An candid conversation on Europe’s challenges with Hugo Bezombes

Where I interview Hugo, creator of the YouTube channel Into Europe on the EU's innovation, demographic, and policy challenges, and what the potential solutions could be.

The following is an edited transcript of an interview I did recently with the YouTuber and content creator Hugo Bezombes, who runs the excellent YouTube channel Into Europe.

My recent essay on “Why Europe Doesn’t Innovate” was partly inspired by one of Hugo’s videos on a similar topic, and his content is consistently high quality, nuanced and very well-researched while remaining accessible to a broader audience. I highly recommend you check out his videos and subscribe to his channel.

Why Europe Fell Behind the United States

In the following interview, we discuss Europe’s relative stagnation vis-a-vis the US, the challenges in maintaining its global competitiveness and the economic and cultural causes; Hugo highlights key issues like an aging population, risk-averse cultural norms, and a lack of institutional incentives for innovation, compared with the US, which benefits from its reserve currency and ability to attract top talent. We address the biggest misconceptions about European economic growth and culture, the mixed role that immigration has played and the long-term challenges associated with it. Hugo concludes by offering his thoughts on whether the EU should become a federation and the merits of a slightly more libertarian approach that reduces the regulatory burden and fosters innovation while preserving Europe’s high quality of life.

P.S. Shortly after our interview, European Commission President Ursula von der Leyen unveiled the Competitiveness Compass at Davos 2025, a new roadmap for boosting the EU’s global competitive standing. Based on recommendations from economist and former Italian PM Mario Draghi, the initiative focuses on three key areas: innovation, decarbonization, and security. While I think it risks trying to do too many things at once, I’m glad to see the EU Commission at least taking this seriously and addressing many of the same structural issues we discussed in the interview and that I brought up in my previous article. It’s a start, and if executed on in a focused manner, it could help Europe regain its momentum.

P.P.S. We had some recording issues, so I wasn’t able to produce a video or audio version of the interview, unfortunately. For this time, you’ll have to stick with the written version. Enjoy!

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Philip Skogsberg: Great to talk to you today, Hugo. What’s your background, and how did you end up where you are now?

Hugo Bezombes: I actually started Into Europe as a corona hobby, which I think surprises people. I had just finished my bachelor’s in engineering at the Eindhoven University of Technology and had taken a leave of absence from my job at a startup in the Brainport region near Eindhoven. My plan was to take a few months off, travel to Latin America, and improve my Spanish. I flew to Colombia in February 2020—back when COVID was still something people in Europe thought of as a “Chinese thing” that wouldn’t spread globally. I managed to have a good three-week run in Colombia before countries began shutting down.

I returned to Europe on one of the last flights out of the country. Colombia ended up closing its borders for eight months. I was stuck in hard lockdown in Paris at my parents’ house without much to do. Most of my belongings were still in the Netherlands, where I had sublet my room. I needed to do something to keep my sanity, so I started writing essays on LinkedIn about topics I found interesting. Eventually, I turned one of those essays into my first video. It was very rough and focused on sustainability—a video about "The End of Plastic?" That video was my first experiment in blending research with storytelling, and while it was amateurish, it taught me a lot about how to present complex ideas in a digestible format.

When I got back to the Netherlands, I kept working on these video projects. At some point, my focus shifted from sustainability to Europe—first sustainability in Europe, then Europe more broadly. I drew inspiration from other creators, especially Vox, in terms of how they approach storytelling. Initially, my videos were very visually and animation-driven, but over the past four years, my focus has shifted more towards deep dives into policy. The transition was gradual but intentional, as I realized that the challenges Europe faces require a more analytical and research-based approach.

Now, I combine visual storytelling with policy analysis. I look at academic studies, present key issues to my viewers, and try to separate narratives from facts so people can have a holistic understanding of the problems and the potential solutions. In many cases, the solutions are already known. Policies exist, but they’re rarely presented with their pros and cons. I apply this approach to some of the biggest challenges facing Europe: the technological race, the energy crisis, immigration, aging societies, innovation—a very broad set of topics. I enjoy being a generalist tackling these problems because it allows me to connect the dots across disciplines and bring fresh perspectives to my audience.

Philip Skogsberg: Sounds like you and I have the generalist thing in common for sure. I’m curious—how did you pick up your skills for all this research? You’re not an academic, as far as I can tell.

Hugo Bezombes: I read a lot—and not necessarily easy books. While I’m not an academic, I do have an academic background. I have a master’s degree, and over time, I’ve refined what you might call an academic skill set without being an actual academic. I think the curiosity to learn and the discipline to structure information are key elements I’ve developed.

