Profits that persist above or below the norm for prolonged periods of time revile a lack of competition and imply systematic misallocation of resources. Competition, if unimpeded, should restore profits to normal levels within a relatively short time frame. The dynamics of profits can thus reveal a great deal about the competitiveness of an economy. This paper estimates the persistence of profits across the European Union (EU), which adds to our understanding of the competitiveness of 19 EU-member states. By using a sample of approximately 5,500 firms with 54,000 observations across the time period of 1995 to 2013, we find differences in the persistence of short-run profits, implying that there are differences in competitiveness across the EU. Hungary and Greece are amongst the countries with the highest profit persistence, whereas the United Kingdom exhibits among the lowest persistence of profits. Furthermore, we provide evidence that there are significant permanent rents present in EU.