A sovereign and free, competitive and sustainable Europe requires a fundamental modernisation of the EU. The EU budget and the Multiannual Financial Framework (MFF) for the years 2028 to 2034 are central to this. At the preparatory workshop of the European Parliament's Committee on Budgets on 7 November 2024, Michael Thöne outlines in his contribution which reforms on the expenditure side can strengthen the EU's original European tasks, where the revenues for this should come from and how the MFF needs to be structurally modernised in this process.

Aligning public budgets more closely with policy objectives, impacts and sustainability has long been a central research area at FiFo. With the start of the 'inception phase’ on 25 October 2024, the Institute embarks on a new project to support the Ministry of Finance of Baden-Württemberg in developing green budgeting practices. The project is part of an EU-wide process organised by the European Commission (DG Reform) and managed by Expertise France.

The financing of international climate efforts and the sustainable development goals (SDGs) is unreliable and insufficient. Joint international taxes and contributions promise to remedy this situation. The Global Solutions Initiative presents a paper in Berlin on 30 September 2024 in which Helge Sigurd Næss-Schmidt, Margit Schratzenstaller-Altzinger, Michael Thöne, Christian Kastrop and Rémy A. Weber develop six performance criteria for global SDG financing and apply them to selected proposals. Particularly suitable are rising carbon taxes for aviation, shipping and energy-intensive industries, as well as the use of gross national income as a direct tax base, already established in the EU as an own resource.

Russia's war of aggression against Ukraine has led to a reassessment of security policy in Germany. In 2022, at the 'turn of an era', a special fund of 100 billion euros was created to close the defence gaps of the past. However, this money will soon be expended. At the 19th Petersberg Dialogue on Security, jointly organised by the German Armed Forces Association, the German Society for Security Policy and the Friedrich Ebert Foundation, Michael Thöne discusses the fiscal priorities of the ‘Zeitenwende’ and the question of how Germany can raise up to 100 billion euros each year for defence from 2027 onwards.

In 2030, one in seven municipal positions in North Rhine-Westphalia will remain vacant. With this edition of the NRW.BANK.Fokus Kommunen survey, FiFo is examining the financial situation, the investment backlog and climate protection in North Rhine-Westphalia's municipalities, as well as the growing personnel gap in cities, towns and districts. Due to demographic change, the gap cannot be closed by personnel policy alone. The study therefore also investigates how administrative simplification and other measures can reduce the need for personnel.

Germany and Europe must become more productive and competitive again. The necessary transformation can only succeed if it is designed with foresight and actively promotes climate neutrality and ecological sustainability. In a joint project with FiFo on behalf of the Federal Environment Agency (UBA), the German Institute of Urban Affairs (Difu) and the Öko-Institut are investigating the extent to which regional structural policy in Germany is meeting these demands. The focus is on the German Integrated Funding System (GFS) with its 22 programmes. In a short policy paper and a concept paper, the three postulates of ecological sustainability, foresight and transformative ambition are presented with regard to their significance and possible operationalisation for regional policy.

Much of the Quality of Public Finances depends on how efficiently and for what purpose public funds are spent. As investments in the future always struggle to compete in the political arena, an indicator of which spending not only benefits the immediate present can help to improve this quality. Twenty years ago, FiFo developed the ‘WNA budget’ exactly for this purpose. Now, in a modernised, contemporary form, Albrecht Bohne, Friedrich Heinemann, Thomas Niebel and WNA-inventor Michael Thöne present the ‘future ratio’ as a new quality compass for the German federal budget in Perspektiven der Wirtschaftspolitik. Cleverly applied, the future ratio can also help to monitor and control a reformed debt brake.

Climate protection and conventional municipal fiscal equalisation do not match. This somewhat sobering finding from the study conducted by FiFo Köln together with Thomas Döring (sofia Darmstadt) for the Land North Rhine-Westphalia prompts us to take an innovative approach. With the climate impact approach, we present a concept - not yet ready-to-use - for combining targeted municipal climate protection, modern fiscal performance orientation and the reduction of administrative burdens. In its second focus, the study analyses the advantages and disadvantages of multi-year tax capacity measurement in fiscal equalisation. The German Report is published today as FiFo Report No. 34.

The European Union needs to become more capable - also, but not only, for future enlargements. Cohesion policy is still part of the problem. However, it can become more part of the solution again, argues Michael Thöne, once the fiscal architecture of cohesion policy is openly acknowledged in its function also as a European financial equalisation and refined in a more subsidiary manner. The paper is published simultaneously in German as FiFo Discussion Paper 24-02 and in English as ZEW Discussion Paper 24-038.