Much of what I produce sits somewhere between academic and journalistic work. Both fields aim to uncover the truth, but they often go about it in very different ways. I have this sort of non-journalistic background, but I'm still doing journalism of a kind. And with my engineering background, I take an engineering approach to figuring out what's going on with reality, which can make my content feel a bit academic sometimes. That said, I try to make it as accessible as possible because the goal is to reach a broad audience. I wouldn’t claim to be an expert in any one field, but I’ve developed a knack for analyzing and synthesizing information from various disciplines, which helps me connect ideas and present them in a coherent way. I think it’s different from what I see most people produce on YouTube, or even in newspapers.

Philip Skogsberg: In many of your videos, you explore Europe’s various challenges, from economics, tech, immigration and policy. To start broadly: what do you think are the primary reasons Europe has stagnated over the last decade, especially compared to others like the US?

Hugo Bezombes: Well, one of the things I think is important to keep in mind when we talk about Europe’s stagnation is that before being a technological issue, it’s also a demographic issue. Europe is one of the first continents to age. There are countries that aged before Europe, like Japan, for example. But Europe’s working-age population, excluding immigration, peaked around 2005 for most countries. Because you have this aging workforce and a declining youth population, which tends to drive new innovations or at least implement them within society, it just slows a lot of things down.

What you’re seeing right now, compared to other parts of the world, especially China, South Korea, and the United States, is that they still have youthful populations and are reaping the demographic dividend. As these countries age, they will face some of the same problems we’re facing in Europe at the moment. But aside from the demographic element, you also have an institutional framework that’s quite different in Europe compared to other countries. In the case of China and South Korea, these were emerging economies until very recently. For them, everything was about economic development, and they didn’t have the "incumbency status" that might prevent innovation or the implementation of new technologies.

There was this policy document created a while back by China which outlined a new strategic industrial policy called the "Made in China 2025" initiative. It’s essentially about shifting focus to adopt new technologies in order to achieve technological supremacy. For example, China knew it wasn’t going to win the technological race by making better combustion engines than the Germans. The Germans have a 100-year advantage in those technologies. So, China shifted its focus to new technologies like electric vehicles and batteries, areas where they could leapfrog and establish technological supremacy. Europe, on the other hand, was the incumbent in a lot of these technologies and didn’t have the institutional or policy incentives to push forward with new innovations.

Finally, there’s a cultural dimension, which gets mentioned a lot and is also backed by evidence. Europeans are less inclined to take risks compared to Americans or Chinese. This is reflected in how Europeans spend and save their money. They are more likely to have their money sitting in the bank rather than investing in stock portfolios or venture capital funds. Governments also tend to tax equity more heavily than debt, which creates disincentives for creating new businesses. It facilitates the continuance of existing businesses but makes it harder to set up new ones.

Additionally, fewer Europeans want to be entrepreneurs because it’s quite comfortable to be an employee in Europe. When you put all these factors together, it makes it much more challenging to start a company, develop new technologies, or raise venture capital. On top of that, there are fewer people in the prime age group to start new businesses.

I think those are probably the three main factors behind Europe’s relative technological stagnation.

Philip Skogsberg: I’ve seen a lot of these graphs recently comparing the US, Europe, and other developed countries like Japan, Australia, and Canada. What’s striking is that pretty much everyone except the US seems to be stagnating. Even China’s growth has slowed despite its rapid growth in recent decades. Could it be that the US is actually the outlier rather than Europe being uniquely problematic?

Hugo Bezombes: Yeah, there are a couple of interesting theories about why the US is managing to dodge many of the problems facing the rest of the world. One of the more interesting ones I’ve read is about the reserve currency status of the United States. This status enables it to get away with things that would otherwise not be possible for other countries in terms of raising debt and attracting investment. The US national debt has increased by, I think, 60 points over the past 15 to 20 years. By contrast, the average for European countries or the European Union is about 30 points. The increase in US national debt has been phenomenal, which allows the country to fuel its economy.

But then the question arises: is it good debt or bad debt? Good debt is the kind that fuels or funds productive investments, while bad debt is the kind you use to pay for pensions or social welfare benefits. It’s hard to know for sure right now, but I would say that in the case of the US, you could argue that a significant portion of the debt has been for productive investments. That’s one theory I find interesting. And, of course, there’s also the demographic argument. The US still manages to attract top global talent, and that has a big impact as well.

Philip Skogsberg: What are some common misconceptions you hear when it comes to Europe’s challenges, particularly the economic ones, and the comparisons people often make between the US and Europe?

