From rising energy bills and defense spending to a dizzying race for AI leadership, the €1.2 trillion in annual investment the continent needs to stay competitive looks increasingly like an underestimate. Addressing these challenges cannot come at the expense of the resources needed to strengthen integration, solidarity and a robust welfare state — core elements of the European project and our safest bet for securing the EU’s place on the world stage. As Europe rushes to unify its capital markets and mobilize trillions of euros in idle household savings, it should also pursue a long-term financial framework that breaks with its reactive past.
Instead, we are moving in the opposite direction. Louder calls to slash the EU’s 2028–2034 financial framework will prevent Europe from acting on its own terms in a hostile world. The European Commission’s original proposal of almost €2 trillion varies little from the current spending plan once repayments of the post-pandemic recovery grants are excluded.
That amounts to roughly 1.15% of the EU’s gross national income (GNI). To get the debate back on track, Spain has proposed freeing up to €11 billion a year in resources that make both financial and political sense. Instead of repaying the debt associated with the grant component of NextGenerationEUfaster than required, the EU should link its service to its long-term economic capacity.
An annual payment of about 0.06% of EU GDP would retire the debt by 2058, the deadline agreed by member states. Under the current plan, repayments would amount to between 0.09% and 0.11% a year over the next seven years. Reprofiling the debt payment would free up nearly €70 billion over that period, whichis equivalent to about one-fifth of the proposed European Competitiveness Fund thatwould channel investment into strategic sectors.
It also amounts to roughly one-third of the aid the EU has sent to Ukraine since Russia’s full-scale invasion began in 2022. This approach would not only release extra resources but keep the stock of EU debt broadly stable in the medium term while sending a strong signal to investors who are demanding more euro-denominated assets. The proposal can also be seen as part of a more ambitious strategy to develop a European safe asset that drags down the liquidity premium that investors are asking for.
Separately, Spain has proposed allowing the Commission to issue a portion of member countries’ debt on their behalf, helping to create a deeper common market for European debt. This could generate €25 billion in annual interest savings. With Spain for the first time set to become a net contributor to the next long-term budget, we are more than willing to pay our fair share to help make the EU a global powerhouse that creates opportunities for its citizens.
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