Paul van Gerven

1 September 2020

The Dutch government wants to modernize the European Union, but it doesn’t want to pay the price. The EU’s research budget suffers.

In 2017, a group of experts chaired by former WTO chief Pascal Lamy recommended more than doubling the EU research budget to 160 billion euros to “allow funding of a reasonable proportion of proposals.” A year later, the European Commission proposed 100 billion euros – still a substantial increase over the 77 billion allocated to the running research program, Horizon 2020. The European Parliament, however, deemed 120 billion euros a better number. But as it stands now, the next EU research program, called Horizon Europe, has been allocated a core budget of 75.9 billion euros, boosted by a one-off 5 billion euros from the pandemic recovery fund.

Without a doubt, European leaders had some really big fish to fry at the heated budget summit last July. The budgetary consequences of the UK leaving the Union and the preferred way to soften the economic blow caused by the corona outbreak opened some deep rifts across the continent. Still, it’s disappointing to see research and innovation used as a balancing item.

Painfully, the Dutch government, along with three frugal allies, carries more than a little responsibility for slashing the EU’s research ambitions. These countries had but one priority: pay as little as possible, pressing issues such as the international tech race and climate policy be damned.

In the case of the Netherlands, this shouldn’t have come as a surprise. Gert-Jan Koopman, director-general of the European Commission’s Budget department predicted as much last year. As a guest in the podcast “Betrouwbare bronnen,” Koopman characterized the Dutch government’s approach to the EU budget as “a little schizophrenic.”

Beforehand, it’s all about getting Europe ready for the 21st century: cutting spending for agriculture and cohesion policy in favor of more strategic activities, such as research and innovation and industrial manufacturing. For example, take Finance Secretary Wopke Hoekstra’s Humboldt Speech on Europe, delivered in May last year. “Our continent’s economic engine is stuck in second gear, and we’re investing very little in the economy of the future. Artificial intelligence, big data, nanotechnology and biotech – we’re hardly doing anything in these fields,” Hoekstra warned, arguing for an increase in spending on research and technology development. (Author’s note: I used this quote before as a sign of hope. Please forgive me, I didn’t know what I know now.)

Once at the negotiating table, however, these lofty ambitions get tossed out of the window. This is what happened last time (2014-2020), and it’s what transpired last July. Prime minister Mark Rutte returned to The Hague having secured a lean EU budget and an additional 450 million euro per year discount on Dutch EU membership. Meanwhile, Dutch universities stand to lose 400 million in research grants, according to the president of the Association of Universities in the Netherlands (VSNU).

I mean, I get it. The discount is an easier sell at home. Next year is an election year and the populists are breathing down the necks of the center-right coalition parties. And other European powers aren’t exactly championing modernization either, addicted as they are to the traditional subsidies from Brussels.

Still, Rutte & Friends could have been a little less myopic about the budget size. Europe is already being outspent left and right on R&D. Amid major tectonic shifts in the geopolitical world order, this represents a serious long-term threat to our prosperity. On a total budget of 1.8 trillion euros, another 80 billion to double R&D spending is peanuts.

Fortunately, the numbers aren’t yet final: the European Parliament, which needs to approve the budget, may be able to force some changes to the agreement. Let’s hope European leaders, the frugal ones, in particular, realize the strategic mistake they’ve made in the heat of battle and come to their senses.