One of the most recurring and evoked images of the European Union is that of the bicycle: it has to pedal in order not to fall, in the sense that it would be fatal to stop the process of progressive integration. One may or may not share this vision and argue that the construction of Europe, even if it stops, is now such a ingrained and solid reality that there is no need to worry about its future. But one thing is certain: if Europe stands still, it will pay its price. And also very high. More precisely: 2,800 billion euros per year from 2032. Starting from the question “What does non-Europe cost?”, the European Parliamentary Research Service analyzed and quantified the potential benefits that could be achieved if the EU better exploited existing ones resources and, above all, new common policies and thus to provide uniform answers to similar problems. According to the study, Europe has three scenarios ahead of it for the next decade. let’s see her
status quo
If things stayed as they are, that is, if common policies did not change and everything continued as it is today, the EU’s aggregate GDP would go from about 15 trillion euros in 2022 to about 17 trillion in 2022 Year 2032 increase, at a compound annual growth rate of 1.3%.
fragmentation
Faced with a new economic crisis – which the storm of inflation, the crisis in the banking system and the continuation of the war in Ukraine certainly do not rule out – the countries reacted in no particular order, but with national and different responses, the study calculates that it was between ten years would give a real net loss of 2.052 billion euros of GDP.
Relaunch of a joint action
With the introduction of new common policies in 50 strategic sectors, Europe’s GDP would increase from 15 trillion today to 19.8 trillion in 2032, 2.8 trillion more than in the status quo scenario, with an average annual growth rate of 2.9%. Of course, not all policies would be implemented at the same time and this figure would therefore be reached through successive approximations, but that would ultimately be the lasting benefit of greater integration. Of course, future benefits would not replace or challenge, but rather complement and reinforce, those resulting from individual Member States’ policies at national, regional and local level.
What must be done to achieve this result?
There is immense potential in the transport sector: we don’t travel at the same speed today. For example, when a freight train travels from one country to another, it encounters often insurmountable bottlenecks and obstacles: the tracks can be wider (as in the Baltic countries and most eastern countries) or narrower (in areas of Spain). or the network is old and slow (like in southern Italy). In all these cases, the transport must be by road. Essentially, there would be benefits from investing in interconnectors, creating the European Rail Traffic Management System (ERTMS) as the only signaling system used in the global Ten-T network, and completing the internal market for goods and services by removing remaining barriers within 10 years lead corresponds to 507 billion euros.
The domestic market
There are still too many distortions in the internal market. If companies continue to compete not on the quality of products or services, but on the basis of the tax breaks offered by this or that country, it will never be efficient. Harmonizing the perks and making e-invoicing compulsory for all member countries would generate 94 billion additional European GDP. And then there is the income tax gap for companies that operate in more than one Member State (today they are taxed there the lowest because of their profits): the EU should create common rules for these companies and strengthen the exchange of information between tax administrations. This would also lead to a reduction in bureaucracy and compliance costs.
Economic and Monetary Union
Completing the Economic and Banking Union is the EU’s other major unfinished business. First and foremost, it is about better coordinating the budgetary policies of the member states and creating a European treasury; Introduction of the European deposit insurance system. In addition, there is a need to diversify Union funding sources to support risk and innovation; development of common financial centers; strengthen existing instruments or create new ones to mitigate the risks of unemployment according to the Sure model; Adoption rules that can ensure greater transparency and control of digital finance. These measures would, among other things, facilitate solidarity between member countries and guarantee a level playing field that prevents isolated measures, poorly coordinated budgetary policies or opportunistic behavior. They could generate 321 billion euros in additional GDP by 2032.
energy transition
The Union has set itself the goal of achieving climate neutrality by 2050. To reduce energy use, we all need to do the same thing: phase out fossil fuels, improve energy efficiency, and simplify the process of expanding renewable energy. Collective technological investment would bring environmental benefits and job creation worth $420 billion over the decade. Other proposed measures include creating a system to prevent products and raw materials from deforested areas from being placed on the EU market and setting carbon prices, the proceeds of which could be redistributed to the most vulnerable to mitigate negative social impacts of the green transition.
digital development
The digitization of small and medium-sized enterprises, common rules for workers of digital platforms (e.g. Uber drivers and drivers who have no protection today) and robust protection of data and confidentiality of communications would add value of 327 billion euros.
health policy
The Covid years have shown the need for a common health policy, which today instead falls under the competence of the Member States. The creation of an EU fund to improve hospital facilities, buy equipment and medicines together, and new rules for more transparency in pricing would result in an increased profit of at least 34 billion.
Common Defense
As for European defence, Russia’s war of aggression in Ukraine has brought the issue of its absence back into the news. “And yet – recalls Lauro Panella Panella, head of the European Parliamentary Research Service’s Value Added Analysis Unit – if we add up the current military spending of the 27 countries, it would be almost the same as China’s, only second to that of the United States”. But EU defense spending is fragmented, poorly and poorly coordinated, with sporadic collaboration marked by duplication, incapable of economies of scale. An example for all, the 14 different tank models that are made in Europe. Greater defense budget integration would instead result not only in savings and efficiencies in the form of reduced administrative costs and duplication, but also in a strong R&D push, which then acts as a driving force (as in the US) for civilian applications . In this sector alone, revenues could be between 24 and 75 billion per year.
corruption
Investing in a country where the judiciary is not working well has enormous costs. Strengthening the fight against corruption by strengthening the European legal framework and tightening transparency requirements for public procurement in the EU would generate almost 140 billion euros. We must also step up police and judicial cooperation and improve European measures to confiscate the proceeds and assets of criminal persons and organisations.
Minimum wage and legal immigration
One of the great successes of the European Union was the Structural Funds, which were the driving force behind the growth of Spain and Portugal and later countries like Poland, Hungary and the Baltic States. Increasing the budget in favor of less developed areas, tackling poverty and inequalities by raising the minimum wage and creating common routes for legal immigration would result in an added value of 356 billion. “The benefits – the study explains – would come from increased employment, improved wages and working conditions, translated into a larger tax base, more efficient allocation of human capital and better integration of mobile workers and third-country nationals”. In addition, the free movement of workers should be further facilitated, for example through the recognition of professional qualifications or through the harmonization of the social security systems.
International cooperation
In reality, there is much more at stake on the foreign action front. By promoting sustainable trade, strengthening common diplomatic missions and consular protection for EU citizens, not least by coordinating development policies towards a more effective partnership while avoiding overlaps and duplication of action by individual Member States, by 145 billion euros in benefits achieved annually in 2032 .
knowledge development
Jean Monnet, one of the founding fathers of Europe, once said, “If I could go back, I would start culture over again. The study proposes the extension of the Erasmus+ programme, which, for example, allows European students to attend an EU university for a semester (valid for the course) and extends it to people of different ages and backgrounds. Also a stronger EU-funded research program in the energy and environment sectors, more funding for culture, a package of measures to promote media freedom and pluralism. These measures alone could bring benefits of almost 70 billion euros per year, creating income and jobs, spreading knowledge, strengthening social cohesion and promoting cultural creativity.
The model for the future
The strength of the European Union was demonstrated during the pandemic crisis, when acting together ensured vaccines at reasonable prices for all of its states. For the first time, a fund (Sure) has been set up with 100 billion European debt at very low interest rates, which will be lent to member states to pay for redundancies. And finally, thanks to Next Generation EU, it ushered in the green transition by putting Europe back on the path of growth and sustainable development. Expanding this model would lead to a more efficient, stronger and more prosperous Europe.