In an interview with EURACTIV France, socialist MEP Pierre Larrouturou deplored the meagre €7.5 billion proposed in the European Commission’s Just Transition Fund. To finance EU climate action, he suggests some of the ECB’s “easy money” could fuel the European Investment Bank (EIB) instead of going into private banks.
French Social Democrat MEP Pierre Larrouturou has just been appointed general rapporteur for the 2021 budget, which crystallises tensions between member states and the European Parliament.
The European Commission has just presented its financing plan for the Just Transition Fund, at €7.5 billion. What do you think about it?
One billion per year over seven years, or €7.5 billion, is seriously insufficient. We are heading for disaster if we leave it at that. But what I find interesting is that the European Commission has, for the first time, identified the financing needs.
If we look at the texts published on the Green Deal, we see that the executive estimates the financing needs for the ecological transition at €782 billion. Now that is an honest view of reality.
After the disappointing outcome of the COP25 climate summit in Madrid, is Europe living up to its climate ambitions?
I believe that things can change if we get down to work quickly so that we have a proposal as early as next June, with serious financing for climate policy.
At least Trump is consistent, he says that he has nothing to do with the climate, he does nothing. For Europe, there will be a real challenge at the next COP in Glasgow, where we expect one or two blocs, such as Europe and China, to make a serious commitment.
The Commission is counting on a leverage effect that would make it possible to devote €100 billion to the climate, is that realistic?
What is urgently needed is energy efficiency.
If we want to halve CO2 in 10 years’ time, we need to insulate hundreds of millions of farms, houses and offices. These are not profitable projects. We need subsidies to insulate social housing, so no, the leverage effect that the EIB (European Investment Bank) may have had in the past will not be the same.
That is why it is absolutely essential to find new resources.
How can we find the necessary money when the UK’s withdrawal from the EU is already jeopardising the European budget for 2021-2027?
The European Investment Bank, which has just announced that it is limiting its investment in fossil fuels, will have to double its green investments, which already amounts to more than €16 billion a year.
And the ECB could invest more in the climate. It creates €240 billion each year and invests €100 billion every month.
If we take stock of the policy of monetary easing, or quantitative easing, we see that of the €2,500 billion created since 2015, only 11% has gone into the real economy. The rest has gone to the financial markets, and stock market indices are climbing exponentially.
So, should the ECB continue to trust the banks, or do we have a little doubt? And if so, why not put some of those funds, not in the private banks, but in the climate bank?
The Germans are very sensitive when it comes to the ECB…
We can act without touching the ECB’s statute.
In Germany, Peter Altmeier has found a very interesting solution for financing energy renovation. He has set up a foundation that makes interest-free loans to Germans, which the state guarantees while financing the 2% interest. And because the foundation has been created under private law, it is not included in the calculation of the deficit according to the Maastricht criteria.
Why not do this at the European level?
Are the member states ready to hear about these innovative solutions?
When I raise the subject with ambassadors and ministers, they say: oh yes, it’s interesting!
The issue of financing the climate transition is mobilising people in Europe, from Spain to Poland. Whether it’s a tax on kerosene or on company profits, new resources can be found.
The climate crisis is very severe, and if nothing is done, in two years’ time, those responsible today will be covered in shame.
[Edited by Frédéric Simon]