Wealthy American tourists are anticipated to once again visit Europe in large numbers this summer, indulging in luxurious accommodations at the Paris Olympics or along the Mediterranean, competing for tickets to Taylor Swift concerts, and tipping generously at restaurants. While this influx of big spenders is a boon for the tourism industry, contributing significantly to the European Union’s GDP, it also highlights a growing disparity in financial prosperity among locals.

Although money isn’t the sole measure of well-being, Europe is urged to reflect on its high living standards, which have long been cherished and are a major draw for international tourists. However, sustaining these standards necessitates a concerted effort from policymakers to enhance productivity and uphold prosperity.

For years, Europeans have found solace in the belief that, despite the US boasting higher absolute wealth levels, Europe excels in other aspects of a fulfilling life. Longer paid vacations, lower rates of gun violence, healthier diets, and pedestrian-friendly cities contribute to increased longevity. The average lifespan in the European Union stands at 81.5 years, compared to approximately 77.5 years in the US.

Recently, Europe has grown concerned about a widening gap in economic growth and technological prowess across the Atlantic. Nicolai Tangen, the head of Norway’s sovereign wealth fund, pointed out that Americans exhibit a stronger work ethic, while Europeans tend to be less ambitious and more risk-averse. Peter Wennink, former CEO of ASML Holding NV, warned of Europe’s lagging competitiveness and the need to overcome complacency.

With Europe’s working-age population expected to decline due to demographic trends, addressing these shortcomings becomes crucial to sustain social welfare systems, public pensions, and revitalize the continent’s economy.