As you, my esteemed readers, have undoubtedly noticed, the European Union’s position as one of the world’s leading economic regions has eroded over the past two decades. This is illustrated by the chart below, which shows the development of gross domestic product (GDP).
One clear reason for this unfavourable trend is the steadily growing — indeed, quite explosive — proliferation of well-intentioned but highly diverse regulatory requirements, namely EU directives. As a researcher, I have even experienced firsthand how they form a kind of regulatory web that effectively prevents publicly funded scientific knowledge from being translated into technological solutions for businesses and drivers of economic growth in the EU.
This has naturally contributed significantly to the EU falling behind both the United States and China in technological and economic development. This is clearly illustrated, for example, by patent application figures. While the Chinese have filed 1.4 million patent applications so far this year, the Americans 262,000, the Japanese 222,000 and even the South Koreans 186,000, the three major EU countries of Germany, France and Italy have filed just over 60,000 applications combined.
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In this respect, it is encouraging that a number of northern member states are seeking to cut the funding allocated to the EU’s central administration, whose bureaucratic inertia spreads into virtually every corner of the Union. That is why I noted with satisfaction a brief news report stating that Finnish Prime Minister Petteri Orpo (National Coalition Party) had announced that Finland could not accept Ireland’s proposal to reduce the EU budget by a mere €140 billion.
According to Orpo, “some savings have been identified, but far too few, and in some cases in the wrong areas.” By the latter, he was referring to budget cuts affecting defence, research and new technologies. In other words, the cuts are being directed at the very areas of expenditure that are most important for the EU’s future, rather than at socialist-style spending, such as cohesion funds intended to reduce disparities between different regions of the Union.
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It remains to be seen, however, what the EU’s administrative machinery will ultimately decide. Germany, the Netherlands, Austria, Sweden and Denmark share Finland’s position, but opposition is particularly strong in Southern and Eastern Europe, whose countries benefit from and advocate for cohesion funding — funding that, in many respects, resembles development aid.
Some kind of resolution may be reached at next week’s summit in Brussels. We should hardly expect miracles, however, since all political systems seem to have an unfortunate tendency to expand bureaucracy and endlessly quibble over details rather than trust in the creative power of the market’s invisible hand.
Previous thoughts on the same topic:
EU Carbon Sink Policy Lacks Cost-Effectiveness
Polish Politics: A Quiet Success Story
A New Beginning: Economic Independence in the Hands of Developing Nations

