Europe is facing a pivotal moment as it navigates a complex global environment and structural changes reshaping its economies. The challenges are significant, including demographic aging, geopolitical tensions, increased defense spending, energy security, and the clean energy transition. Addressing these issues requires a concerted effort to enhance productivity and resilience.
A key strategy involves completing the single market alongside national reforms to enable European firms to grow. This dual approach promises benefits greater than individual efforts could achieve. The EU budget plays a crucial role in this process by supporting the provision of European public goods and incentivizing national reforms.
The Multiannual Financial Framework (MFF) has been instrumental in supporting economic convergence through cohesion policy and aiding recovery from the pandemic with the NextGenerationEU package. However, future challenges necessitate a comprehensive overhaul of the MFF to remain effective.
Three critical areas for improvement have been identified:
1. **Ambitious Budget for Public Goods**: The MFF must prioritize areas where EU action can deliver maximum value by generating positive spillovers and leveraging economies of scale. Investments in energy security, defense capabilities, research, and innovation are essential. Increasing expenditures on European public goods from 0.4% to at least 0.9% of GNI is recommended without reducing allocations to existing programs.
2. **Performance-Based and Adaptable Framework**: A stronger focus on performance linking financial support to outcomes can improve EU spending effectiveness. Simplifying budgetary programs into thematic clusters organized around key priorities would streamline operations while maintaining flexibility to respond to evolving circumstances.
3. **Strengthened Financing Framework**: An enhanced financial capacity is necessary for an ambitious EU budget. Expanding financing models to include borrowing and robust own resources will support investment in European public goods without delay while ensuring long-term sustainability through solid revenue sources.
In conclusion, addressing Europe's complex challenges requires an impactful EU budget capable of scaling up ambition and delivering shared priorities for growth, resilience, and sovereignty.
"Meeting Europe’s complex challenges requires a more impactful EU budget," stated the speaker at the discussion on May 20, 2025.