In 2007, Jean-Claude Juncker, then President of the European Commission, famously remarked, “We all no what we have to do, but we don’t know how to get re-elected once we have done it.” Nearly two decades later, Europe faces a similar conundrum, now dubbed “Von der Leyen’s curse.” The challenge? Europe’s leaders know what needs to be done but are grappling with how to fund it.
In 2025, reports authored by prominent figures like Enrico Letta, Mario Draghi, and Sauli Niinistö emphasize the urgent need for Europe to deepen market integration, accelerate innovation, and invest in critical sectors.These initiatives aim to bolster the continent’s resilience against crises and conflicts.Though, the financial burden is staggering. Draghi alone has called for an additional €800 billion in annual expenditure.The question looms: where will this money come from, and how can it be allocated effectively to serve collective priorities rather than narrow national interests?
One potential solution lies in large-scale public-private partnerships. Imagine a scenario where the EU, in collaboration with the European Investment Bank, entices institutional investors and venture capitalists with irresistible offers. These partnerships could provide a stake in Europe’s economic and technological future, backed by guaranteed government spending or protected market potential. Yet, coordinating such an effort across 27 member states is no small feat. The failure to establish a common European defense bond, despite the ongoing crisis in Ukraine, underscores the complexity of such endeavors.
Taxation is another avenue. By increasing import tariffs and emission levies, the EU could generate tens of billions annually. However, this approach carries risks. Higher taxes could stifle the vrey industries Europe seeks to protect and perhaps provoke trade conflicts with key global partners.
Debt mechanisms remain a third option, but Europe’s incomplete monetary union imposes strict budgetary discipline on member states. while strategic investment deficits are possible, thay require intricate negotiations with the european Commission. Mutualized European debt, managed directly from brussels, remains a political hurdle that member states have yet to overcome.
Compounding these challenges is the EU’s sluggish, bureaucratic spending processes. In a global arena dominated by state capitalism and mercantilism, the bloc struggles to compete with the financial and political clout of China, Russia, and the United States. To achieve its ambitions, the EU must streamline its existing frameworks for projects of common European interest while fostering investment ecosystems outside formal programs. Coalitions of investors and member states could play a pivotal role in this change.
Countries like Poland are already stepping up, leveraging public spending to bolster defense and security along Europe’s eastern borders. This proactive approach not only strengthens Europe’s collective capabilities but also positions these nations as key players in shaping the continent’s future.
The path to lifting “Von der Leyen’s curse” lies in fostering coalitions of states that align their self-interests with Europe’s broader strategic goals. By integrating domestic state aid with the European market, prioritizing geopolitical objectives, and embracing flexible decision-making, the EU can navigate its current challenges. Even the UK, post-brexit, could find a role in this new geopolitical framework, notably in areas like security and defense. In solving its funding dilemma, Europe might just find a way to reconcile its past divides.
