Heh. I don't know whether you're American, and so you don't know how damn cool Europe is, or European, and so you don't know what a shambles America is, or you're from somewhere else entirely and just don't know anything at all, but either way, you're so incredibly wrong.
Without loss of generality, I will assume below that you are European.
The arms industry in Europe can be as corrupt as it wants - it still doesn't consume the incredible proportion of GDP ours does, and it still doesn't own your government outright. That corruption is utterly, utterly insignificant in terms of how European society is run and where the money actually goes. I'll grant you that arms corruption is a Bad Thing, and making money off killing people is even worse, but Europe ain't got nothing on America in that regard. (Note: right now. Clearly, in the past, this was not the case, but we're discussing current affairs.)
Public finances in many European countries are a mess, yeah. I give you Indiana. Or even better - I give you California, which has started selling its historical monuments and state parks in order to stave off bankruptcy.
Europe has nothing like immigration or social problems. They think they do. But they really, really don't. Large and growing Muslim minorities are, and let me make this perfectly clear, not a problem. They are a good thing.
The birth rate collapsing is a good thing. I don't care about retirement problems because they don't exist; the fact that they are actually planning for retirement at all is what makes Europe superior. And I'll draw your attention to the fact that those large, growing Muslim minorities are in fact paying into the retirement system. Just because it's not white, Christian money doesn't mean the system isn't working. And more importantly, Europe doesn't have (as many) thieves and brigands in power trying to get that social services lockbox open so their friends can buy more yachts - and the European media springs on that shit like rapid weasels when they do try it, because in Europe, they still report actual news, and the people, clearly remembering times when the government was demonstrably and openly against them, watch the government like a million hawks, and oddly enough, journalists there are OK with that.
And I'd like to state, just for the record, that if you think Europe is facing serious economic problems in the long term, I'd like to draw your attention back to America. The difference between Europe and America is that some people in Europe are at least planning management strategies; the corresponding people in America are mostly trying to figure out which part of Peru they're going to retreat to when things finally collapse.
But the point in your post that I really feel the most urgent need to address is this flabbergasting notion that the European Union is a failed project.
The European Union has been expensive, yeah. It's not even a tenth as expensive as the Iraq War, and here's the key: it isn't a failed project. There is no, no, no fucking way you can say the European Union has failed until you see an actual renewal of the centuries of warfare that ravaged this continent until the advent of the European Union.
I am, right now, sitting in Budapest, which joined the Union in 2005. To get here, I drove through Switzerland (part of the Union in all but name), Italy, and Slovenia, and then I drove back through Austria and Germany to return our rental car before flying back to Vienna (long story; one-way rentals are Not Cheap here). I've lived in Europe, and come to Europe, a lot over the last twenty years; my wife is Hungarian. So I know a lot about what I'm saying here. The advances I've seen this summer (it's been five years since I could afford to come) have blown my mind. Just the thought of driving across Slovenia in a single evening on their freaking new freeway system alone...
What I'm saying here, and above, is that Europe is prosperous. Oh, everybody's complaining about the Union right now - ever since Germans realized that a run on Greek banks affects them through the Euro zone. But the Union was inevitable, and the expansion of markets and lowering of trade barriers has been very profitable to Germany indeed. They're just really panicky about spreading inflation (something about that explosive inflation in the 30's really scarred the public psyche there).
But failed? No. The European Union is the greatest thing humanity has ever achieved - don't get me wrong, I love the American Constitution, and I'm all for ranking it right up there at the top of greatest innovations ever. But the history of Europe is one of blood and bombs, for the last couple of millennia, and now they're at each other's throats only at the rhetorical level.
The Union is a success.
If you've never been here, I encourage you to visit. If you've never left, I encourage you to examine some other parts of the world before thinking Europe is a failure.
(tl;dr: nyah, nyah, you're wrong, Europe rocks)