Hugo Bezombes: Well, one misconception I think is important to address is about Europeans working fewer hours. When it comes to working hours, Europeans do work less than Americans—at least that’s what the OECD data tells us. On average, Europeans work about 70 percent of the hours that Americans do. But there are big disparities between countries. For example, Germans work the fewest hours, which is partly driven by high rates of part-time work and the absence of work for women with children. The Netherlands is also at the lower end, with an average working week of 31 or 32 hours. On the other hand, Greeks—who have a reputation for being lazy—actually work the most hours in Europe, with Poles close behind.

It’s not just about mentality, though. It’s also about the incentives associated with working more. If you look at the marginal taxation rates in Europe, they’re often very high—sometimes prohibitively so. These rates discourage people from working longer hours or earning more. I think back to a slogan from Nicolas Sarkozy when he was running for president in 2007: “travailler plus pour gagner plus”—work more to earn more. Well, with marginal tax rates of 60 to 70 percent, that’s not really happening in Europe.

Another common misconception is the idea that Europe can’t innovate. That’s not entirely true. Europe has a lot of innovators and talent, but the incentives and systems to support innovation aren’t as strong. The risk appetite, access to capital, and willingness to work more just aren’t there to the same extent as in other regions. At the same time, some of the factors that hold us back might actually be seen as positives. For example, Europe has a strong social welfare system and one of the best qualities of life on the planet. But this comfort can reduce the incentive to work harder or take risks. The question is whether this trade-off is sustainable in the long run. If our economies get left behind, how do we maintain the social systems we’re so proud of?

Finally, I’d say another misconception is that Europe’s relative decline impacts every country equally. That’s not true. There are huge disparities across the continent. The Nordic countries, for example, are mostly doing fine. They’re not necessarily leading in developing new innovations, but they’re excellent at implementing innovations—often from the United States. The Netherlands is in a similar category; there’s a lot of innovation happening there. Sweden, too, has a strong track record. But bigger countries like Germany, France, and Italy are struggling a lot more with implementing changes and reforming their governance structures.

(Fun fact: Germany still uses fax machines for official communications!)

Then you have Central and Eastern European countries, which have modernized significantly in the past 20 to 30 years. Poland, for example, has had a pretty big demographic dividend, which has allowed it to modernize and build a strong economy. But in Poland’s case especially, it’s uncertain how sustainable this will be. Their birth rate is around 1.1 children per woman, one of the lowest in Europe. So, there’s good news, less good news, and bad news, depending on where you look across Europe.

Philip Skogsberg: In pretty much every developed country in the world—and even in many developing ones—fertility rates are below replacement levels. A lot of countries in Europe are well below replacement. Interestingly, the lowest fertility rates in Europe tend to be in the south rather than the west. The Nordic and Western countries are doing okay but still below replacement. Immigration has been the answer for many countries. But now it’s become a big issue in many parts of Europe. (Something you explored in depth in a very interesting and nuanced video about Muslim immigration to Europe.)
So, with all that sad, what are the biggest challenges European economies face in terms of demographics? And to what extent is immigration a viable solution for the future?

Hugo Bezombes: That’s a tricky question because no European country is in exactly the same situation when it comes to immigration. Spain and Portugal, for example, are in a separate category because of their ability to attract talent from culturally similar countries in Latin America. Portugal also benefits from its historical ties with former colonies like Angola and Mozambique, which creates less cultural friction. Central and Eastern European countries, like Poland, the Czech Republic, and Slovakia, have addressed their demographic challenges with relatively compatible Ukrainian immigrants, especially since the Russian invasion of Ukraine. A lot of Ukrainian immigrants are settling in these countries, and in some cases, they may stay for good because the quality of life and incomes in places like Poland are relatively high.

Germany has a more mixed immigration profile. They’ve welcomed many Middle Eastern immigrants, such as Syrians, but also attracted high-skilled workers from Southern European countries. Until recently, Germany had a significant number of Polish immigrants as well, though that’s starting to change as many of them are returning back to Poland. The UK is another interesting case. Before Brexit, a lot of their immigration came from within the EU. Now, it’s primarily from outside the EU or the broader European cultural space. France and Sweden, I think, are in very similar situations. They’ve attracted large numbers of immigrants from predominantly Muslim countries over several decades, and in Sweden’s case, particularly in the past decade.

What’s important here is to distinguish between different types of immigration and their impacts. I made a video some time ago about the economics of immigration and what it’s “good for.” Of course, when you look at the problem from this perspective, you will face the accusation, as I have, that it’s a way of dehumanizing people—because you're just looking at the numbers and saying, 'Hey, this is good for the country or this is bad for it.' The dimension of human rights kind of gets neglected in this debate. Anyway, I just thought I would mention it here before continue talking about the economic aspects.

