What the EU must do to compete—and become the leader the world needs

Alexander De Croo became Belgium’s prime minister in October of 2020. It’s a relatively small country, with about 12 million inhabitants—slightly less than the city of Los Angeles—but it’s very much the face of Europe with the European Commission, the Council of the European Union, and NATO all calling Brussels home. Prime Minister De Croo, who saw the country through the COVID pandemic, says that the geopolitical and economic upheavals already being instigated by the “America first” ethos of President Donald Trump will present another stiff test for the leadership of not only his country but the EU. In this episode of HKS PolicyCast with host Ralph Ranalli, De Croo says the key to Europe not just surviving that challenge but also thriving will depend on its ability to raise its level of economic competitiveness significantly in the coming decades. While still a powerful trading bloc, the EU’s economic growth has been slowing since the year 2000 and it’s an also-ran to the US and China in the vital tech sector, with only four of the world’s top 50 tech companies being based in Europe. It’s also facing the challenge of long-term demographic trends—by 2040 the EU’s workforce is projected to shrink by 2 million workers a year. So, as the US retreats from global leadership on fronts ranging from the green energy transition to human rights, De Croo says Europe must make urgent economic policy changes to maintain both its values and its status a leader on the world stage.

Programming note: As this discussion was being recorded, a coalition of five parties—led by the separatist New Flemish Alliance and not including Mr. De Croo’s center-right Open VLD party—agreed to form a new government, effectively ending his tenure as prime minister.

Alexander De Croo’s Policy Recommendations:

• Eliminate excessive corporate reporting systems like CSRD (the Corporate Sustainability Reporting Directive) that add bureaucratic burdens to businesses without improving corporate behavior.
• Implement a non-permanent migration system that allows young people to study in Europe and stay for a set period of time, after which they are required to return to their home countries.
• Maintain Europe's openness to the world while protecting core European interests, and act assertively in areas—trade, climate sustainability, development, diplomacy—where the EU is already a global leader.

Episode Notes:

Alexander De Croo is the outgoing Prime Minister of the Kingdom of Belgium, a post he held beginning in 2020. De Croo has had a long career in politics and business, including numerous ministerial posts. As Minister of Finance, he helped create a framework for a major European recovery package. As Minister of Pensions, he carried out Belgium's first pension reform package in recent history and was involved in setting up a Pension Reform Commission. As Minister of Development Cooperation, Digital Agenda, Telecom and Postal Services, he promoted measures to strengthen human rights, enhance local economic growth in partner countries, and maximize the economic potential of the digital economy. He spent his early career as a businessman and entrepreneur, and in 2006 he founded his own company, Darts-ip, an intellectual property consulting firm that now operates around the world. He started his political career in 2009, running unsuccessfully for a seat in parliament but winning the chairmanship of the center-right Flemish political party, Open Vlaamse Liberalen en Democraten (OpenVLD). He holds an MSc in business engineering from Vrije Universiteit Brussel and an MBA from the Kellogg School of Management at Northwestern University.

Ralph Ranalli of the HKS Office of Communications and Public Affairs is the host, producer, and editor of HKS PolicyCast. A former journalist, public television producer, and entrepreneur, he holds an BA in Political Science from UCLA and an MS in Journalism from Columbia University.

Administrative support for PolicyCast is provided by Lilian Wainaina. Design and graphics support is provided by Laura King and the OCPA Design Team. Social media promotion and support is provided by Catherine Santrock and Natalie Montaner and the OCPA Digital Team. Editorial support is provided by Nora Delaney and Robert O’Neill of the OCPA Editorial Team.