EU finance ministers meeting in Hungary: Big topic – little interest

The EU finance ministers are meeting in Budapest – but most are boycotting Hungary and having their representatives represent them. There is a lot to discuss after the investment appeal by former ECB chief Draghi.

The topic and the date actually fit together very well. The finance ministers of the European Union want to meet in Budapest to discuss how to finance more climate protection in the EU. At least that is what the invitation from Hungary says. But that doesn't seem to interest too many finance ministers. Of the 27, only four are traveling to Budapest, most of them being represented by their state secretaries, including German Finance Minister Christian Lindner.

The lack of interest in the informal meeting is not due to the topic, but to the host: Hungary currently holds the EU Council Presidency. And because Prime Minister Viktor Orban has completely fallen out with the EU, the meeting is receiving as little attention as possible.

800 billion for the future of the EU

The issue of money is a big one for the EU right now. The former head of the European Central Bank, Mario Draghi, presented his report this week on how the EU can become economically fit for the future.

The scope of the report alone shows how great the deficits are in the community, especially in the area of ​​digitalization: Draghi needed 400 pages and a year of work. More large tech companies, less dependence on Chinese raw materials, more defense and sticking to the goal of CO2 neutrality, according to the summary. But these investments in the future cost a lot of money. Draghi mentions the enormous sum of 800 billion euros.

Investments are huge, said Draghi. They must “increase to around five percent of gross national product. A level we last saw in the 1960s and 1970s.”

Financing still unclear

But where is all the money going to come from? The financial expert names three sources of income for the EU: the contributions of the member states, the EU's own income, such as the plastics tax, or common debt. Ursula von der Leyen expressed it this way when presenting the Draghi report: “We must now have the political will to implement these projects and then decide whether to finance them with national contributions or new sources.”

New sources? That immediately set off the smoke alarm in the German Finance Ministry in Berlin. Finance Minister Lindner rightly suspected that this term meant new joint debts, and there will be no such debts with Germany, he explained evasively.

Court of Auditors warns against Waste of money

The current Court of Auditors reports on the topic of “How carefully does the EU handle money?” reinforce his skepticism. The European Court of Auditors has taken a close look at the Corona recovery fund. Interestingly, this also consists of 800 billion euros – exactly the same amount as Draghi is demanding.

But so far only 29 percent of the money has been used. There is a lack of administrative experts and projects. And even when a project is started, it is often not completed. But the money that has been paid out up to that point is gone.

This must change, says Ivana Maltetic, representative of the European Court of Auditors: “If we finance a measure and it is not completed, we need ways to pay the money back into the fund.” However, this does not exist yet.

In addition, the money was expressly intended to support projects that advance the EU technologically and ecologically. According to the auditors' critical report, this has not yet been achieved either. Many of the projects financed are not as green as they claim to be.

All of this is being held by finance ministers who do not want to provide the EU with more money, such as the Netherlands or Germany. The second topic for the finance ministers' meeting is the ageing of society. It will be interesting to see what ideas the finance minister will contribute to this.