MADRID – The complex global geopolitical context following the return to power of US President Donald Trump calls for “a more ambitious and bolder European budget” of “at least” 2% of annual GDP, Pedro Sánchez’s government said in a statement on Monday.
Pedro Sánchez’s governing coalition (PSOE/S&D, Sumar) has drawn up a strategic document urging the EU to multiply–at least–by two times the budget to better face Trump’s ‘trade war’ and its defence challenges, among others.
Specifically, Sánchez wants the EU to increase its spending “at least to an annual amount of 2% of GDP”, which is double the Union’s ordinary budget, according to RTVE and El País.
According to Spanish media, Sánchez could soon present his particular ‘European Compass’ to the EU executive and his partners in Brussels.
Madrid’s objective is to strengthen European resilience in the face of the harsh measures announced by Trump, which, among others, include tariffs of 25 per cent on all steel and aluminium imports, which also affect the sector in the EU.
One of Madrid’s objectives is to increase the EU’s competitiveness vis-à-vis, among others, China and the United States to better face the challenge of the ecological and digital transitions.
“Security and defence, but also the fight against climate change, energy interconnections, technological development and scientific programmes are European issues and, as such, require European funding. The reports by (Mario) Draghi and (Enrico) Letta have already pointed in this direction”, the statement reads.
The Draghi report, presented by former European Central Bank president Mario Draghi last September, warns that the EU will need an extensive increase in investment to digitise and decarbonise the economy and increase its defence capacity to € 800 billion a year if it is to remain competitive with Washington and Beijing.
On the other hand, Madrid points out that another strategic sector – defence – also needs more spending, and not only in relation to direct military threats, including the war in Ukraine, but also to new challenges to European security.
“European security is not only about military threats. It is also cyber-attacks, climate change, terrorism and the fight against mafias and drug trafficking. These aspects require other types of interventions and resources that are not military”, Sánchez’s government points out.
Spain currently spends 1.8 per cent of its GDP on defence and has committed to reaching 2 per cent by 2029. However, this is still a long way from the 5 percent that Trump is demanding from NATO allies.
Joint debt financing
To try to achieve the objectives proposed in the document, Spain suggests the creation of a “joint debt mechanism”, and asks that the debt of the European Next Generation funds be refinanced for another 10 years to continue making “major investments”, according to the text of the communiqué quoted by the media.
The European bloc is expected to begin negotiations on the 2028-2034 multiannual budget shortly, and it is precisely at this time that Spain – whose economy is growing above the Eurozone average – wants to exert its influence to increase the bloc’s financial endowment.
Madrid’s proposal is likely to be rejected by the so-called ‘frugal’ EU countries, including the Netherlands, Austria, Denmark and Sweden, which have on several occasions made clear their disagreement with increased EU spending being financed by common debt and instead propose, among other measures, cuts in social policies.
(Fernando Heller | Euractiv.es)
We give you energy news and help invest in energy projects too, click here to learn more
Crude Oil, LNG, Jet Fuel price quote
ENB Top News
ENB
Energy Dashboard
ENB Podcast
ENB Substack
Energy News Beat