A new course for Europe
At the beginning of the year, the European Commission took a significant step towards a restructuring of its economic policy. The new plan, known as the “compass of competitiveness”, has focused on the need to reduce the regulation of the European green pact, an initiative that seeks to combat climate change.
An unprecedented investment plan
Only two months later, the Commission announced an ambitious defense plan valued at € 800 billion. This fund injection will include loans of € 150 billion for defense, while the remaining 650 billion will be funded by the Member States. In addition, it will be promoted that these expenses will not be incorporated into the official deficit of the countries.
The reality of the deficit
However, this approach has a significant dilemma: for international markets, the deficit resulting from defense expenses will remain a real load, causing an increase in debt costs. This could result in serious repercussions for the finances of European states, especially in countries with a high debt.
A strategy in doubt
This strategy, reminiscent of the proposals of the German politician Friedrich Merz, could lead to the costs that are unsustainable if the states decide to adopt it. The uncertainty about its effective application, especially in places like Spain, adds a layer of complexity to the situation.
A viable alternative
However, there is a solution that could allow Europe to advance its investment in defense without increasing the public deficit. This proposal is to substantially reduce investment in the Green Deal and redirect the remaining funds towards technological innovation.
Climate Budget Review
According to the Danish political scientist Bjorn Lomborg, the European Union allocates between 20% and 33% of its budget for climate policies. Only last year, the EU invested 367 billion euros in sustainable products, mostly from China, which raises doubts about the viability of this model.
Impact and competitiveness
Lomborg emphasizes that Europe has already significantly contributed to the mitigation of climate change, but continuing with an overly subsidized energy transition has little impact on global temperature. In fact, the projections suggest that if the EU reduced its emissions to zero, the result would be an imperceptible decrease of only 0.017 degrees Celsius by 2050.
A sustainable future
Current climate spending policy is not only minimally justified due to its effect on global warming, but also damages the competitiveness of European economies, especially affecting the middle and working classes. Lomborg proposes a double solution: to reduce the spending on green transition and invest in innovation and defense, thus creating a balanced and sustainable approach.
