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This article has been automatically translated from Dutch. Click here to see the orginal article including all links to sources.
While US stock markets continue to break new records and companies like Nvidia soar to unprecedented heights, Europe is grappling with economic stagnation and an exodus of industry. This week, Jamie Dimon issued a blunt warning to Europe: “You are losing.” How much longer until European leaders realize that deep reforms are urgently needed?
Despite rising trade tensions, US stock markets reached new record highs this week. Both the S&P 500 and the Nasdaq set fresh all-time highs. The broad S&P 500 index closed at 6,280.46 points, while the tech-heavy Nasdaq ended at 20,630.67. Markets seem increasingly immune to the uncertainties surrounding import tariffs and the ongoing trade war.
S&P 500 hits a new high (source: Yahoo Finance)
The S&P 500 has now fully recovered from the correction earlier this year—at least when measured in dollars. In this week’s monthly update, we noted that for euro investors, the index is still in negative territory due to the weaker dollar. A strong euro is not seen as beneficial by everyone. While it lowers import prices and curbs inflation, it also hampers exports. This is why European central bankers are likely to act to prevent the euro from rising too much against the US dollar.
Nvidia breaks record (source: Holger Zschaepitz)
Alongside these market records, another milestone was reached: Nvidia became the first company in the world to surpass $4 trillion in market capitalization. Since early May, shares of the chipmaker have surged over 40%. Nvidia’s market cap is now roughly $1 trillion larger than that of the entire German stock market.
Market capitalization of Nvidia vs. Germany (source: Lisa Abramowicz)
According to the Financial Times, Nvidia is the biggest winner of the AI-driven tech boom—one that they claim surpasses even the peak of the dotcom era. Since the launch of ChatGPT at the end of 2022, Nvidia has greatly benefited from the soaring demand for AI hardware and chips. The company is firmly positioned as the market leader in graphics processing units (GPUs).
World’s largest companies by market cap (source: companiesmarketcap)
The top ranks of the world’s most valuable companies are dominated by American tech giants. The highest-ranked European firm is German software company SAP, at number 26, with a market cap of $357 billion. Unsurprisingly, the most valuable Dutch company is ASML, which ranks 31st with a market cap of $315 billion.
Jamie Dimon, CEO of America’s largest bank and one of the most influential voices in global finance, delivered a harsh message to Europe this week. Speaking at an international conference in Dublin hosted by the Irish Ministry of Foreign Affairs, he warned about Europe’s declining competitiveness. “You are losing,” he said plainly to the attending European leaders.
Jamie Dimon (source: Fortune Global Forum)
In the past 10 to 15 years, Europe’s GDP has fallen from 90% of the US’s to just 65%. “That is not a good trend,” said Dimon. He sees the continent continuing to weaken and falling behind both the United States and China. “We have a tremendously strong market, and our companies are large, successful, and global in scale. You have that too—but less and less.”
Back in 1980, Europe accounted for 29% of global wealth, while the US held 26%. Today, the US still holds 26%, but Europe has dropped by over 10 percentage points, to just 18%.
This isn’t the first time Dimon has raised the alarm. At JPMorgan’s annual shareholders meeting in April, he said that “Europe has serious problems to solve” and needs deep structural reforms in order to resume meaningful growth.
So far, there’s little sign that European politicians grasp how deep these reforms need to be to restore competitiveness. The continuing wave of chemical plant closures in the Netherlands is a clear example. Back in March, we reported on the closure of facilities by LyondellBasell and Tronox. In June, US-based Westlake also announced a shutdown. This week, two more companies joined the growing list.
A PVC plant in Limburg is ceasing production in the Netherlands after half a century. Meanwhile, oil trader Gunvor announced Tuesday that it will close its oil terminal in the port of Rotterdam due to the uncertain Dutch investment climate. This follows the earlier decision by the Swiss company to shut down its Rotterdam refinery. On top of the EU-wide CO₂ tax, the Netherlands has imposed an additional national levy, making production there less competitive.
According to De Telegraaf, foreign investors perceive the Dutch policy as erratic and confusing. Thousands of jobs have already been lost, and investment is shifting abroad. Germany and France are reportedly working to relax regulations to retain industry, while the Netherlands continues to make things more expensive and complex.
Climate and Green Growth Minister Hermans (VVD) wants to maintain the additional CO₂ tax for now, despite the problems it is causing. She points to risks of scrapping it, such as delays in sustainability goals and losing access to EU subsidies. While closing factories might make it easier to meet national CO₂ targets, it leads to economic decline—and the emissions saved locally will likely just be emitted elsewhere.
Across the EU, chemical plant closures remain an issue, even as the bloc aims to reduce dependence on foreign suppliers. The European Commission has now proposed an action plan to support the chemical sector. European industry is finding it increasingly difficult to stay competitive, largely due to EU climate policy, high energy costs, and carbon taxes.
The EU now wants to support production facilities that manufacture critical raw materials for sectors like aerospace, defense, and healthcare. The plan would allow member states to compensate companies for indirect costs related to CO₂ emission permits. There are also proposals to ease certain regulations—but so far, these seem limited to issues like advertising, packaging, and reporting frequency. There are no signs yet of deeper measures, such as permanently lower energy costs or tax relief.
One could ask whether it would be wiser to roll back earlier (climate) measures entirely, rather than trying to rescue companies from the consequences of those same policies with more new measures. Perhaps this is what Dimon means by “deep reform”—but so far, European politics appears unwilling to go that far.
