From discovering its place within the world world order to wrangling enterprise competitiveness, Europe is going through a rising spate of challenges it’s struggling to tackle, political and enterprise leaders informed CNBC on the sidelines of the Ambrosetti Forum. “In a way, I see a Europe suffering from cholesterol,” Arancha González Laya, the dean on the Sciences Po University and former Spanish overseas affairs minister, informed CNBC on Saturday. “The problems accumulate. None of these problems break your health today, but the problems accumulate, and one day you will discover that you have a heart attack,” he added. Others struck a equally tone, with political advisor and former German State Secretary Markus Kerber describing Europe as “a bit like the rabbit in the headlight” — and saying the continent was struggling with the breakdown of the long-standing world rules-based system and order. “Europe does not know how to respond to that, because the rules-based world gave Europe all the advantages you wanted: low defense spending, high consumer confidence and nothing to worry about. So, you could almost fly the political and the economical system on an autopilot. But this is gone,” he mentioned. Instead, Kerber flagged, “Europe has been waking up in what some political scholars have called the pentarchy. I mean a world that is more or less governed and influenced by the United States of America, the People’s Republic of China, India, EU and Russia.” Europe, he added, was not nicely outfitted to handle the multilateral threats and alternatives at play. Lack of competitiveness One of the primary costs towards the continent is that it has failed to enact reforms so as to increase its financial competitiveness vis-à-vis commerce rivals within the U.S. and Asia. But the area’s defenders say U.S. President Donald Trump’s commerce battle and tariffs, in addition to the battle in Ukraine, have left much less time for inward-looking motion to increase the continent’s attractiveness as a spot to make investments and do enterprise. Europe is aware of it has an issue: in 2024, experiences on competitiveness and the one market, compiled by former Italian Prime Ministers Mario Draghi and Enrico Letta detailed the challenges going through the continent — from sluggish progress and regulatory burdens that hinder innovation, to larger power prices and a fragmented single market. These components had been making Europe fall behind the U.S. on quite a lot of totally different metrics, with the Draghi report highlighting {that a} “wide gap” in GDP has opened up between the EU and its historic transatlantic ally, pushed primarily by a extra pronounced slowdown in productiveness progress in Europe. “Europe’s households have paid the price in foregone living standards. On a per capita basis, real disposable income has grown almost twice as much in the U.S. as in the EU since 2000,” the report famous. International Monetary Fund information additionally displays the sluggish decline of the EU’s financial output. Measured when it comes to buying energy parity (used to evaluate the financial well-being, residing requirements, and manufacturing volumes of nations by adjusting for variations in worth ranges), the EU’s share of world GDP has fallen from 27.5% in 1980 to 14.1% in 2025. EU Commissioner for Economy and Productivity Valdis Dombrovskis mentioned efforts to tackle declining progress and competitiveness had been underway, nevertheless. “One of the first initiatives of European Commission in this mandate was to set out what we call a ‘Competitiveness Compass,’ and, actually, it builds heavily on [the] Draghi and Letta reports, and our Competitiveness Agenda, which we are implementing right now,” Dombrovskis informed CNBC at Ambrosetti. “There are elements you see exactly in the Draghi and Letta reports, including closing the innovation gap, including using the full potential of EU single market, including reduction of bureaucracy and simplification, all this is now firmly in the EU agenda and being implemented,” he added. But Carlos Cuerpo, Spain’s minister of Economy, Trade and Business, informed CNBC that Europe wanted to cease procrastinating when it comes to reforms to increase competitiveness. “We know what the big road map is. We know all the [competitiveness] recommendations from [Mario] Draghi, from [Enrico] Letta and we can agree on most of them … but then we need to avoid this sense of frustration of not being able to actually push through all those recommendations in Europe,” Cuerpo informed CNBC’s Steve Sedgwick. “There is an element that needs to be more optimistic about what we can do and avoid these pessimistic narratives about Europe,” he famous. Competitiveness is a medium-term effort, Cuerpo mentioned, “that needs to be instilled into our day to day, into our short-run actions, and that’s the most difficult part of it … We need to be moving on competitiveness.”