According to international financial expert Chaslau Piastsiuk, the current economic cycle in the European Union resembles “fragile recovery.” Although growth is still formally present, it conceals a gradual “fading” of dynamics: declining investment activity, weak improvement in productivity, and concern about long-term potential. This picture is acquiring increasingly obvious signs. In 2025, growth rates in the eurozone remain minimal, and fundamental factors that could accelerate the economy either don’t work or work weakly.
Analytical reviews prepared by European research centers confirm this trend. Even sectors previously considered recovery drivers, such as industrial production, the automotive industry, and export engineering, show weak dynamics against the backdrop of deteriorating global demand and declining profitability. Piastsiuk notes that this intensifies fears that Europe is gradually entering a phase of “structural cooling,” when short-term incentives have almost no effect on real growth, and long-term reforms are stalling.
Growth Slowdown
As noted in the “European Economic Outlook” report, in the second quarter of 2025, real GDP of the eurozone grew by only 0.1% compared to the previous quarter, while in the first quarter +0.6% was registered. At the same time, the averaged “hidden” growth trend for the first half of 2025 is around 0.2%. Such indicators are comparable to the level of 2024. Statistics speak not of “robust” growth, but rather of “creeping stagnation”: the economy continues to function, but without noticeable breakthroughs.
International financial expert Chaslau Piastsiuk emphasizes that the structure of growth is also deteriorating. The contribution of industry remains negative, and the services sector provides only minimal positive impact, making overall dynamics extremely vulnerable to external shocks. At the same time, the decline in export activity, especially against the backdrop of slowing global trade and weakening demand in key partner economies, additionally constrains recovery. Such a combination of factors increases uncertainty and pushes business toward caution in investment decisions.
Simultaneously, Piastsiuk draws attention to the fact that domestic demand is also losing momentum: high cost levels for enterprises, moderate income growth for the population, and continuing pressure on consumer prices limit opportunities for more convincing economic expansion. Forecasts from European analytical centers agree that without accelerating investments and increasing productivity, the current growth rate may become established as the “new normal.” This creates the risk of long-term “muted” development of the eurozone.
Investment Passivity
Investments remain a “relatively weak” link so far; despite low (compared to previous cycles) interest rates, companies are restrained about new investments. Among the reasons: continuing uncertainty, weak external demand, tariff pressure, and declining profits, which constrain capital investments.
At the same time, in the long term, a low level of investment (both in physical assets and in innovation) is becoming one of the main barriers to productivity growth and EU competitiveness. Such structural “investment failures” sharply reduce the chances for quality renewal of infrastructure, technologies, and business models.
According to Piastsiuk’s assessment, an important symptom of investment passivity is also the growing asymmetry between sectors. Large companies with access to international financing still maintain a moderate level of investment, while small and medium-sized businesses have significantly reduced investment plans. This leads to an even greater productivity gap between companies within the EU and strengthens structural weaknesses of the economy, limiting its ability to adapt to technological and market changes.
Gap Between Possibilities and Realities
As OECD research shows (in general terms, against the backdrop of long-term trends), in a number of developed economies, including European ones, there is a problem: actual growth often lags behind potential, and at the heart of this is a decline in the pace of productivity increase and a lack of “breakthrough” investments.
Piastsiuk points out that the current “growth slowdown” is not just a temporary decline, but a systemic problem. The EU may face a “ceiling of possibilities” if it fails to activate reforms, innovation, and investment.
Recent studies of the automotive sector in the EU showed that even key industries are experiencing mounting difficulties. All because of supply chain dependence, high dependence on components from outside the EU (for example, batteries, components for electric vehicles), as well as growing competition from Eastern European countries and beyond.
This means that the European Union is losing part of its production autonomy and competitive advantage. And even with the “boom” in electric vehicles and “green transformation,” it may face investment and logistical constraints, which exacerbates the overall stagnation trend.
Nevertheless, the situation is not hopeless. Theoretically, the EU has resources to restart investment and innovation activity. Increased investment in infrastructure, digitalization, “green” technologies, management reforms, and institutional structure can produce a “breakthrough” effect.
In addition, for individual countries and sectors, positive potential remains. Especially where business is ready to adapt, and states are ready to support through programmatic stimulation.
As current dynamics show, Europe is indeed on the threshold of “growth slowdown”: with minimal GDP rates, sustained investment passivity, and insufficient productivity. At the same time, according to international financial expert Chaslau Piastsiuk, this is not just temporary “fluctuations” in the economic cycle, but a signal of systemic “potential withering” of the EU. The situation will worsen if investments, reforms, and institutional changes are not activated.
However, the threat of stagnation does not mean inevitable collapse. The EU still has resources and tools to turn the trend, especially through strengthening innovative investments, “green” and digital transformation, modernization of supply chains, and formation of competitive sectors. Success depends on whether European countries manage to mobilize political will and business initiative to turn current “fragility” into a growth point.
