New EU rules restricting government borrowing would prevent all but four European countries from investing enough to meet their Paris climate commitments and limit global heating to 1.5C, according to research from the New Economics Foundation (NEF), published today. These countries are equivalent to just 10% of the bloc’s GDP. In order to meet the EU’s more limited climate targets of cutting emissions by 55% by 2030, proposed borrowing rules would leave 13 countries, representing half of the bloc’s GDP, unable to invest enough.
NEF’s report argues that without changes to the EU’s borrowing rules or new EU-level funding to support member states with higher debt and deficits, green industrial policies will likely lead to greater economic disparity between countries. The report argues that this will prevent a large proportion of member states from being able to invest enough to keep up with other major global economies like the USA and China.