Spain to ask for EU budget to be doubled in response to Trump’s threats

Julio García Spain will urge the European Union to increase its budget for the period 2028-2034, to the point of almost doubling the current one, reaching 2% of the Gross Domestic Product (GDP) annually in response to the threats of the US president, Donald Trump. This is stated in an unofficial document, to which EFE had access, prepared for the negotiation of the next multiannual financial framework (MFF), which will begin in the coming months and is usually one of the most divisive in the EU. The European Commission will lay the first stone next Wednesday when it presents its "road map" for the MFF. In it, the Government argues that the EU needs a “more ambitious” budget to respond to the challenges posed in a context of “intensified global competition and digital disruptions”, such as the “triple green, digital and social transition” and the need to boost European competitiveness, but also to strengthen the continent's security and defence. “The new MFF 2028-2034 should therefore be bigger and bolder, making the best possible use of all available resources to address our common challenges and ensure the provision of European public goods while protecting the socio-economic model of the EU's DNA,” says the document. Specifically, Spain sees it necessary for the future EU budget to represent “at least 2% of the EU's annual GDP”, compared to just over 1% in the current period (1.1 trillion euros). If the 750 billion euros of the Next Generation recovery fund, which will expire in 2026, are added, the current framework rose to 1.8% of gross national income. To support this budget, which traditionally comes mostly from the coffers of the Member States, Spain proposes creating new own resources that generate income directly for the community budget, as well as issuing common debt to finance investments of European interest. "A common mechanism based on loans financed by joint debt would support strategic investments and finance European public goods despite the pressures for fiscal consolidation," says the document, which adds that this could be used to support investments in fundamental sectors, including security and defense." "In a context in which Europe must dramatically increase public investment to increase its competitiveness and guarantee its economic security, there are economic reasons to finance investments that produce future common returns by issuing common debt," argues Spain. Common debt issuance has been used to finance the Next Generation recovery fund, but the unprecedented agreement reached during the pandemic made it clear that this would be a temporary mechanism and many countries, led by Germany, the Netherlands and the Nordic countries, have always opposed replicating these issues in the future, although pressures to increase defence spending threaten to soften these reluctance.

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