Welcome to Better Europe’s weekly update on EU Affairs.
THE EU’S € 2 TRILLION QUESTION: WILL PUBLIC PROCUREMENT GO SUSTAINABLE?
MEPs are setting the stage for a shake-up of the EU’s public procurement rules, but fault lines are already emerging. While there’s broad consensus on the need to cut red tape and make it easier for SMEs to bid, the real battle is over how much weight social and environmental objectives should carry. During an exchange of views in the Internal Market Committee on a forthcoming report, right-wing MEPs pushed for simplification, warning that excessive bureaucracy was stifling cross-border competition and innovation. EPP shadow Christian Doleschal called for higher thresholds and a streamlined system to encourage start-ups. Meanwhile, the Greens and S&D insist that procurement should be a lever for sustainability and fair labour conditions. The debate comes as the Competitiveness Compass confirms a review of public procurement rules in 2026. However, sustainability remains an afterthought – the document focuses instead on introducing a European preference for critical sectors and technologies, leaving green and social ambitions in the background. With 2 trillion euros of taxpayers’ money at stake each year, MEPs are under pressure to find common ground. The battle ahead? Whether the reform will prioritise price tags or public value.
COMPETITIVENESS COMPASS: A STEP FORWARD OR A THREAT TO THE GREEN DEAL?
The Commission’s new Competitiveness Compass aims to simplify regulations and boost Europe’s economy over the next five years. But the bold initiative, which includes a 25% reduction in sustainability and due diligence reporting requirements, is raising alarm among environmentalists. At the heart of the simplification drive is the question of whether it will lead to a rollback of the EU’s Green Deal regulations. Commission President Ursula von der Leyen has promised that simplification doesn’t mean deregulation but MEP Bas Eickhout, co-leader of the Greens, fears that this dynamic risks dismantling the environmental framework built up in recent years. The Commission wants to channel more private capital into key sectors such as AI, renewables and defence by deepening EU capital markets. Securitisation -a mechanism associated with the 2008 crash- is back in favour as a tool to unlock funding. A proposed competitiveness fund could provide much-needed firepower, but its scope remains unclear, especially with Germany opposed to joint debt. Von der Leyen’s vision marks a shift towards a more investment-friendly Europe – but will it come at the expense of Europe’s climate commitments? As green policies take a back seat, the risk to long-term environmental goals is greater than ever.
CAMPAIGN FOR GREENER CENTRAL BANKING GATHERS MOMENTUM
Yes, it’s brave to push for environmental policies since the world started pandering to the whims of a 78-year-old white man in the White House, who will probably not be around to see whether we make it to climate neutrality by 2050. Some campaigners keep trying as the European Central Bank is working on its Monetary Policy Strategy review, with 41 civil society groups suggesting the bank should “rethink the outdated climate and nature approach” and “implement concrete measures to support the green transition whilst contributing to price and financial stability”. Pushing central banks to better integrate climate risk and perhaps even use public money to do good would help to counter the trend for private banks, where integration of ESG risks in bank capital requirements is no longer seen as a priority. Beyond climate, financial stability is also potentially traded off against short-term economic growth, with the UK following the U.S. decision to further delay application of the “Basel III Endgame” rules that address the shortcomings of the financial crisis, of 2007… to 2027. Guess who’s next to delay kick the can down the road to ensure a “level-playing field”?