Does Europe need high-skill immigration? Always. There's practically no downside to having high-skilled immigration coming to your country. It helps with innovation, helps businesses, and helps raise incomes. It does have some impacts on societal cohesion, but because high-skilled immigration tends to be much smaller in volume, the impact is quite small in most countries.

When it comes to low-skilled immigration, Europe (and the Western world more broadly) are quite unique in that they tend to let people from low-skilled backgrounds settle in the country, get permanent residence permits, eventually gain citizenship, and bring their families over. One reason for this action was human rights concerns in the 1990s and to align the rights of non-EU immigrants (third-country nationals) with the rights of EU nationals in another EU country as to avoid discrimination.

But is this a smart move economically? That’s much less certain. Europe does, to a certain degree, need some amount of low-skilled immigration to, as people say, build houses, maintain the roads, and work on farms, especially in Southern Europe. But in the long term, the cost of having people from low-skilled backgrounds, especially from different cultures, come to the country and have kids there means that these countries have to deal not only with the cost of paying social welfare for these people and their families—because in Europe we have generous social welfare systems where we support working-class people economically—but it also poses multicultural challenges. It means there’s difficulty in turning their children into productive and integrated members of society later on, which is quite a tricky challenge.

However, there is one question that I have yet to answer when it comes to aging within European society: how much immigration do we actually need? There’s this interesting paper that I read a couple of weeks ago by two French economists looking into labor productivity and innovation in France after World War I. As you know, World War I was absolutely devastating from a demographic perspective in France. I don’t remember the exact statistic, but I think one million men aged 18 to 35 were dead, and another million were wounded, out of a population of what was, at the time, about 40 million people.

So, what these economists did is they looked at the implementation of innovation in the regions of France that had seen the most casualties. What they found is that those regions that had the highest casualties but also had a high educational background mechanized their agriculture faster and implemented labor-saving innovations faster than other regions of France. This combination of high-skilled labor and the idea of replacing labor with capital is something that has happened in the past and would probably happen in Europe today as well. But because we have this idea that we need labor for everything, we are refusing to acknowledge that there’s another way forward.

Instead, look at what’s happening in many East Asian countries where there’s a far lower level of immigration; Japan is full of automated vending machines because it’s easier to sell stuff that way [without a cashier or sales clerk]. China is deploying delivery drones, which is something we don’t want to do in Europe out of privacy concerns, which means we need many more workers. But this replacement is possible. Unfortunately, since we have this idea that immigration is a lever that will fix these labor shortages, we’re refusing to see a world in which technology could also fix them.

Philip Skogsberg: Necessity is the mother of invention.

Hugo Bezombes: Yes, something like that.

Philip Skogsberg: So, we’ve seen a lot of mixed effects from immigration on, for example, social cohesion—whether real or perceived—and the rise of populism and far-right parties. Not everyone, perhaps even very few, is really racist, but people are tribal and are suspicious of those from outgroups. Any society, whatever its major ethnic group, will see tension when there’s a lot of mixing. History shows us this repeatedly. The question is, are we heading towards a Europe where many immigrants eventually (by force or by choice) emigrate back to their home countries, or will we just mix up and get used to it and become more American in our approach—where as long as you pay your taxes and work hard, it doesn’t matter where you’re from? Where do you think we’re headed?

Hugo Bezombes: That’s a tricky question again. I’m not fully there yet with my analysis or understanding of the problem. But I think where we’re headed depends on two main factors. The first is Europe’s future immigration policy. Over the past decade, Europe has become multicultural, regardless of whether the policy explicitly encouraged it. We now have a mix of ethnic, religious, racial, and cultural groups across the continent. This demographic shift also changes the political landscape, as new groups with different interests sometimes clash with the values of the native majority—or what we might call the "traditional cultural majority."

You also see political entrepreneurs in some countries exploiting these differences for their own gain. A good example of this is France, where La France Insoumise, a political party that received about 22% of the vote in the last presidential election’s first round, is now putting forward municipal election candidates from Islamist groups. This creates tension. When immigration overlaps with these shifting power dynamics, it becomes very difficult to establish a stable status quo, which is critical for social stability.

When I think of a non-European country with a multi-ethnic composition that has succeeded, Singapore often comes to mind. It’s one of the most successful countries in the world, albeit a city-state, and it maintains a stable ethnic balance. The country’s population is approximately 77% ethnically Chinese, 15% Malay, and 7% Hindu Indian. This demographic balance has been maintained deliberately over six decades. Everyone is a citizen and equal under the law, the law explicitly forbids a single group—in this case, the Chinese majority—from trying to dominate the others.

