12. Options for a Permanent EU Sovereign Fund

Abstract

This chapter argues that a new, permanent EU fiscal capacity can contribute to meeting the green-transition challenges and providing countercyclical macroeconomic stabilisation. While the Recovery and Resilience Fund (RRF) is not large enough to address the current challenges, its introduction was an essential step forward in providing an operational blueprint for a permanent EU investment fund. The reform of EU fiscal rules is set to provide insufficient scope for the additional public climate investment required to meet the climate targets. Furthermore, the EU sovereignty fund proposed by the European Commission in the form of the Strategic Technologies for Europe Platform (STEP) adds little new money, focuses on green-tech subsidies instead of public investment, and falls short of providing a realistic vision of meeting public investment