“The big risk is that we don’t have enough money for the green transition,” former Italian Prime Minister Enrico Letta told POLITICO before meeting leaders to present a report on the EU’s competitiveness. He noted that there was little provision for the EU Green Deal after the bloc’s 732 billion euro recovery plan ends in two years.
“Impossible triangle”
This Green Deal, which has been the bloc’s central spending priority for much of the past four years, is now competing for attention – and money.
Ukraine is desperate for more financial and military support from its Western allies as it faces difficulties on the battlefield. With the US aid program stalled in the US Congress and Donald Trump once again endangering America’s security guarantee, pressure is on the EU to strengthen its defense.
But the European Commission, the EU’s executive branch in Brussels, also estimates that by 2030, Europe will need more than 1.5 trillion euros a year just to eliminate fossil fuel emissions from its energy and transportation systems.
Even Europe’s largest economy, Germany, is looking for new sources of revenue to plug budget holes.
“Europe is about to face a kind of impossible triangle,” said Simone Tagliapietra, a senior fellow at the Bruegel think tank in Brussels, who specializes in energy and climate policy. “On the one hand, we want to accelerate the green transition and be competitive, on the other, we want to increase defense spending. And on the other hand, we want to be fiscally conservative.”
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