Commission warns of Green Deal failure if Transition Fund not well financed

European Parliament plenary session's debate on the extraordinary European Council meeting of 20 February 2020 on the Multiannual Financial Framework. [European Parliament]

European Commission President Ursula von der Leyen warned on Wednesday (12 February) that the  European Green Deal would fail if member states declined to provide the necessary funds to workers and regions affected by the climate transition.

Addressing the European Parliament’s plenary session, von der Leyen defended an ambitious multiannual financial framework (MFF) to finance the EU’s traditional policies, including Cohesion and farming, and new priorities, such as the digital transformation or defence.

The Commission chief put special emphasis on the Green Deal, described as Europe’s new growth strategy.

She told MEPs that she would “not accept” any result that does not guarantee at least 25% of the budget devoted to the fight against global warming and to proper funding of a just transition for regions and workers.

Poland, Germany get largest slices of Just Transition Fund

The European Commission’s €7.5-billion-strong Just Transition Fund (JTF) is set to allocate €2 billion to Poland and €877 million to Germany under a proposal sent to national governments on Wednesday (15 January).

The Commission proposed the Just Transition Fund to support regions and workers affected by the transition toward a more sustainable and less polluting economy.

As part of its Green Deal, Europe aims to become the first region in the planet that cuts its net CO2 emission to zero by 2050.

Von der Leyen warned that “if we do not set aside the funds necessary to support regions and workers who are most exposed to the economic consequences of climate change, we will simply fail to achieve a climate-neutral Europe.”

Her warnings came ahead of the European Council on 20 February, where EU leaders will try to narrow their differences over the MFF, the EU’s long-term budget, for the 2021-27 period.

Member states remain entrenched in their positions regarding the overall size of the budget and the priorities that will need to be financed.

EU sources and diplomats have told EURACTIV that the discussion among the capitals is close to a ceiling of around €1,087 billion in 2018 constant prices (1.07% of Europe’s GNI), as initially proposed by Finland during its rotating presidency of the EU.

But European sources said that European Council President Charles Michel has not yet taken a decision about what proposal he would table at next week’s summit.

The divisions run so deep among the capitals that the sources consulted don’t expect an agreement next week.

An EU official said that the possibility of organising an extraordinary summit in April has already been floated by some.

A group of 17 countries, labelled as the “Friends of Cohesion”, are trying to counter the significant cuts that net contributors to the budget, including Austria, the Netherlands, Sweden and Denmark (“The Frugal Four”), want to enforce to reduce the budget to 1% of the European GNI.

The battle of numbers that will shape EU’s future

It might not be the sexiest debate but how the EU will look in the next seven years will depend on the outcome of one of the toughest upcoming fights in 2020: the negotiation over the bloc’s next long-term budget. 

Von der Leyen urged everyone to reach a deal “in the near future” and told member states that they “must be ready to find common ground” and strike the right balance between the old and new priorities.

“Citizens will not understand if decision-makers fail to make the funding available for policies needed,” she added.

A large majority of MEPs sided with the Commission boss’s call for an ambitious budget to finance the long list of European priorities.

The Parliament’s proposal for the MFF was already higher than the Commission’s draft plan. The EU executive proposed to dedicate 1.11% of Europe’s GNI while the MEPs have already requested around 1.3%.

[Edited by Zoran Radosavljevic]

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