The new European Financial Framework

The 2028-2034 Multiannual Financial Framework was the focus of the conference organized by Intesa Sanpaolo's IMI Corporate & Investment Banking and Institutional Affairs, featuring speeches by representatives of the European Commission, the European Parliament, and the European Investment Bank.

Marco Boscolo

Head of European Regulatory & Public Affairs, Intesa Sanpaolo

We promoted this meeting because we believe it is particularly important that this discussion does not remain a closed, bureaucratic, technical debate.

We believe that this is a strategic issue that will have concrete and practical effects on the competitiveness of the European Union and therefore of our companies over the next seven to ten years.

Mauro Micillo

Chief of IMI Corporate & Investment Banking Division, Intesa Sanpaolo

This afternoon we will have the opportunity to delve into the increasingly complex and interconnected challenges that Europe is called to face in a particular moment in history. Climate change, energy security, geopolitical issues, digitalisation accelerated by artificial intelligence, and the reorganisation of global value chains are topics, issues and also opportunities which require systemic and coordinated responses.

In this scenario, the Multiannual Financial Framework appears as the real strategic tool for financing the projects that can boost the industrial competitiveness of our European Union in research and innovation.

In this context, banks have an important role, because they cannot limit themselves to their traditional function as lenders; they must become true engines of transformation, using their power and their ability to intercept and channel private capital in the best possible way, alongside public funds.

The fragmentation of Europe’s financial markets, moreover, disperses every year substantial resources that could support growth. We are talking about EUR 300 billion in savings that could be more appropriately directed towards the development of our European Union and our infrastructure, and this is precisely what the Savings and Investment Union has addressed, as you know.  

PUBLIC AND PRIVATE CAPITAL: STRATEGIC SYNERGY TO DELIVER MAJOR PROJECTS

In my opinion, the Multiannual Financial Framework is a potentially very significant strategic lever because, if you think about it, last summer the European Commission presented the new proposal for the 2028–2034 programming cycle, with its various priorities — in particular the green transition, digitalisation, and economic and social cohesion.

Now, all these objectives nevertheless presuppose, as a fundamental prerequisite, a structured synergy between public and private capital, because it is undeniable that we do not have enough public resources to face the scale of the challenge ahead.

Only a year and a half ago we estimated – in particular, the Draghi report estimated- EUR 800 billion per year as the needed amount .  Today, the most recent estimates have brought this amount at EUR 1.2 trillion.  

And it is precisely in this context that the banking sector, which is undergoing a profound transformation, can play an important role..

The ability to attract and propose solutions that, so to speak, place the public and private sectors on the same level, the well-known public–private partnerships, attracting private capital that can provide the leverage, the driving force needed to carry out major projects.  

On the technology front, Europe suffers from a significant delay in the development of artificial intelligence compared with the United States and China, that’s undeniable. Bridging this gap requires a genuine single market for innovative companies, more targeted and substantial funding, streamlined regulation, and closer integration between industry and research.

Then there is the energy issue, which is actually a competitive obstacle, Draghi also reiterated this recently; investments in renewable infrastructure are needed, as well as a reform of energy markets, and the adoption of long-term instruments such as PPAs -the Power Purchase Agreements- and Contracts for Difference, in order to ensure stability and to guarantee bankability through the use of private capital for these infrastructures.

THE ROLE OF BANKS: A BRIDGE BETWEEN EUROPEAN RESOURCES AND TANGIBLE PROJECTS

The full success of the plan will depend on the ability to build a shared commitment. So, first of all, it will be a matter of identifying what the so-called common goods are, that is the goods, services and strategic initiatives on which, as European citizens, we feel we can identify and develop a shared commitment. Then we need to define the methods, instruments and timelines for implementation.

Banks, more than any other actor, have the possibility, and if you will allow me, also the responsibility, to shorten the distance between European resources and real projects. That is why today, more than ever, it is important to strengthen institutional dialogue – and tonight’s meeting is an example of this – to build a common vision and turn the Plan into a real accelerator of sustainability, competitiveness and, why not, inclusion.

Marco Boscolo

I would say that at least two central themes emerged from today's discussion. One is the necessary balance between ambition, budget flexibility, and predictability of investments in the next multiannual financial framework. The other theme is that the public-private partnerships  need an alignment of objectives, because the European Union budget, the public budget alone, as we have seen, cannot achieve strategic objectives on its own.. on defense, energy transition, climate change, and business competitiveness.

The path has been laid out, but there is still a long way to go. Now it is the time for Europe to act.