Von der Leyen’s broken promise: a just transition without funding

This week, member state leaders are meeting at the European Council to discuss the European Commission’s proposal for the next EU budget.

So far, the debate on the Multiannual Financial Framework (MFF) has largely been dominated by the tired refrain of the second Ursula von der Leyen commission: competitiveness above all else.

This talking point conceals an agenda of deregulation and the systematic undermining of social and green investment.

It is not about strengthening Europe as a credible and trustworthy pioneer of sustainability, but about chasing the United States and China in a race to the bottom: a race Europe can only lose.

In the 2024 political guidelines, von der Leyen pledged to “significantly increase our funding for a just transition across the next long-term budget”.

However, this promise has already been broken.

The commitment to ensuring that the green transition is adequately funded and that its costs are not unfairly borne by workers, people in vulnerable situations and regions and territories that are already experiencing hardship is now left unfulfilled.

Not only does the commission’s proposal fail to deliver, but it also risks rolling back hard-won progress on social, climate and environmental objectives, all in the name of competitiveness.

Although the commission's introduction of a horizontal spending target for climate and environmental goals is welcome, 35 percent is far too low.

To make a real dent in the climate and environmental investment gap, this target must be raised to at least 50 percent of the €2 trillion EU budget.

It is equally concerning that the National and Regional Partnership Plans — the budget heading that encompasses funds for cohesion and agriculture, among other purposes — are the only part of the proposal that includes a social spending target.

Moreover, the social target in the NRPPs is a mere 14 percent, which would allocate less funding than is currently ringfenced in the European Social Fund+.

If von der Leyen is serious about delivering on her promise to fund a just transition, this target must be substantially increased.

The proposal also fails to ensure that funding reaches those who need it most and that it comes with clear and enforceable conditions.

National governments should be required to earmark more than the current 25 percent of European Social Fund+ funds for social inclusion, as well as allocating resources to other critical social priorities, including social protection, poverty reduction, tackling youth unemployment, and asylum, integration and inclusion programmes.

Although the European Competitiveness Fund lists advancing a just transition as one of its objectives, in practice it provides industry with ‘no-strings-attached' funding.

This is unacceptable.

Ambitious social and environmental conditions must be attached to any financial support granted to companies.

Even more alarming is the fact that any concrete support for just transition in regions and territories has effectively disappeared from the proposal compared to the previous budget.

The Just Transition Fund is set to be discontinued, and support for just transition regions has been marked as optional at a moment when the need has never been greater.

In the absence of a stand-alone Just Transition Fund, support for these regions and territories must be made compulsory and systematically channelled through the National and Regional Partnership Plans and other MFF instruments to ensure that existing just transition efforts continue and expand.

To conclude, the commission’s proposal has got the negotiations on the next MFF off to a bad start.

However, EU leaders gathered at the summit have the opportunity to steer the negotiations in a new direction in terms of both content and form, and negotiators will have the chance to make the necessary corrections over the next two years.

Rather than lowering social standards and undermining rights, the EU should defend, promote, and expand its social model.

Instead of rolling back climate and environmental legislation, the EU should decisively invest in meeting the 2030 and 2040 targets to achieve climate neutrality and be the pioneers of change.

Decision-makers cannot afford to engage in a race to deregulate or bow to the demands of industry.

They must stop listening to those defending a failing system and start listening to the people, who never asked for greater 'competitiveness', but for a good quality of life, fairness and sustainability.

They must creatively and boldly confront the real crises Europe faces: soaring living costs, growing inequality and the urgent need to tackle climate change and environmental degradation.

These challenges are not going away; in fact, they are becoming more acute. Addressing them requires substantial investment to drive profound structural changes in our economies and societies.

We must transform how we produce, consume, work and live, while ensuring that everyone's well-being and quality of life improve.

This is what the MFF must deliver. Now is the time to put EU funds to work in building a more equal and sustainable Europe.