The fund should strengthen the EU “strategic autonomy” and the green and digital transitions, be integrated into the current EU long-term budget, and mobilise private investments.
The desire for a sovereign fund is included in a resolution adopted by the European parliament last Thursday in Strasbourg. In doing so, the parliament is reacting to the European Commission’s plan to strengthen the competitiveness of clean industries in Europe, the Green Deal Industrial Plan.
Part of that plan is a new, temporary relaxation of the state aid rules. Earlier, the [Dutch] government announced that it is not in favour of this, because it mainly benefits large countries (read: France and Germany).
There are similar concerns in Strasbourg. “Members of the European Parliament resolutely oppose any attempt to relax state aid rules without providing a European solution for all member states that do not have the budgetary capacity to finance large-scale state aid,” a statement said.
A new European sovereign fund could solve that problem, parliamentarians believe. The fund should become part of the EU’s current long-term budget, and also mobilise private investors. Incidentally, they also think state aid rules could be simpler and more flexible, but in such a way that they are “targeted, temporary, proportionate and consistent with EU policy objectives.”
The Commission explicitly left an opening for a sovereign fund in the Green Deal Industrial Plan, but has not yet become concrete about it. Discussions on this in the Commission should take place by summer, so that a proposal could be ready by mid-2023. By then it will also become clear how any fund should be funded.
Response from Dutch government
The [Dutch] cabinet is not convinced of the need for a sovereign fund. Minister Micky Adriaansens (Economic Affairs and Climate, VVD) wrote to the House of Representatives earlier this month, in response to the plans from Brussels, that she would rather see the Commission improve the use of existing resources and instruments, such as RePowerEU, InvestEU, and the Innovation Fund.
Coalition parties in the Lower House are divided. The [ruling party] VVD [People’s Party for Freedom and Democracy} opposes taking on new common debt, while D66 [Democrats 66] welcomes it. A parliamentary majority does seem open to a sovereign fund.
Earlier in February, independent MP Pieter Omtzigt tabled a motion calling on the cabinet to rule out the possibility of allocating money with new loans, “for example through a sovereign fund,” when promoting energy transition in European industry. That one did not get a majority.
This article was originally published in our sister publication Energeia.nl on 16 February.
