In the third decade of the 21st century, the European continent continued to attract global attention with its unique high welfare model, with German workers working an average of 34 hours a week, the number of paid holidays in France breaking 36 days, and the Nordic countries incorporating the "four-day work system" into policy discussions.
However, this phenomenon of "high welfare and short working hours" that seems to violate economic laws is actually based on an invisible triangular network composed of U.S. military protection, cheap Russian energy and China's productivity support.
However, with the outbreak of the Russian-Ukrainian conflict and the adjustment of China-U.S. strategies, this welfare network that hasined Europe for 30 years is facing an unprecedented risk of rupture.
U.S. security tax
After the end of the Cold War, the NATO system became the core pillar of European security, and the Stockholm International Peace Institute data showed that EU national defense spending in 2022 accounted for only 1.6 percent of GDP, far below the 3.5 percent of the United States.
Behind this "low military spending, high welfare" model is the United States 'global military spending of more than one trillion US dollars every year. Take Germany as an example. Its defense budget in 2025 is about 50 billion euros, while social welfare expenditures in the same period are as high as 1.2 trillion euros., the latter is 24 times the former.
Through a military technology alliance, the United States further reduced European defense costs, with European countries participating in research and development as "partners" in F-35 fighter aircraft projects, and the actual costs of research and development are less than 15% of the total cost of the project.
This technology transfer enables Europe to invest more resources in people’s livelihoods, such as Denmark’s military savings on renewable energy research and development, where offshore wind technology already accounts for 30 percent of the global market.
However, in 2025, the Trump administration asked NATO member states to increase military expenditures to 5% of GDP, directly impacting the European welfare system. The German Bundestag Budget Committee estimates that if this standard is implemented, Germany will need to spend an additional 180 billion euros per year, equivalent to cutting education or medical budgets by 40%.
The Russian “Economic Belt”
The energy ties between Russia and Europe can be traced back to the Soviet era. The Nord Stream 1 Pipeline, which was started in 1996, delivered 55 billion cubic meters of natural gas to Europe every year after it was officially ventilated in 2005, accounting for 40% of the EU's total imports.
This low-cost energy supply makes Germany's manufacturing energy cost 30% lower than the U.S., supporting high-wage employment in the automotive, chemical and other pillar industries, and by 2021, Russian gas will meet 60% of Italy's power generation demand and 45% of Germany's chemical raw material supply.
But the Russia-Ukraine conflict became a turning point in the energy landscape. After the Nord Stream pipeline exploded in September 2022, Europe was forced to import U.S. liquefied natural gas at four times the price.
German chemical giant BASF estimates that the surge in energy costs has led to an increase of 800 euros per tonne in product costs at its port base in Ludwig, forcing the base to cut production capacity by 30 percent.
Russia has shifted the focus of energy exports to Asia. In 2025, its supply of pipeline gas to China will increase by 120% compared with before the conflict, and the price will be 35% lower than that of the European market. This "eastward turn" has put Europe facing a double dilemma: it has to bear high prices for energy, and loses bargaining power.
China’s “World Factory”
China’s support for the European welfare system is reflected in two dimensions, as a consumer market and as a production base.
After joining the WTO in 2001, European companies established a large number of production bases in China, using cheap labor production in China and returning to Europe, Volkswagen Group data show that it employs 70,000 workers in China, annual income of more than 300 billion yuan.
The 300,000 employees in Europe generate only 16 billion euros in revenue. This "offshore production" model allows European companies to maintain high local wage systems at lower costs.
As a consumer market, China's demand for European luxury goods and high-end equipment continues to rise. In 2025, China's imports of European machine tools will account for 28% of its total exports, and its expenditure on luxury goods such as Louis Vuitton and Gucci will reach 45 billion euros.
But China's industrial upgrading is changing this pattern: in 2023, China's new energy vehicle exports will surpass Japan's for the first time, BYD's European market share will exceed 12%, directly impacting the German automobile industry, and the Volkswagen Group is forced to close two factories in Germany. The first local factory closure since 1945.
The Triangle Relationship
But at present, the three main pillars that support the European welfare system have shaken, with the U.S. "Inflation Cutting Act" attracting European investment through high subsidies, European direct investment in the United States increased by 42% in 2024, including the German chemical company BASF's ethylene plant in Texas, the investment amount of $ 10 billion.
After Russia's energy shift, industrial electricity prices in Europe in 2025 will increase by 220% compared to 2021, leading to the transfer of high-energy industries such as steel and aluminum to the Middle East.
China, on the other hand, has built technological barriers in the fields of new energy, semiconductors and others, raising export tariffs on European photovoltaic products to 15% by 2025 and directly undermining Europe's green transformation capabilities.
This imbalance is evident at the fiscal level, with the European Commission’s data showing that the euro area’s fiscal deficit will rise to 5.8% of GDP by 2025, a record high.
In order to maintain welfare expenditure, the French government postponed the retirement age from 62 to 64, triggering a nationwide strike, while Germany cut child subsidies, causing the birth rate to fall further to 1.3.
Although the Nordic countries still maintain a high level of welfare, revenues from the Norwegian Petroleum Fund fell by 35% due to global energy transition and Swedish manufacturing exports led to an increase in unemployment rate to 7.2%.
Currently, Europe is trying to address the challenge of reducing blood transfusions through policy adjustments, with the EU planning to increase R&D investment to 3% of GDP by 2030 while expanding domestic rare earth mining and processing and reducing material dependence on China.
Germany is promoting the upgrade of "Industry 4.0" and trying to offset the efficiency loss caused by short working hours through automated production, but these measures are unlikely to be effective in the short term.
The 80 billion euros invested in the German industrial recovery plan in 2025 will still need to be recovered by exporting high-end equipment to China and the United States, while China-US-Russia's strategic adjustment is also ongoing.
China accelerates new energy replacement, reduces import dependence on high-end equipment in Europe, Russia deepens energy cooperation with Asia, the share of energy exports to Europe continues to decline, while the United States promotes the re-flow of manufacturing, competing with Europe for global market share.
conclusion
This 30-year-old relationship of "blood transfusion" and "benefit" is reshaping the global economic landscape. Europe's high welfare and short working hours model is not only the result of its own development choices, but also a product of the global resource allocation and trade pattern.
As the game between China, the United States and Russia in resources, industries and markets intensifies, whether Europe can maintain its current welfare level depends on whether it can rebuild its endogenous growth momentum, rather than continuing to rely on external "blood transfusion".
The success or failure of this transformation is not only related to the work and lifestyle of Europeans, but also affects the restructuring of global industrial chains and the redistribution of economic power.
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Playing the "energy card" pressure on Russia Europe is under counterfeit - international online -
https://baijiahao.baidu.com/s?id=1810802384685072368&wfr=spider&for=pc"If the United States 'nuclear protection fails, can Europe be" nuclear self-reliant "?"-- World Wide Web--
https://baijiahao.baidu.com/s?id=1830007493858520081&wfr=spider&for=pc"After the four-year trial implementation ended, Iceland officially implemented the four-day working system, and netizens quarreled!"-Jiangnan Metropolis Daily-
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