Spain and Europe Strengthen Commitment to Funding Green, Digital, and Defense Transitions Amid Competitive Global Economic Climate

Spain is strengthening its commitment to fund the extensive private and public investments necessary for the green and digital transitions, as well as to strengthen defense. Prime Minister Pedro Sánchez is advocating for “new Next Generation funds” to finance “European public goods,” including climate policies, digital transformation, and defense. This aligns with the views of Commissioner Paolo Gentiloni, who calls for adopting similar measures beyond the current recovery fund.

At a recent extraordinary European Council meeting, leaders discussed strategies to address the EU’s competitiveness relative to other major economies. Former Italian Prime Minister Enrico Letta and former ECB President Mario Draghi were tasked with presenting reports on enhancing the single market and increasing investment in key areas like technology, defense, and education. The goal is to improve access to capital for businesses to support necessary investments.

Growing support is emerging for greater integration in the single market, with calls for measures such as Eurobonds for defense and utilizing funds from the Rescue Fund for credits in defense. Former Prime Minister Enrico Letta emphasizes the importance of boosting investments both in the private sector and through public financing mechanisms. The current economic climate necessitates action to address lagging behind other global economies.

Prime Minister Sánchez echoes Letta’s sentiments, emphasizing the need for Next Generation funds beyond 2026 to support European public goods. Spain aims to be a leader in climate policy, digital transformation, and defense, highlighting the importance of investing in these areas. The EU is engaged in discussions on joint funding mechanisms to support these initiatives, recognizing the urgency of the current economic situation.