In last year’s report on competitiveness, Mario Draghi reminded us that the ECB had estimated that Europe’s investment needs amounted to €800 billion per year
- to stimulate growth,
- reduce dependencies
- and achieve the twin environmental and digital transition objectives, together with defence and security.
A year later, Mario Draghi issued some dramatic warnings, summarised in his condemnation of inaction, because
- the challenges associated with these objectives have become more profound,
- European growth has weakened and, we would add, risks becoming negative growth in some sectors of an ageing society,
- our dependencies have increased,
- we have regressed in environmental convergence,
- and, despite increased national military spending, our common security is far from guaranteed.
According to Mario Draghi, the ECB now estimates that the annual investment requirement for the period 2025-2031 would be €1.2 trillion, with a public share of 43%, equivalent to an increase of €540 billion per year.
This is happening in a limited national fiscal space given that, even without this new expenditure the average public debt in the European Union is set to increase by ten points over the next decade, reaching 93% of GDP based on optimistic growth assumptions.
While it is clear that investments will have to be a mix of public funds (which, according to some, should mainly concern defence) and private resources, the need for European revenue will certainly be higher.
On the issue of common defence, European movements in Italy and France have launched a proposal for a new European Defence Community subject to democratic control on the basis of a treaty parallel to the Lisbon Treaty, following the method of the Schengen Treaty.
The European Union will have to take responsibility for public goods that cannot be guaranteed by national budgets burdened by growing debt and the hostility of the middle classes to increased taxation, combined with the tendency of most governments not to target the so-called “super-rich”.
Governments are ignoring the proposals of French economist Gabriel Zucman to draw on the hidden wealth of nations and eliminate tax havens.
This situation risks causing decision-making paralysis, for which governments will be largely responsible, as they are the main actors in the negotiations on the Multiannual Financial Framework (MFF) from 2028 onwards, which will determine the annual budgets, the amount of which is set by the MFF in accordance with the Treaty (Article 312.3 TFEU).
The European Commission is also responsible for this, whose President appears increasingly obedient to the orders of the majority in the European Council.
If the European Parliament wishes to represent the interests of European citizens, it should proceed with a first political act of denouncing financial inaction or a parliamentary uprising at the conclusion of the negotiations on the budget for the financial year 2026.
The starting point for the European Parliament is the working document and motion for a resolution by the co-rapporteurs of the Committee on Budgets, Andrzej Halicki (EPP, Poland) and Matjaž Nemec (S&D, Slovenia), on the Council’s guidelines for the 2026 budget, which we attach here for your information (LINK) (LINK).
The European Assembly has the power to accept but also to reject, by an absolute majority of its members (314.7.c TFEU) the joint draft negotiated with the Council, which is based on the preliminary draft presented by the European Commission, asking the European Commission to present a new draft budget, thus initiating the provisional twelfths until an agreement is reached between Parliament and the Council (314.8 TFEU).
The preliminary draft budget has not been amended by the European Commission, as provided for in Article 314.2 TFEU
- to take account of the worsening European and international challenges,
- because it does not comply with the commitments for 2026 – announced by Ursula von der Leyen in her speech on 10 September 2025 on the state of the Union – relating to the major areas of activity of the European Union,
- because the Council has failed to act to ensure the proper functioning of the annual budgetary procedure, starting with the criteria of transparency,
- because the draft budget is not based on the resources necessary to achieve the European Union’s objectives and carry out its policies.
At its next plenary session from 24 to 27 November, the European Parliament will discuss and adopt a resolution on the MFF presented by the two co-rapporteurs of the Committee on Budgets, Siegfried Muresan (EPP, Romania) and Carla Tavares (S&D, Portugal), accompanied by the opinions of the thematic committees.
The European Parliament should clearly set out the conditions under which it will be prepared to approve the regulation establishing the MFF (Article 312(2) TFEU), taking into account the guidelines emerging in the Council following the questionnaire circulated on 31 July by the Danish Presidency, and in particular
- its five-year duration (Article 312(1) TFEU)
- the definition and planning of multiannual financial perspectives that prioritise the objectives and policies urgently needed by European society in twelve “unions” corresponding to twelve public goods (health, energy, artificial intelligence, environmental sustainability, shared prosperity, new generations, culture, science and research, internal and external security, international strategic partnerships, reception and inclusion, industrial promotion and innovation)
- full financing from own resources through the taxation of negative externalities and the gradual abolition of national contributions (Art. 311 TFEU).
In its November resolution, the European Parliament should announce its intention to promote the convening of interparliamentary assemblies by the end of 2026, to which delegates from regional assemblies with legislative powers in federal systems should also be invited.
The European Parliament should announce its decision to promote “agora” themes based on the participatory budgeting model in order to open a debate and reach deliberative conclusions with the “ambassadors” selected to represent European citizens in the Conference on the Future of Europe and in transnational panels, representative civil society movements, including delegations from candidate countries, the world of work and production, research centres, youth organisations, the Economic and Social Committee and the Committee of the Regions, by creating its own digital platform for consultation.
Finally, and in the spirit of these debates, the European Parliament should consult the Court of Justice, the ECB, the Court of Auditors and the EIB, the national anti-corruption authorities and the national networks that are monitoring the implementation of Next Generation EU and the national recovery and resilience plans (NRRPs).
Will the European Parliament take on this historic responsibility?
Rome, 22 September 2025
Pier Virgilio Dastoli