podcasts | Macro with Boot and Mujagić | ‘EU countries waste money aimlessly and don’t have it’
This means an average of 300 euros per person per EU resident. “That’s a lot of money and money down the drain, which all those EU countries don’t really have.” Despite the cash toss, it’s of little use to the economy, Mujagic says. The European Commissioner himself shared last week the economic forecasts for next year. Economies will barely grow to nothing, while all governments are also deep in the red. Money that isn’t there is thrown away, which is a real shame. After all, it’s a lot of money.’
Mujagic then says governments have been warned about this. ‘Long before all these measures were announced, the International Monetary Fund (IMF) calculated a few things. So the IMF said that if governments focus on fully compensating 40% of low-income people, the cost would be 0.9% of the total economy. It’s a lot less than what is currently being spent.”
The Netherlands is also guilty of money laundering
Mujagic sees the same problem in the Netherlands. ‘If the Netherlands had followed the IMF method, the costs would have been around EUR 7 billion. We don’t know what it is now. But there is a good chance that it will exceed twenty billion euros. So you’re throwing 13 or 14 billion, maybe more. That’s around 1000 euros per person in the Netherlands.’
The economist also sees this as a recurring problem in the Dutch government, where money is handled out of control. “You can also break through that. I have a feeling that so much support has been chosen not to get into trouble with certain groups that are not helped. Then there is also a government in the Netherlands where one of the four parties leans to the left and another to the right. They all want to do something for the people who voted for them.’