Spain Leads Call for Next Generation Funding to Support EU’s Green and Digital Transitions as Well as Defense

In the aftermath of the COVID-19 pandemic, Spain is taking a leading role in advocating for increased funding to support its green and digital transitions as well as defense. Prime Minister Pedro Sánchez is calling for the creation of new “Next Generation funds” to finance “European public goods,” including climate policies, digital transformation, and defense. This aligns with the views of Commissioner Paolo Gentiloni, who has called for similar measures beyond the current recovery fund.

At an extraordinary European Council meeting, leaders are discussing strategies to improve the EU’s competitiveness relative to other major economies. Former Italian Prime Minister Enrico Letta and former ECB President Mario Draghi have been tasked with presenting reports on enhancing the single market and increasing investment in key areas like technology, defense, and education. The goal is to provide businesses with better access to capital to support necessary investments.

There is growing support for greater integration in the single market, with calls for measures such as Eurobonds for defense and utilizing funds from the Rescue Fund for credits in defense. Former Prime Minister Enrico Letta emphasizes the importance of boosting investments both in the private sector and through public financing mechanisms. The current economic climate necessitates action to address lagging behind other global economies.

Prime Minister Sánchez echoes Letta’s sentiments, emphasizing the need for Next Generation funds beyond 2026 to support European public goods. Spain aims to be a leader in climate policy, digital transformation, and defense, highlighting the importance of investing in these areas. The EU is engaging in discussions on joint funding mechanisms to support these initiatives, recognizing the urgency of addressing economic challenges caused by COVID-19.