with entrepreneurs and businesses impeded from innovating and getting costs down. It is no wonder the EU has grown so slowly.”
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Annual real GDP growth rates – the EU vs the US
Another way of comparing the US with the EU is simply by comparing the average annual growth rates of the two economies, in real terms (i.e. excluding inflation). On average the US has been growing over 60% faster than the EU over the past two decades.
Over nearly 20 years, the US has grown 60% faster than the EU
Since the financial crisis of 2008 – 18 years ago – the US has forged ahead of the EU.
Just as the UK under the Conservative government did a trade deal with the 11 countries of the CPTPP (the ‘Trans-Pacific Partnership’) whose economies are growing fast, it seems more logical for Andy Burnham to ‘get closer’ to the faster-growing US, than the sluggish, falling-behind EU.
The US is by far our single biggest export market
The Rt Hon the Lord Redwood D.Phil FCSI gave us his final comments
“The EU has not produced any of the great fast-growing companies of the digital revolution.
“All the trillion-dollar companies listed on world stock exchanges are US, and are digital. Europe’s largest companies are much older, smaller, more traditional businesses. The EU has chosen to watch from the sidelines as digital explodes.
“The EU is becoming a digital colony of the US dependant on US chips, software, social media, intelligent search, computers, mobiles, and now AI.
“As Microsoft, Apple, Amazon, Nvidia, Alphabet, Meta and the other digital giants win millions of European customers, sign them up to services, and scoop up billions of dollars in revenues, the EU sets out to regulate and tax digital a bit more.
“When will the EU wake to seeing their over-regulation, their legal system, their excessive government intervention, their high taxes and dear energy all conspire to keep them in the slow lane?”
Observations
There can be no doubt that the figures revealed above represent a devastating indictment of the Brussels ‘elite’ and their ideological and authoritarian policies. This is the first time to our knowledge that this information has been presented to the public – and we suspect that many MPs will also be surprised by what we have revealed.
Make no mistake, these figures and the charts that accompany them are all based on the most accurate picture we can present and are based on official data from the IMF, which used to be known as the lender of last resort”. The EU’s decline and fall is dramatic. The simple fact is that despite its other problems, the US is roaring ahead economically.
Until the EU hierarchy ditches its plans to take over all of Europe, its protectionist policies, and it’s ‘precautionary principle’ in relation to all innovation, we can only see this dramatic plunge continuing.
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Please support our work
If more patriotic members of the public donate, we will keep going.
Please donate today to our research partner, Facts4eu, if you would like to continue reading us tomorrow, next week, and the weeks after.