Experts are certain: EU does not have enough money for green transition

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Experts predict that the annual investment gap for the two transitions will total at least 481 billion euros by 2030, according to a report published on Wednesday. Closing this gap depends on the efficient use of public resources and the mobilization of private investments.

Experts generally believe that more sustained investment is needed for change. Existing investment programs were irregular and limited in time; There were different funding sources and overlapping goals. Experts advocate creating a fund for strategic investments as a solution.

“We propose the establishment of a dedicated and permanent fund for European Strategic Investments (ESI),” the authors say. This could initially be financed from the long-term EU budget. The multi-annual EU community budget between 2021 and 2027 is around 1.1 trillion euros.

According to experts, such a fund should be managed by the European Investment Bank (EIB). The EIB is the EU’s long-term financing institution. They are owned by Member States. The bank aims to finance investments that will contribute to the achievement of the EU’s political goals.

Additionally, the EU needs to create additional own funds in addition to existing funding sources or otherwise generate revenue for the EU budget. This is necessary to repay loans taken for the corona relief fund. Additional new equity funds can then be used for ESI funding. “This will ensure continuity in achieving strategic goals,” the authors say.

For the Corona relief fund (“NextGenerationEU”) worth around 750 billion euros, the EU for the first time assumed very large sums as a joint debt and gave the debt-financed money as grants to EU countries. The aim of the money is to stimulate growth and employment, but also to make the European economy more modern and environmentally friendly. The program expires in 2026.

Further possible joint borrowing is controversial in the international community. French President Emmanuel Macron recently expressed that he is open to this issue. “We need more public investment in Europe. That’s why we need to start a new phase of reinvestment, just as we did in the Covid crisis, and perhaps go back to Eurobonds for priorities.” said Macron at the World Economic Forum in Davos last week.

Eurobonds are European government bonds. States raise money together in international financial markets and are jointly responsible. (SDA)

Source :Blick