As the EU election nears, key themes for the vote include defense, Ukraine, green transition, and investments. The common thread among these topics is the need for funding. Prime Minister Petteri Orpo has emphasized the importance of securing more European money but opposes using joint debt to finance it. Other alternatives such as utilizing existing funds or increasing EU membership fees present their own set of challenges.
The EU’s annual budget of about 170 billion euros primarily goes towards agricultural and regional subsidies, competitiveness and research, development support, and administration. However, with a proposal to allocate up to 500 billion euros for digital, green and defense projects, there’s a clear need for significant investment. But identifying sources for such a large sum is not without its complications – especially when considering the potential impact on existing budget allocations.
One possible solution could be to increase the EU’s own funds through taxes. But this option is limited in scope given that joint debt has been accepted in certain situations such as supporting Ukraine. However, even substantial sums like 500 billion euros may not be enough to meet the investment needs for climate change mitigation which largely rely on private sources annually. These discussions bring up the critical question: where will the necessary funding ultimately come from in light of evolving EU priorities?
