We are civil society organisations, think tanks, trade unions and employers supported by academics from across the European Union. We have come together to call for fundamental reform of the EU’s fiscal rules.

The aim of economic policy across Europe must not be to simply reduce debt. The economy needs to serve the reduction of socio-economic, intergenerational and gender inequalities, the realisation of social rights and the protection of climate and environment. The EU’s fiscal framework should fully support just transitions and a systemic transformation of our economies and societies to keep global warming below 1.5°C.

Climate-related fiscal risks – i.e. the impact that underinvesting in climate change mitigation and adaptation will have on public budgets – need to be part of the country-specific debt sustainability analyses. Regulatory and administrative measures, taxation as well as additional funding also have a role to play to trigger and orient private investments.

Most importantly, governments have the responsibility to steer the way to operate a socially just green transition. The European Union cannot afford to take any other path.

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