The EU is shifting its spending priorities from greening the economy to investing in defence, as the bloc faces backlash over climate regulation and grapples with Russia’s war in Ukraine.
Faced with tightening national budgets, member states have reduced a common fund designed to spur innovation in the bloc from €10bn to €1.5bn — and have ensured that it can only be used for defence-related projects, not green technology or other climate-related investments. The European Investment Bank, the world’s largest lender that labelled itself the “climate bank” in 2019, is also under pressure to fund more projects in the arms industry.
After the Covid-19 pandemic “there was a huge focus on green and digital”, said Belgian finance minister Vincent Van Peteghem. “Now . . . we see that focus shifting a little bit away.”