Recent reports show that Europe is replacing the United States as the most important driver of the world economy.

For almost a century, the U.S. economy was the big show in town. Several smaller economies vied for side stage, but the bright lights and headlines were reserved predominantly for the United States. Global economies either basked in the light of this single economic superstar or got little to no light at all. When the U.S. economy surged, global growth surged. When America slowed or faltered, other economies usually slowed and faltered too.

No longer. The world has become multi-polar, and America’s economic dominance has fallen in measure. And although other nations, such as China, are also muscling their way into the limelight, the EU has already taken its place on center stage—even bumping the U.S. aside in certain areas.

For example, the EU boasts the world’s largest economy, reported at $14.78 trillion, compared to the U.S. at approximately $13.45 trillion. The eurozone’s growth is also predicted to be greater in 2007 than that of America, according to the EUobserver.

“European stocks are up a strong 10 percent this year, after having tripled in value in dollar terms since the 2003 trough,” wrote Ruchir Sharma for Newsweek. According to the Organization for Economic Cooperation and Development (oecd), the 13-state-strong European currency union is projected to outdo the growth percentage of the U.S. gross domestic product by 0.6 percent in 2007. Considering the growing strength and popularity of the euro, a falling unemployment rate and high exports, the economic trends in Europe look decidedly positive.

Some are referring to Europe’s rising economic outlook as “EU-phoria”—and there may be good reason for the excitement. According to Sharma, “for the first time in recent history … Euroland will likely outperform the U.S. economy.”

While Europe is on the upswing, the U.S. is struggling to cope with a slowing economy, a sick housing market, a growing trade deficit, and a mounting debt load. Consequently, the world is starting to look to Europe for global economic leadership. As oecd chief economist Jean-Philippe Cotis said, “Europe [is] taking over the baton from the United States.”

Read “New Global Trend: Dump a Dollar, Buy a Euro” to better understand the profound implications of this handoff.