Beyond the obvious: Wieder am falschen Hebel gezogen

Europa needs more growth, a fact acknowledged by the EU Commission. In its 2026 State-of-the-Union speech, Commission President Ursula von der Leyen emphasized completing the single market, reducing bureaucracy, and favorable energy prices for increased competitiveness. However, the implementation reveals Brussels once again choosing the wrong levers.

The goal is a union achieved through central control and increased Brussels bureaucracy, aiming for strategic autonomy and better competitive positions. This is a bold "business as usual," accompanied by a request for a 60% larger EU budget. What Europe truly requires are genuine reforms to boost productivity across all sectors: deregulation, labor market flexibility, deeper capital markets, functioning education, competitive energy prices, and significantly less bureaucracy.

Instead, the 2028-2034 Multiannual Financial Framework is supposed to amount to nearly two trillion euros. The most potent lever for greater prosperity in the EU is not money, more bureaucracy, or more officials; it's the implicit hurdles within the EU single market. The IMF and ECB estimate these hurdles amount to interest rates of about 44 to 67%.

A recent analysis of five decades of European and American productivity growth shows Europe has been losing productivity since the mid-90s and now only reaches 86% of the US level. The cause is too many workers moving from productive sectors to less productive ones. This loss of wealth over the decades is becoming increasingly evident.

In an interview with Daniel Stelter, Dr. João Duarte, a professor at Nova School of Business and Economics in Lisbon and one of the authors of the productivity study, explains what needs to be done.