Lhe European Union has set itself two major objectives: ensuring the climate transition and avoiding public debt crises. However, as they are pursued today, policies conflict these objectives. How can we put an end to this opposition to reconcile economic and climate sustainability? By implementing climate rules that complement European budgetary rules.
Without changing European rules, we will find ourselves facing a dangerous dilemma. On the one hand, the fight against global warming is a legal requirement, enshrined both in the Union treaties and in the 2021 European climate law. We must achieve carbon neutrality by 2050 and, Meanwhile, reduce our net greenhouse gas emissions by at least 55% by 2030 (compared to 1990 levels). The financing needs to achieve these objectives, on which we are already behind schedule, are significant: around two to three points of additional European GDP per year until 2030, according to different studies. And again, this is a low limit, which does not take into account broader environmental considerations, climate damage, or social justice.
On the other hand, we have just agreed on new binding budgetary rules. These aim to ensure the sustainability of our public debts which reach on average 82% of GDP. However, they will tie the wrists of States, and they are difficult to reconcile with the financing of the transition. According to the Bruegel think tankthis reform could lead to an average budgetary adjustment of 1.7% of European GDP in four years.
Obligations of means and results
By not asking ourselves the question of reconciling these objectives, we risk ending up losing on all counts. On the climate front, the return of austerity policies will put us behind our objectives, even though the years to come are critical. This is already the case: the Minister of the Economy and Finance, Bruno Le Maire, announced 10 billion euros in savings in 2024, and the main victim is the Ministry of Ecology. Economically, this delay will cost us much more in the medium term due to the accumulation of shocks. We risk ending up having to pay the bill at a high price, by increasing the price of carbon, which will put some households and businesses at risk.
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