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A new budget for a new Europe

A new budget for a new Europe

For nearly three decades, the EU budget, and especially sectoral instruments like the Cohesion Policy, have been a proven catalyst in the fight against climate change and the transition to a low-carbon energy system.

By providing public investments in cleaner transport, energy and construction, which are major sources of greenhouse gas emissions in Europe, the next multiannual financial framework (MFF) can shape our response to the challenges posed by climate change.

To ensure that the budget works for the climate and for the people, it should follow the basic principles: climate should be at the forefront of any spending, aimed at achieving the updated 2030 climate and energy objectives; funds should be disbursed in a transparent manner, and should enable the involvement of local actors and communities.

Building back biodiversity

How EU Member States fail to spend the recovery fund for nature

In December 2020, EU leaders agreed on the next long term EU budget, closing more than two years of intense negotiations since the first draft was proposed in May 2018.

The new “Multiannual Financial Framework” (MFF) will consist of an extraordinary EUR 1 074.3 billion, laying out the next spending plans for the 2021 to 2027 period. This budget will be unique, as it will also be used to embed the EU’s recovery fund package, “Next Generation EU”, consisting of a further EUR 750 billion worth of funds and investments in addition to the normal budget.

Together, the MFF and EU recovery package will therefore represent an unprecedented EUR 1.8 trillion.

The EU budget can and should play an important role in protecting the environment and climate, driving sustainable development and leading a low-carbon transformation across central and eastern Europe and beyond.

From Europe’s municipalities to Brussels corridors

With the help of our member groups, our work stretches from local to international level.





EU’s recovery fund

In addition to the €322 billion expected from the 30% climate mainstreaming objective in the MMF, the EU also agreed on a €750 billion stimulus package to respond to the pandemic.

Biodiversity

In May 2020, EU leaders committed to an ambitious Biodiversity Strategy for 2030, outlining the clear need to act on biodiversity loss and address the failing health of nature. 

Just Transition

Working on just transition brings all actors who believe in fair regional redevelopment to the same table: unions, industry, public administration, governments, civil society and others sharing this goal.

EU’s recovery fund

The EU has put forward a very ambitious investment strategy to support the EU green deal. In addition to the €322 Bn expected from the 30% climate mainstreaming objective in the Multiannual Financial Framework, the EU also agreed on a €750 Bn stimulus package to respond to the pandemic. The extraordinary funds now available to Member States through this “NextGenerationEU” mean that the investment decisions made today will have profound and far reaching consequences for decades to come. Now is therefore a crucial time for ensuring the funds and investments are used to their full potential to really drive the transition and deliver on the EU’s climate objectives. 

Once Member States submit their recovery and resilience plans, the focus will turn to the programming of the cohesion funds and programmes. Member States will have to propose Partnership Agreements to the Commission to explain their strategy and investment priorities, as well as presenting a list of Operational Programmes that will outline what will be funded. (see here for a more comprehensive explanation of the EU funds programming process)

Although the new EU budget clearly increases climate and environment ambition, the real challenge will be to ensure that this ambition is properly transposed, implemented and realised as funds start to become available to Member States. In addition to the necessary focus climate, it is also crucial that transparency and monitoring provisions are applied so that the new EU funds create ownership and acceptance from citizens to the energy transformation. 

🇪🇪 Estonia

Estonia is waiting till the last moment to share crucial details from its recovery plan

  • As of mid-April, Estonia had only published brief documents outlining the proposed measures and budget allocation. Without public scrutiny, the ‘plan’ is missing a strategic vision and goals that would bring the proposed measures together. 
  • Proposed investments appear to largely support the green transition. Still, important details remain hidden from the public, and many measures could jeopardise the Green Deal by extending the longevity of polluting sectors or harming the environment.
  • Noticeably absent are investments in biodiversity protection, despite shortcomings in Estonia’s conservation work and earlier recommendations from the European Commission.

🇵🇱 Poland

Poland’s recovery plan is not ambitious enough to reach the EU Green Deal targets

  • In Poland, stakeholders were not able to see the recovery plan until early March. After pressuring the government to open up the planning process, civil society was able to participate in the public hearings and the implementation of the plan.
  • Among the many failures of the Polish plan are measures supporting renewable energy sources, which focus on energy generation from municipal waste instead of onshore wind and solar. The plan’s biggest fault may be its support for fossil gas, which will replace coal.
  • The plan overlooks biodiversity protection and includes support for legal solutions that will prioritise construction over the preservation of protected areas.

See also the Joint position of environmental organizations on the Polish National Recovery Plan

🇸🇰 Slovakia

Slovakia’s recovery plan is mostly climate-friendly, but with dangerous exceptions for gas and highway infrastructure

  • Public participation in Slovakia’s recovery planning was mostly a formal exercise – consultation on the draft plan was not transparent or inclusive in line with the partnership principle. 
  • The plan will direct almost EUR 3 billion for green, climate-friendly investments, but proposed measures will not do enough to help Slovakia reach the necessary targets for decarbonisation and the reduction of greenhouse gas emissions. 
  • The biggest flaws of the Slovak plan are investments in new highway infrastructure and in gas boilers as a solution to energy poverty. 

