(a)

advance the EU’s long-term objectives and priorities in the field of the green transition, including its social dimension (11);

(b)

increase the growth potential of European economies in the medium term and strengthen their resilience to external shocks in the long term;

(c)

provide clear European added value, such as significant cross-border benefits, economies of scale, or address critical gaps in European public goods;

(d)

complement and support other European, national or regional investments in order to enhance the overall coherence and impact of EU strategic investment efforts.

(a)

Infrastructure: investments in the expansion and maintenance of a functioning cross-border infrastructure (in particular cross-border express train services) play a central role in socio-ecological transformation (12).

(b)

Energy Union: particular focus is needed on investments to complete the Energy Union. Massive investments are needed to expand electricity transmission and distribution grids. In addition, the expansion of renewable energies, the expansion of energy storage, the construction of a pipeline network for hydrogen or the conversion of existing gas pipeline networks are important projects with European added value that justify EU-level financing.

(c)

Industrial policy: the fund should have a strong industrial policy component. The EU needs to play an active role to maintain prosperity in Europe and at the same time make the EU economy fit for the future (13). To that end, future technologies essential for climate neutrality must be actively promoted. EU funding should focus on sectors in which the EU can become internationally competitive after a temporary support phase, such as battery cell production or the market for clean hydrogen (14). However, focusing solely on selected clean tech industries is not enough. European industrial policy should also actively support future drivers of growth in high-tech areas. The proposed EU fund could contribute to better coordination of state aid measures and would be a first step towards an integrated European industrial strategy. The allocation of public support should be competitive and use market-driven instruments such as auctions, tenders and measures akin to tax credits. Support needs to be targeted and temporary, progress must be monitored transparently, and schemes must come with clear criteria for ending unsuccessful projects.

(d)

Social investments: Socially acceptable restructuring of our economy will only succeed if the population in the Member States is properly prepared for new skills. Action is therefore imperative in the area of further training and (re-)skilling of employees. These types of social investments can help remove obstacles to private investments, as the lack of skilled staff is still one of the main investment obstacles for companies in the EU (15). Social investments of this type can increase the productivity of the potential workforce in the medium to long term and therefore promote economic growth (16). Expansion of social investments in these fields can also help achieve the goals of the European Pillar of Social Rights and its action plan.

(a)

A significantly increased GNI contribution by Member States should be one component of this financing strategy for a new EU investment fund. Since demands on the EU are increasing strongly in areas such as defence, industry, external economic relations and climate, Member States need to ensure that there is a corresponding increase in the financing of the EU’s institutions.

(b)

In addition, new genuine own resources for the EU are crucial. This will repay the interest and principal from 2028 of NGEU debts incurred by the pandemic recovery fund and finance additional investments needed to plug the investment gaps in the transition by means of EU bonds. The EESC calls on the Member States to adopt and implement the Commission’s proposed package of new own resources, and to identify additional candidates which can put the next MFF on a solid footing (17).

(c)

Joint EU debt issuance was pioneered successfully as an innovative instrument during the pandemic and could be repeated so as to finance the sustainable competitiveness and resilience of the Single Market (18). New studies indicate that financing EU investments for the Green Deal by having the Commission issue EU bonds makes sense from a macroeconomic perspective (19) and is legally viable (20).

(a)

The EESC points out that a new EU investment capacity should be located within the overall MFF to ensure democratic accountability and control. It should follow the example of the Structural Funds, rather than being a separate external financing vehicle like the RRF. The European Parliament played a key role in designing the Facility’s priorities but its involvement in the subsequent implementation, monitoring and control of funds is minimal compared to the Council. The European Parliament’s primary role is limited to gathering information and increasing transparency through ‘recovery and resilience dialogues’ as well as through the discharge procedure of the previous year’s EU budget.

(b)

As far as stakeholder engagement is concerned, the EESC points out that the partnership principle, as established in the EU Structural Funds, continues to be crucial. This principle ensures that regional and local authorities, civil society, social partners and, where appropriate, research organisations and universities are properly involved. Their input has helped to design programmes geared to local and regional circumstances and is acknowledged to be an enabler of place-based sustainable transitions, being especially important in the phase of needs analysis and priority development (22). For a new EU investment fund, this principle should be applied at EU level, ensuring consultation and participation in designing priority sectors, projects and in the implementation phase. Following the example of other programmes, there should be an obligation to establish a monitoring committee (or similar bodies) or involve those already established in other areas. The 2014 EU Code of Conduct on Partnership, which provides the basis for the operation of monitoring committees, should be revised to ensure effective implementation of the partnership principle in all Member States (23).

(c)

The EESC considers that performance-based budgeting should continue to be implemented in future EU investment policy (24). However, the performance indicators should primarily be related to the facility’s general and specific objectives. If the disbursement of EU funds is linked to more specific structural reforms, the reform priorities have to be decided through democratic procedures that include parliaments and organised civil society (25).

(d)

The EESC agrees that disbursement of EU funds through a new investment capacity must be conditional. Firstly, all funding must be conditional on compliance with the fundamental principles of the rule of law. Payments under the new instruments should, therefore, fall under the Budgetary Conditionality Regulation and the Commission should have the power to withhold approval of EU funds if rule of law standards are not met. Secondly, EU funding should be conditional on sound public finances at Member State level, as specified and agreed in the new EU fiscal rules. This way the EU economic governance system could be improved and the aim of fostering sound economic finances could be reconciled with the aim of securing enough funding for investments of strategic European interest.

(e)

The EESC also points out that EU investment policy works better on the ground if EU funds provide for their own administrative capacity and technical assistance, including in Member State administrations. Technical assistance is also needed for civil society, to enable it to participate effectively in monitoring the bodies which steer and control the disbursement of EU funds at national and EU level (26). A coordinated EU approach to addressing capacity gaps is essential for cohesion and to avoid the fragmentation of the Single Market.

(a)

An independent oversight board with representatives from the EU institutions, Member States and civil society organisations (including social partners) to monitor the fund’s use and impact;

(b)

Regular public and open reporting on funded projects, their progress and outcomes;

(c)

Clear criteria and guidelines for project selection and fund disbursement;

(d)

Accessible complaint and appeal mechanisms for stakeholders;

(e)

Mandatory ex post evaluations by the European Court of Auditors.