French President Emmanuel Macron has warned the EU that it needs a huge shift in its economic approach to avoid falling behind the US and China.
He said the EU has three to four years to correct course or the damage could be irreversible.
Mr Macron made the comments at the Berlin Global Dialogue.
The French President said: “If we continue with our old growth model, we will be uncompetitive in three or four years.”
He added that the EU needs to “wake up” before warning: “I truly believe that we are in danger.”
He added: “The EU could die, we are on the verge of a very important moment.
“Our former model is over – we are over-regulating and under-investing. In the two to three years to come, if we follow our classical agenda we will be out of the market”
The Eurozone was handed a huge boost this week as expected inflation in September fell below the two percent target set by the European Central Bank (ECB).
Inflation is now thought to be at 1.8 percent, meaning interest rates could be slashed.
The ECB warned however that it does not want inflation to drop too low.
They said: “We view inflation that is too low just as negatively as inflation that is too high.”
Matthew Ryan, head of market strategy at Ebury, has predicted that the ECB will now be “forced” to cut rates.
He said: “While President (Christine) Lagarde indicated to markets at the last meeting that an October cut was not in the bank’s baseline scenario, we think that macroeconomic data since then is highly likely to force the bank’s hand.
“Not only is inflation continuing to come down nicely, but the Euro Area economy appears to have practically stagnated in the third quarter of the year, at least according to last week’s dismal set of business activity PMI figures.
“We see another 25 basis point cut as set in stone this month, with Lagarde likely to both express greater confidence on inflation and warn over the state of the bloc’s economy. This would likely tee up a third straight rate reduction at the bank’s December meeting, which is now fully priced in by swap markets following today’s data.”