Resistance to climate change regulations is growing in the European Union, and the protracted war between Russia and Ukraine has been accompanied by a series of conflicts around the world. As a result, member states have started to turn their backs on “greening” the economy and are focusing instead on defense investment, Hungarian business news site Világgazdaság reports.
With tightening national budgets, member states would reduce the EU fund for domestic innovation from €10 billion to €1.5 billion and stipulate that it can only be used for defense projects, while green technologies or climate protection investments would be excluded.
At the same time, the European Investment Bank (EIB), the world’s biggest lender, is under considerable pressure to finance more projects to strengthen the bloc’s arsenal.
“Climate and digital investments have boomed in the aftermath of the coronavirus outbreak, but economic problems and rising geopolitical tensions, including war in the neighborhood, have put the focus elsewhere,” said Belgian Finance Minister Vincent Van Peteghem.
While the green transition remains a priority, and the bloc’s €800 billion European Sovereignty Fund available until 2026 will partly cover this funding need, Van Peteghem said there was a new focus on “strategic autonomy, competitiveness and defense.”
At the recent EU summit in December, member state leaders indicated that they would prefer to see an extra €1.5 billion in funding to strengthen the protection of the bloc, after the European Commission announced the creation of a new funding scheme, the Strategic Technologies for Europe Platform (STEP), through which an additional €10 billion would be allocated to climate protection projects.
Climate-related spending, meanwhile, remains high, but according to Brussels, it is still too low, with an estimated €1.5 trillion of investment needed each year to cut greenhouse gas emissions by 90 percent by 2040.