Struggling to get its vaccine campaign and economic recovery plan in gear, Europe can only watch with envy the stratospheric growth path projected for the stimulusfueled U.S. economy.

But officials and economists caution against direct comparisons between the two, noting that much of the divergence masks inbuilt support that European workers and businesses get from the regions more extensive welfare states, supplemented in many cases by generous furlough schemes.

The bigger question, they say, is whether Europes web of greater social protections will in the longer term stifle the remodelling of its economy which leaders hope will be one of the few positive takeaways from the health crisis.

The European social contract leads to a slower rebound, Daniel Gross, head of the Centre for European Policy think tank in Brussels, said of the implicit tradeoff between securing existing jobs and businesses and allowing new ones to emerge.

It might also impair medium term growth as structural changes are too slow, he warned.

The same factors were at play when Europe emerged much more slowly than the United States from the 200809 global financial crisis. This time, the added concern is that delays with vaccine rollouts across the 27nation EU make it vulnerable to further crippling lockdowns even as the U.S. economy returns to life.

Washingtons new 1.9 trillion stimulus package has shone a yet harsher light on the EUs woes the Federal Reserve this week projected a 6.5 growth rate…