Brussels – Euro zone households continued to expand their savings in the second quarter of 2025, defying expectations of a decline that would spur private consumption and bolster growth in light of export challenges, according to Eurostat data, reports 24brussels.

In 2024, the household saving rate in the euro area remained relatively consistent, hovering between 15.2% and 15.3%. Specifically, the rate registered at 15.2% in the fourth quarter of 2024 and was revised upwards to 15.3% for the third quarter of 2024, remaining steady in the last quarter.

Why are euro zone households still saving more than expected?

Eurostat indicated that the household savings rate climbed to 15.4% in the second quarter, up from 15.2% in the previous three months, significantly exceeding the 12% to 13% range typical of pre-pandemic periods.

Households have boosted their savings as they seek to rebuild wealth lost during the inflation surge that followed the pandemic, while also establishing financial buffers in response to negative news regarding tariffs, competitive weaknesses, and sluggish economic growth. Notably, the nation’s investment rate has stabilized at 9% after a period of decline over the past year.

Could high savings rates slow the euro zone economic recovery?

Economists have anticipated a reversal in savings trends for some time, given that real wages are recovering from the inflation spike and unemployment rates remain at near-historic lows. The European Central Bank (ECB) forecasts a decrease in the savings rate to 14.7% this year, with further declines projected in the upcoming years.

This increase in the savings rate contrasts sharply with the situation in the United States, where savings have steadily declined, dipping below 5% in August. While economists predict that household spending will aid growth in the latter half of the year due to expected declines in net exports, retail trade growth in August was only 1.0% year over year, suggesting continued caution among households.

Why is the profit share of euro zone firms falling?

Eurostat has also reported a consistent decrease in the profit share of euro zone firms this quarter, marking an ongoing trend since early 2023. This decline indicates decreasing profitability as wage growth surpasses value added, raising concerns regarding economic growth potential.

In 2023, the profit share for euro area companies was approximately 40.7%, slightly lower than previous periods, with this trend persisting into 2025. For the first quarter of 2025, the profit share was about 38.8%, reflecting the impact of rising wages outpacing business value added growth, pointing toward potential challenges for economic expansion and corporate profitability within the euro zone.

• A researcher says schools are failing to teach skills AI can’t replicate, like critical thinking.
• Anitia Lubbe of North-West University says students should learn to critique AI, not just copy it.
• The South African professor outlined 5 ways educators can stop students from outsourcing thought.

Across university campuses, professors are wrestling with a new kind of plagiarism panic: the fear that students are letting ChatGPT and other generative AI tools do the thinking for them.

But one education researcher said that the real crisis isn’t cheating — it’s that higher education keeps testing the very skills AI performs best, while neglecting others it can’t.

In an essay for The Conversation published on Sunday, Anitia Lubbe, an associate professor at North-West University in South Africa, said universities are “focusing only on policing” AI use instead of asking a more fundamental question: whether students are really learning.

Most assessments, she wrote, still reward memorization and rote learning — “exactly the tasks that AI performs best.”

Lubbe warned that unless universities rethink how they teach and assess students, they risk producing graduates who can use AI but not critique its output.

“This should include the ability to evaluate and analyse AI-created text,” she wrote. “That’s a skill which is essential for critical thinking.”

Instead of banning AI, Lubbe said, universities should use it to teach what machines can’t do — reflection, judgment, and ethical reasoning.

She proposes five ways educators can fight back:

1. Teach students to evaluate AI output as a skill

She said professors should make students interrogate AI generative tools’ output — asking them to identify where an AI-generated answer is inaccurate, biased, or shallow before they can use it in their own work.

That, she said, is how students learn to think critically about information rather than just consume it.

2. Scaffold assignments across multiple levels of thinking

Rather than letting AI handle every stage of a project, she urged teachers to design tasks that guide students through progressively deeper levels of thinking — moving from basic comprehension to analysis and ultimately to original creation — so they can’t simply delegate the entire process to a machine.

3. Promote ethical and transparent use of AI

Students, she said, must understand that responsible use begins with disclosure — explaining when, how, and why they’ve used tools like ChatGPT.

She said that openness not only builds integrity but also helps demystify AI as a learning partner instead of a secret weapon.

4. Encourage peer review of AI-assisted work

When students critique each other’s AI-generated drafts, she said, they learn to evaluate both the technology and the human thinking behind it.

That process, in her view, restores a sense of dialogue and collaboration that pure automation erases.

5. Reward reflection, not just results

She said grades should factor in how students used AI — whether they documented their process, justified their choices, or demonstrated learning through comparison with the machine’s reasoning.

“But focusing only on policing misses a bigger issue: whether students are really learning,” Lubbe wrote.

A wider academic alarm

Lubbe’s warning echoes a broader unease among educators that students are quietly outsourcing thinking to AI.

Last week, Kimberley Hardcastle, a business professor at Northumbria University, wrote that AI allows students to “produce sophisticated outputs without the cognitive journey traditionally required to create them,” calling it an “intellectual revolution” that risks handing control of knowledge to Big Tech.

While Hardcastle fears AI is hollowing out critical thought, former venture capitalist turned educator Ted Dintersmith warned that schools are already training students to think like machines — a mistake he says will leave them unprepared for a job market where “two or three people who are good at AI will replace 20 or 30 who aren’t.”

Last week, he told BI that schools are already “training kids to follow distantly in the footsteps of AI,” churning out “flawed, expensive versions of ChatGPT” instead of teaching creativity, curiosity, and collaboration — the very skills machines can’t replicate.