Mario Draghi’s call for the EU to continue issuing joint bonds to finance key investments has deepened the divisions within Germany’s already fragmented coalition government and received strong criticism from the Netherlands.
In his eagerly awaited report on the future of the EU’s competitiveness, former European Central Bank President Draghi stated on September 9, Monday, that the EU should continue to build on the model of its €806.9 billion pandemic recovery plan, provided that “political and institutional conditions” are met.
The NextGenerationEU (NextGenEU) program provides grants and loans to member countries for critical investments in exchange for targeted reforms, financed by jointly undertaken debts by EU member states.
Historically fiscally “conservative” EU countries, including the Netherlands and Germany, strongly oppose the renewal of NextGenEU beyond its August 2026 deadline.
FDP’s concerns: “Bureaucracy and planned economy”
Christian Lindner, leader of the liberal FDP and German Finance Minister, wrote on X on Monday that “the EU’s joint borrowing will not solve structural problems: companies are not lacking subsidies. They are tied up by bureaucracy and a planned economy. And they struggle to access private capital. We need to work on that.”
Lindner’s assessment stands in sharp contrast to that of Green Party’s Vice Chancellor and Minister of Economic Affairs Robert Habeck, who described Draghi’s report as “a call to action for the new European Commission and the EU as a whole.”
Greens support Draghi
Habeck said, “I am happy to pledge support for the [report’s proposals]. Innovation, better framework conditions, and mobilizing public and private sector investments are the order of the day.”
The differing views among ministers emerged amid ongoing budget disagreements within Chancellor Olaf Scholz’s federal coalition government in Germany.
Known as a “fiscal hawk,” Lindner has repeatedly called for deep cuts in public spending to comply with Germany’s constitutionally mandated debt brake. These calls have been resisted by the Greens and the SDP.
Netherlands: More money is not always the solution
Draghi’s report received a uniformly negative response from members of the Netherlands’ four-party coalition government, which includes far-right factions.
According to Dutch news agency ANP, Eelco Heinen, a well-known “fiscal hawk” and member of the conservative People’s Party for Freedom and Democracy, said, “More money is not always the solution.”
A similar assessment came from Dirk Beljaarts of Geert Wilders’ right-wing Freedom Party (PVV). Beljaarts stated, “Additional public investments are not an end in themselves. They are only necessary in cases of unfair competition or market failure.”
Objections from EU diplomats
Criticisms of Draghi’s call for a significant increase in EU-level investments have also been echoed by some EU diplomats.
An EU diplomat speaking to Euractiv referred to the bloc’s Multiannual Financial Framework (MFF) or “regular” budget, stating, “The discussion on more EU investment will be part of the next MFF debate.”
The bloc’s current seven-year €1.2 trillion MFF will end in 2027.
Southern countries support the report: Support from Spain and France
On the other hand, Draghi’s proposals have received support from some key member states.
Bernard Guetta, a member of French President Emmanuel Macron’s Renaissance party, praised the report’s call for “common defense, industrial policy, and abandoning the taboos of joint debt.”
Speaking to Euractiv, Guetta said, “It is absolutely necessary to urge member states, the European Parliament, and the future Commission to fully embrace the idea of industrial policies and joint investments.”
Guetta also called on member states like Germany and the Netherlands to “open their eyes and end their ideologies” regarding joint borrowing.
The deputy acknowledged that France, which was officially “reprimanded” by the European Commission earlier this year for high public spending, might not be the most reliable country to advocate for EU joint financing due to its own public finances being in the red.
Guetta’s support for Draghi’s key proposals was echoed by Spain’s Finance Minister Carlos Cuerpo, who, like Draghi, believes that some of the necessary financing must come at the EU level. Cuerpo shared the need for urgent work on a permanent EU joint debt program.
Opposition in Italy: Lega and Five Star Movement against Draghi’s proposals
In Italy, while opposition from the Democratic Party and right-wing coalition members Forza Italia and Brothers of Italy generally agree that Draghi’s proposals are a “step in the right direction,” the coalition’s small partner Lega and the opposition populist Five Star Movement disagree.
Lega Senator Claudio Borghi stated on X that every line of the report poses a “deadly threat” to Italy, accusing Draghi of wanting to turn Italy into “the next Greece for revenge.”
Pasquale Tridico, head of the Five Star Movement delegation in the European Parliament, directly targeted Draghi. Tridico argued that Draghi’s report represents a form of self-criticism for “condemning the neoliberal policies that underpin the current European structure” and questioned Draghi’s role in key EU decisions, particularly regarding the Stability Pact reforms which Draghi now supports but which Tridico argues are inconsistent with the large-scale investments in innovation and green transition.
