The presence of European and international institutions in Belgium have a significant impact on the economy, especially in Brussels, a recent study by the Free University of Brussels (VUB) shows. According to Belga news agency, roughly 220,000 expatriates live in Belgium and the international environment in Brussels generates up to 20% of the economy of the Brussels-Capital Region and up to 23.2% of regional employment, or more than 162,000 jobs.
More than one in three Brussels residents has a foreign nationality and more than one in five has the nationality of an EU member state. Belga reports that the total impact of international and European institutions and lobbies is estimated at between 8.7 and 13.9 billion euros. This impact is equivalent to about one fifth of the regional economy of the Brussels-Capital Region.
HR firm Mercer’s ‘Cost of Living’ index shows that Brussels is becoming more expensive. At the beginning of 2022, the city moved 16 places upwards on the annual list and now ranks 39th. According to Mercer, the rise is explained by the high inflation and the weakening of the euro against the dollar.
“Living expenses have become significantly more expensive for expatriates and without adjustment of the indexation of their salaries, this will be at the expense of their purchasing power,” Mercer told The Bulletin.
Expats are more likely to reassess whether it is still attractive to work in Brussels under these circumstances.
HR Firm Mercer
The VUB study called “Estimations of the Economic Impacts of International and European Institutions on the Brussels-Capital Region using a local Multiplier Approach” and conducted by Nicola Francesco Dotti, André Spithoven, Walter Ysebaert, states that besides the symbolic political value, the presence European institutions and other international organizations has an economic impact because of their administrative activities and staff remunerations but that estimating the economic impact poses some challenges.
The supranational nature of these organizations makes it challenging to quantify the size of these institutions and related bodies because country-based statistical systems hardly account for transnational organizations. Second, as these institutions and organizations mainly rely on taxpayers’ funding, policymakers need transparent estimates to assess the implications of their decisions as well as for a matter of accountability.
For these purposes, a meticulous data collection was carried out, and transparent assumptions are used to estimate the local economic multiplier effect of these activities accounting for operational expenditures, employees’ consumption as well as (Belgian) taxes and saving. The results show that the economic impact for the Brussels-Capital Region lies between 23% and 26% of regional turnover and 19% and 20% of employment, while inter-regional spillovers are estimated being around 1.5% to 1.7% of regional turnover and 0.6% to 0.7% of employment for both Flemish and Walloon regions.
Of the more than 162,000 jobs created by the international sector in Brussels, 48,909 are direct jobs of staff employed by international institutions, with the main European institutions, agencies and bodies creating 90% of these jobs.
Belga reports that some 21,000 people work for the European Commission, more than 6,700 for the European Parliament, and some 3,000 for the Council of the EU. The European External Action Service (EEAS) has over 1,600 employees and the European Research Executive Agency over 700. A little more than 35,000 of them live in the Brussels-Capital Region, 8,732 in the Flemish Region and 3,963 in the Walloon Region.
