This brief developed under SLYCAN Trust EU Work Programme examines how shifting budgetary priorities across the EU and its Member States are reshaping the landscape for domestic investment in the green and just transition, ensuring that the transition towards a climate-neutral economy is taking place in a balanced way, leaving no one behind. Since 2020, successive crises—from the COVID-19 pandemic to Russo-Ukrainian war on Ukraine—have prompted the rapid reallocation of public resources toward security, defence, and industrial competitiveness. While climate goals remain formally embedded in EU strategies, fiscal and political realities are driving difficult trade-offs. Green and social transition spending is increasingly vulnerable: delayed, diluted, or deprioritised. The stagnation of EU Member States’ efforts under a baseline risk scenario is driven by a combination of factors: fiscal tightening, short-term challenges prompting budgetary reprioritisation, and political instability and fragmentation. Climate finance remains insufficient overall and lacks uniform and effective safeguards. Although the EU is striving to integrate environmental objectives within its defence and competitiveness agendas, doubts persist regarding monitoring mechanisms and the risk of greenwashing. Current developments indicate that despite its efforts, the EU remains off track to meet its 2030 and 2050 environmental targets. However, within the MFF 2028-2034 and the current presidency agenda, there is a clear intention to maintain climate concerns on the policy agenda. Flexibility, competitiveness, and security priorities must not – and do not need to – undermine or compete with environmental funding. Rather than mere coexistence, these objectives should be mutually reinforcing.
SLYCAN Trust (Wed,) studied this question.