Reality check Spend more on Europe or risk the consequences

Unless European leaders go cold turkey on farming and infrastructure subsidies, Germany and other rich countries will have to spend more for Brussels to protect its borders and boost innovation.
Spend more to avoid crises recurring.

Once upon a time there was a continent that had no enemies. Its neighbors behaved peacefully, which was why the continent didn't need an army. Its external borders were respected, which was why it didn't need to protect them. And when a war did break out in its neighborhood, the continent called upon its powerful friend beyond the great sea to help, and the powerful friend set things right again. The continent flourished and prospered like no other, its prosperity unrivalled all over the world.

Europe may indeed have been such a fabulously beautiful place once upon a time - at least in our transfigured memory. But that dream is now over and has given way to a brutal reality. There is war in Europe's immediate vicinity. Bombs are falling in Syria, and there's gunfire in Eastern Ukraine. Hostile autocrats Vladimir Putin and Recep Tayyip Erdogan threaten the EU, sometimes openly and sometimes covertly. Europe can no longer count on the United States as a protective power. Political refugees and economic migrants are pushing across poorly secured borders. Rising world power China has already outpaced Europe economically. Europeans can only keep up in the long term if they are able to survive the digital revolution in reasonably good health, which is far from a foregone conclusion.

For the first time in half a century, peace and prosperity in Europe are in serious jeopardy once again. Most European Union leaders are well aware of this. Last week in the Bundestag, the German parliament, Chancellor Angela Merkel was completely justified in calling for the EU to set new political priorities and adjust its finances accordingly. One thing is already clear: It won't be getting cheaper. On the contrary, the Germans must be prepared to pay more to Brussels in the future.

The EU could meet all of its new challenges without spending a single euro more: by cutting farming and infrastructure subsidies.

Europe's political response to war, migration, cyber war and the internet of things and artificial intelligence is not free. The protection of the EU's external border is a case in point. The border's most sensitive points are in Greece and Italy. The EU still provides the two countries with almost no support in the logistically complex task of sealing off thousands of kilometers of sea border. The new EU border protection agency Frontex doesn't have enough staff to provide effective assistance. The next wave of refugees is bound to arrive at some point, and when it does, it will inevitably wash up to Northern Europe when Italian and Greek customs officers are unable to stop it.

This is why Germany, the Netherlands, Sweden and others are demanding that the EU develop Frontex into a fully operational border guard. It will be expensive. The EU Commission estimates the costs over the next seven-year budget period to be €150 billion ($184 billion).

In addition, there are billions of euros in development aid for refugees' countries of origin and for the care of migrants in overburdened countries such as Greece. The EU defense union, which has already been decided upon, is also not free of charge. At the Munich Security Conference, it became clear that the United States is abandoning its global political responsibility. The Europeans have now been forewarned that they must protect themselves in the future and invest more in shared weapons systems.

Cyber war, artificial intelligence and the rise of cloud computing force the EU to spend more on research and innovation if it wants to keep pace with developments in the US and Asia. Research funding plays only a marginal role in the current EU financial framework. If the European Union continues along this path, the time will come when it will no longer be represented in the G20 group of the world's leading industrialized and emerging economies.

Theoretically, the EU could meet all of its new challenges without spending a single euro more. It could even cope with the loss of the United Kingdom as a net contributor without compensation. To do so, it would only have to make a radical cut in spending that has made up the lion's share of the EU budget so far: Agricultural subsidies and the investment funds to build highways, bridges and schools.

There is potential for savings. Wealthy grain farmers in Picardy don't need help from the EU to buy luxury cars. Bavaria can survive without collecting EU subsidies for bike paths. In the future, the EU no longer has to pay for port facilities that never unload cargo. And after three decades, it could finally stop throwing millions into a bottomless barrel called Sicily, Italy’s largest island and an economically weak region.

In an ideal world, the EU would finally put an end to this waste once the British net contribution has been eliminated. Of course, this is only possible if France, Germany and others renounce the funding from Brussels. So far, only one European leader has offered to do so: Dutch Prime Minister Mark Rutte. Those who do not want to cut back on such spending will have to cough up more for new items in the EU budget, trading fairy tales for mathematics.

Ruth Berschens heads Handelsblatt's Brussels office, leading coverage of European policy. To contact the author: [email protected]