With Emmanuel Macron’s official state visit to the US, Angela Merkel’s markedly more low-key trip to fend off a trade war with the EU, and the announcement that Donald Trump will visit the UK in July, relations between North America and the three key Western European powers has featured heavily in the news recently.
One of the most remarkable findings from our 2017 Prosperity Index was that North America had fallen behind Western Europe to become the second most prosperous region in the world, for the first time in the publication’s history. Prosperity in North America declined faster than in any other region in 2017, driven by weakening Social Capital, Personal Freedom and Safety and Security.
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Whilst the US enjoys the best Business Environment in the world, one specific challenge facing it is shrinking Social Capital. Civic engagement has fallen: people are less likely to donate money to charity and they volunteer less frequently – two measures in which they previously led the rest of the world.
And whilst the US has continuously improved economically since 2012, this progress has not resulted in an increase in optimism among citizens and middle-class wage stagnation is a central challenge facing America’s economy, as it is for many Western European countries, which is one reason why all four nations are going through a period of political change.
President Macron’s victory in France, Jeremy Corbyn’s unexpected success in the UK, and Chancellor Merkel’s unforeseen slump in the polls in Germany made 2017 as politically eventful as 2016. And whilst the forces driving these changes in Britain, France, Germany and the US are not the same, there are significant similarities. It will be fascinating to see which region comes top in the 2018 Prosperity Index, later this year.
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