European Commissioner for Internal Market, Thierry Breton, hopes that the future ‘European Sovereignty Fund’ will have “the right budgetary means to be credible” in an article published on LinkedIn on Thursday 15 September. He proposes financing through debt, as with NextGenerationEU.
“In my view, the future Sovereignty Fund must be granted with the right budgetary means to be credible”, he writes about the fund announced by Ursula von der Leyen yesterday during her annual State of the Union address at the European Parliament (see EUROPE 13021/5). “Its design should allow for direct, fast and flexible budgetary support to well-identified projects of interest for EU sovereignty across any sector of our industrial spectrum”, he advocates.
This fund could be used to address critical dependencies and to complement specific industrial projects supported by important projects of common European interest (IPCEI), according to the Commissioner.
It should also play an important role in preserving the integrity of the single market “by collectivising” investments, while maintaining a level playing field between Member States that do not have the same fiscal flexibility, he continued.
He proposes “consider[ing] the possibility” of financing this fund through common debt, “like we successfully did with NextGenerationEU”. He believes inspiration must be drawn from the US’ boldness and determination, citing the Buy American Act, the US Chips Act, the Defence Production Act and the Inflation Reduction Act.
Contacted by Europe, Valérie Hayer (Renew Europe, French) welcomed this fund, which she has been calling for since the spring. In the MEP’s view, this fund should be financed by “peace bonds”, using the same principle as NextGenerationEU, she said. “As the budget currently stands, it is clear that this is the only way to get consistent funding that does not lead to cuts in other traditional EU budget programmes. We need to already be thinking about financing, which can only be done through new own resources. (...) In particular, it is time to put the financial transaction tax back on the table”.
Asked about the possibility of using the cohesion policy, the MEP said it was not the “right” solution. “States will be opposed to their funds being drained further by large amounts after the various redeployments they have already undergone”. In any case, this fund will have to be integrated into the Multiannual Financial Framework so it can be monitored by the European Parliament. “But this means that this framework will be need to be revised in order to increase it!”
Another EU source indicates that the mid-term review of the Multiannual Financial Framework is on the list of legislative initiatives for 2023. “I believe the proposal for this fund would happen within this framework”, she told EUROPE. (Original version in French by Pascal Hansens)