“The EU’s Economic Reform compromise is a death sentence for the just transformation of Europe. The compromise focuses exclusively on how fast and deep national debt and deficit need to diminish, paying zero attention to ensuring national investments and reforms serve EU climate and environmental goals. Obsessed with old-school economics, finance ministers seem totally disconnected from today’s imperative to invest in the transformation away from our fossil fuel-based economy and to support people in this process” – Isabelle Brachet, Senior Fiscal Reform Policy Coordinator

CAN Europe continued its focus in 2023 on ensuring that EU funds support genuine climate action and that national budgets are guided by EU fiscal rules to ensure they are fit for climate challenges. On this, the European Commission presented a proposal in April for new economic governance rules, which integrates climate elements. Member states must submit national plans to the Commission outlining their budget, as well as aligning investments and reforms with NECPs. Climate-related fiscal risks will have to be assessed by Member States, which is a recognition of the huge impact that climate change will have on the sustainability of public finances. While this is seen to be a win, the risk that Member States will water down the climate elements in the final deal remains. Additionally, the social and climate context calls for a much deeper reform of the outdated and damaging EU fiscal rules.

Finally, during 2023 CAN Europe has actively worked to ensure that the EU’s economic governance and EU funds genuinely enable decarbonisation of the European economy instead of pouring more money into fossil fuels.

One final aspect of CAN Europe’s work in this field has focused on working at both the legislative level to shape crucial files such as the financial leg of the Green Deal Industrial Plan and the implementation of RepowerEU chapters; and by tracking EU funds to showcase positive investments for the climate and people.