Rejecting European Investment Means Bearing the Cost Alone

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