Europe has been worrying about economic decline and techno-stagnation for a quarter of a century. The gnawing angst has finally given way to something closer to panic.

The gathering of the European elites at the Ambrosetti forum – a mini-Davos on Lake Como, on Chatham House rules – was a succession of grim warnings, punctuated by confessions from battle-weary officials that the half-formed structure of the EU makes it almost impossible to solve any of the problems.

Mario Draghi, former president of the European Central Bank, and Ursula von der Leyen, president of the European CommissionCredit: Bloomberg

The eurozone has scarcely grown for seven quarters, and fiscal austerity has yet to begin. Germany has seen no accumulated growth since 2018. The dawning awareness that next year may be just as bad has finished all remaining illusions. So has fear of the “China shock 2.0”, this time larger and rising far up the technological ladder. “If we go on like this, Europe is simply going to die,” said a doyen of the EU illuminati.

“America innovates, China replicates, Europe regulates. It is an extraordinary picture of our situation, because it’s true,” said Italy’s prime minister, Giorgia Meloni.

“In 1990 the EU of 12 states made up 26.5 per cent of world GDP. Today the EU of 27 states makes up 16.1 per cent, while the US is still at 26 per cent. We were a big weight in the world, but that is no longer the case,” she said.

Europe’s next great error is already in the making. The Artificial Intelligence Act came into force in August – a rushed and messy text informed by the EU’s “precautionary principle”. It treats AI as guilty until proven innocent, more of a threat to humans than a gift to be seized. The dense legal document is a feast for lawyers: Europe’s cutting-edge coders are fleeing to friendlier climes.

The techno-literate were in despair at Lake Como. “It’s too late. We’ve already lost this race,” said the head of a European pharma giant.

“I am trying to use AI to turn a dinosaur into a world-class healthcare company but all I hear in every conversation in Europe is about how we must defend ourselves against AI. Europe needs to take a hard look at itself,” he said.

The European Commission thought it could pull off a second coup akin to the GDPR data protection law in 2016, which compelled others to follow – the “Brussels Effect” – and marked the high point of the EU’s ambitions to be the world’s super-regulator. But the EU is a diminished force today and AI cannot be regulated in such a fashion.

This time the world is turning its back on Europe. Meta is not releasing its multimodal Llama 3 AI model for video, audio and images in the EU, and has suspended its AI assistant, saying restrictions on the training of large language models make it unworkable.

Apple Intelligence has suspended the European rollout of its generative AI tools, saying the EU’s Digital Markets Act compromises privacy by forcing them to let third parties into their systems.

The big beasts of US technology certainly need regulating but the question, as........

© The Age