A lot of the tension in Europe, I think, comes from having one growing group—here, I have to call a spade a spade—the Muslim community, which while facing some very real discrimination, in many cases seeks to assert its values or influence more strongly than other groups. The absence of equilibrium in demographic terms creates instability. Immigration policy could play a role in stabilizing or exacerbating the situation, but it needs careful planning.

Another key question is how to create a cohesive society. Once you have a stable demographic makeup, how do you ensure shared values and mutual respect? Denmark is an interesting case. They’ve adopted a strategy similar to Singapore in some ways, like refusing to allow ethnically segregated neighborhoods and working hard to spread out immigrant populations across the country. However, Denmark’s end goal appears to be different. While Singapore’s goal is to preserve distinct ethnic identities within a unified national framework, Denmark aims to dilute distinct identities into a broader Danish identity. Over time, though, inter-ethnic marriages and social integration may naturally lead to the emergence of a more cohesive society.

On the other hand, the worst-case scenario is something akin to Lebanon, where you have multiple religious or ethnic communities competing for power with no dominant group. This creates a fragile equilibrium that often leads to conflict. While I don’t think Europe is heading in that direction yet, it’s a scenario to be cautious about, particularly in countries with high levels of immigration, like France, Sweden, or even the UK. Germany’s case is harder to assess because they don’t publish detailed demographic data.

Philip Skogsberg: Saving the easy questions for last: Should the EU become a federation? Would that solve all our problems, or would it make things worse?

Hugo Bezombes: Pros and cons, as always. I think a federation could solve some problems but would create others. Do I think Europe needs an industrial policy to tackle its problems and coordinate unified responses to big challenges? Yes. Do I think a European Federation is the best way to achieve that? Probably, yes—because you need a centralized authority to impose policies and override certain national interests when necessary. Take the German auto lobby or the French nuclear lobby, for example. Sometimes, these national interests hold back broader progress.

However, I have reservations about the EU becoming a federation in its current state. The EU is very technocratic and statist right now, heavily influenced by the French model of governance. In France, the approach has historically been that if something isn’t explicitly authorized, it’s banned. This mindset is evident in how the EU approaches regulation—look at the EU AI Act, which was drafted before AI has even become a widespread issue. If the EU were to become a federation, I worry this over-regulation tendency would become overwhelming.

Another challenge is the internal dynamics of a multi-nation federation without a common culture. Yes, Europeans share many similarities, but the differences in language, identity, and history are significant. There’s a great book by Dutch author Caroline de Gruyter that compares the EU to the Habsburg Empire. The book explores how the Habsburgs managed compromises between regionalism, cultural identity, and political centralization. It’s a useful lens for understanding the EU’s current challenges and the difficulties of creating a cohesive federation.

Philip Skogsberg: Yeah, trade-offs, as always. Finally, where would you like to see Europe and the EU go in the future? What should be its focus or purpose?

Hugo Bezombes: As a journalist, I’m hesitant to give personal opinions, but I’ll share a general perspective. I think the Western world—including Europe, the US, Australia, New Zealand, and even parts of Latin America—should be moving slightly more toward a more libertarian approach to governance, with deregulation and reduced government intervention. I believe a degree of that in Europe wouldn’t hurt. Taxes here are insanely high, and regulations make it difficult to start new businesses. People need more breathing space to innovate and take risks.

When Brexit happened, there was talk of turning the UK into a “Singapore on Thames”—a modern, globally connected country. That didn’t really materialize, but some elements of that vision could benefit Europe as a whole. Balancing welfare systems with economic dynamism is critical. Encouraging entrepreneurship and innovation while maintaining a high quality of life would be the ideal path forward.

Philip Skogsberg: I couldn’t agree more. One insight I find interesting is that, historically, part of Europe’s success and its role in the Industrial Revolution came from the diversity of approaches the continent—a patchwork of nation-states and city-states competing economically and technologically. That competition drove innovation and the diffusion of new ideas. A centralized federation could risk stifling that dynamic.

Hugo Bezombes: Exactly. Some countries in Europe will remain successful for the foreseeable future, but the challenge is ensuring others don’t fall too far behind. Emmanuel Macron once described the EU as a communauté de destin—a community of destiny. I think that’s a fitting description. Benjamin Franklin said it well too: “We must, indeed, all hang together or, most assuredly, we shall all hang separately.” That’s how I see Europe. We need to make this ship as solid as possible.