Europe is facing important political choices as negotiations begin on the new multiannual budget. Investment in security, energy security, climate, digitalisation and migration are inevitable. The question is no longer whether we should make these investments, but how: collectively, at the European level, or each country on its own?
A Small European Budget, Big Impact
In Belgium, public expenditure accounts for 54.5% of GDP. This means that for every 100 euros we earn, the government spends 54.5 euros on healthcare, education, pensions, security and other public services. In that context, the European budget is very modest: about 1% of the combined GDP of the member states. Put differently: the EU spends just one fifty-seventh of what our local, regional and national governments spend in total. All EU spending combined is roughly equal to Belgium’s social expenditure. That says a lot.
The EU budget amounts to 192.8 billion euros. That’s 428 euros per citizen, or around 1.17 euros per day. Today, you’d struggle to get half a pint for that in many cafés. It’s also far less than federal spending in the US, where the average American contributes around 19,900 dollars annually to the federal government.
An Impressive Return on Investment
European citizens get a lot in return for that 428 euros. The added value of the European Union was recently calculated at 6,700 euros per citizen. For every euro Europe costs, we gain fifteen euros in prosperity. That’s an impressive return on investment.
So what exactly does the citizen get in return? Of the total EU budget, 66 billion euros goes to cohesion funds for less-developed regions. Limburg alone received over 900 million euros, attracting more than 2 billion in investments. Another 40 billion goes to agriculture, 21 billion to research and innovation. The rest is spent on digitalisation, social policy, migration management, Erasmus and security. And all of that with a European administration of just 60,000 civil servants, or 13 per 100,000 inhabitants. In Antwerp, that figure is 1,300 per 100,000. The US federal government employs 3 million people.
Cooperation Pays Off
Still, we can do better. Because a lack of European cooperation is leaving billions on the table. The IMF has found that trade barriers within the EU currently amount to an implicit import tariff of 45% on goods and 110% on services. The cost of this missed potential? Around 1.7 trillion euros per year, or nearly 3,800 euros per European.
Defence is another area where we lag behind. Member states collectively spend nearly 400 billion euros on defence, but do so in a fragmented and inefficient way. According to a recent study, we could save 22%, that’s 88 billion euros annually, if we organised our defence spending at the European level. That’s nearly half the current EU budget.
Investing Without Additional Burden
In the years ahead, we’ll have to do more with less. For starters, we’ll need to repay loans from the COVID recovery fund, amounting to 25 billion euros per year. So the question is: how do we invest in our future while respecting budgetary discipline and without increasing the pressure on citizens?
Citizens expect us to maintain existing spending levels, such as cohesion and agricultural funds. But at the same time, additional investments are needed in defence, innovation, migration, and the energy transition. On the other hand, raising national contributions is politically and financially sensitive, and new EU taxes also face resistance.
The European Trilemma
We are facing a tough dilemma, or rather, a trilemma. Do we cut existing spending? Ask member states for additional funds? Or create new European revenues? None of these choices is easy, but doing nothing is not an option. The world isn’t waiting for “old Europe” to find the time and money for these much-needed investments.
The biggest part of the solution lies in increasing efficiency. By deepening the internal market and tackling strategic core tasks, such as security and the energy transition, at the European level, we can lower the cost for member states.
The Real Choice
Let’s be clear: those who don’t want to free up additional European funds aren’t saying they don’t want to invest. They’re simply saying that each country will have to bear the costs alone. That is more expensive, less efficient, and far more cumbersome.
We shouldn’t fool citizens. As a society, we will invest in our security, competitiveness, climate neutrality, and energy security, one way or another. The choice is simple: do we go it alone again, or do we tackle it together?
As a convinced European, I believe in a collective European response. And even Eurocritics should, at the very least, see the budgetary logic in such an approach today. Greater shared challenges demand shared funding. A collective response to strategic challenges is the only way forward, and that requires proper resources.
When the new European budget is presented, we must remember one thing:
Those who turn their backs on European investment will pay the price alone. And that cost is higher than the price of European solidarity.
Or: what serves the European interest best, also best serves the interest of the national taxpayer.
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