In response to Russia’s war of aggression against Ukraine and the prospect of a diminishing U.S. role in the European security architecture, the European Commission has put forward the ReArm Europe/Readiness 2030 package, which combines temporary exemptions from EU fiscal rules with the creation of a €150 billion loan instrument (SAFE) to bolster defence spending. This discussion paper argues that the proposal has limited fiscal impact and is unable to address the persistent lack of coordination among Member States, as it does not adequately incentivise joint procurement. Instead, the authors suggest to future-proof the EU's fiscal rules and develop an EU grants-mechanism tied to strategic cooperation, greater parliamentary oversight, and a broader concept of security that includes climate and democratic resilience. Finally, the paper also explores how increased defence demand risks fuelling excessive profits and market concentration.
The 2024 re-election of Donald Trump as US president, and the realignment of US security strategy that is expected to follow fundamentally changes Europe’s security outlook. The EU cannot become Europe’s security provider, but it can, through its defence industrial policy, support the funding and organization of the rearmament effort.
Policy coherence can ensure simplification without compromising environmental and social standards. An Omnibus Simplification Package should be used as an opportunity to transform the EU’s legislative framework into an enabling toolbox for businesses transitioning toward competitive sustainability.
The European Union faces the enormous challenge of having to achieve the necessary climate targets it has set itself, while at the same time increasing industrial competitiveness and ensuring public services of general interest. A sustainable European financial architecture based on three pillars is needed to finance these green-social investments at EU level. It is presented in this policy paper.
This publication aims at contributing to the emergence of a transformative economic thinking, integrating environmental, social, and economic dimensions, after the wreckage of neoliberal economic thought that clearly has reached its date of expiry. It is the product of a collaboration of the Heinrich-Böll-Stiftung, the ZOE Institute for Future-Fit Economies, and Finanzwende Recherche.