🇷🇴 Romania

Romania’s recovery plan misses opportunities for decarbonising electricity production

  • In Romania, public consultations on the recovery plan took place, but the final draft didn’t provide any information on how the collected suggestions and proposals were integrated.
  • The plan does not specify any milestones, targets or implementation calendars for the proposed investments and reforms. The proposed measures lack a detailed assessment of compliance with the ‘do no significant harm’ principle.
  • The decarbonisation of the energy sector is jeopardised by the allocation of a significant amount of funds for fossil fuel investments, specifically the expansion of gas infrastructure and its adaptation for hydrogen.

🇱🇻 Latvia

Latvia forgets about biodiversity and sets low energy efficiency targets

  • The drafting process for Latvia’s recovery and resilience plan has not been transparent and has failed to involve all stakeholders in meaningful consultations. 
  • Latvia’s recovery and resilience plan contains many green and necessary measures, but lacks strategic vision. The plan’s proposals could do more to implement the reforms needed for the energy efficiency measures to have an impact, and support for renewable energy could be more ambitious.
  • The plan includes measures that pose a high risk to biodiversity, such as the irrigation of wetlands, support for commercial forestry and reducing space for protected habitats.

🇨🇿 Czech Republic

Czechia’s plan has significantly improved thanks to pressure from civil society, but still misses the mark

  • The drafting of the Czech recovery plan has largely been behind closed doors. CSOs were not sufficiently involved and the plan was not made publicly available until the end of March. Still, thanks to pressure from civil society, several harmful investments were taken out of the plan.
  • The Czech recovery plan has a clear focus on energy efficiency in buildings, transportation and the digitalisation agenda. However, there is almost no focus on more complex environmental questions (e.g. biodiversity, habitats, ecosystems, soil, etc.).
  • Despite strong decarbonisation measures, the current version of the recovery plan will not help Czechia reach a zero-carbon economy by 2050, as it is based on outdated strategic documents and does not propose any significant improvements.

🇭🇺 Hungary

Hungary’s recovery plan is based on outdated targets and threatens to lock in fossil fuels and nuclear

  • Hungary’s plan does not make a clear commitment to a fossil fuel phase-out. Although it aims to enable decarbonisation through the widespread use of renewables and electricity, some measures in sectors like energy and transport will indirectly increase emissions.
  • The preparation of the plan lacked a clear, publicly-available timeline for public consultation.
  • Only 0.1 per cent of the budget is planned for measures focused on biodiversity, and some measures (such as a proposed water management project) could be harmful for habitats.

🇧🇬 Bulgaria

Bulgaria’s recovery plan leans toward fossil fuels with no vision for energy transformation

  • The preparation of Bulgaria’s recovery plan lacked transparency and public dialogue. Organisations and experts who submitted suggestions for improvement to the plan’s measures haven’t received any feedback.
  • The plan includes support for fossil fuels and does not present a coherent strategy for energy transformation. Support for natural gas, coal and oil might prevent Bulgaria from achieving a decarbonised economy.
  • The plan overlooks biodiversity protection and allocates a considerable amount of funds for the rehabilitation of an irrigation system that could destroy wetlands.

Biodiversity

In May 2020, EU leaders committed to an ambitious Biodiversity Strategy for 2030, outlining the clear need to act on biodiversity loss and address the failing health of nature. 

The EU recovery funds represent a golden opportunity to achieve this by ensuring that Member States increase biodiversity spending, invest in transformative green projects and reforms and set in motion the ecological transformation of our economies

Yet so far, biodiversity is being completely neglected within the EU’s recovery package. Member States and failing to properly incorporate such measures into this crucial funding stream, with almost measures currently proposed in the draft national recovery plans to address biodiversity and nature conservation.

Bankwatch have therefore recently launched our latest campaign to ensure that biodiversity and nature conservation become a key part of the recovery. Working at both the EU and in 6 Member States, we will ensure that EU recovery funds dedicate a sufficient share towards biodiversity spending, as well as ensuring no harmful projects are supported. We will further work to shift the narrative at both EU and national level so that biodiversity and nature conservation issues are placed into the spotlight, so as to establish a longer term approach that sets the necessary pathways leading to 2030 and beyond.

When Nature Shows the Way:
Supporting biodiversity for Europe’s green recovery

Biodiversity loss and climate change are the biggest environmental threats we face today. To address such crises, the EU has set in place a series of climate and environmental objectives as part of the European Green Deal. However, in order to achieve these objectives, significant increases in funding and investments are needed in the next decade.

Find out more
Picture: Fabian Wiktor/Unsplash

Just Transition

Governments across Europe have started preparing plans for how to spend EU Budget money for the transition of coal regions. In some countries in central and eastern Europe, however, the ideas and needs of workers and locals in the regions themselves are not sufficiently taken into account. Bankwatch is actively working on supporting the inhabitants of those regions to get involved in building their own futures while at the same time putting pressure on national governments to give a priority to those voices. 

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