Federal fiscal capacity and the challenge of the green transition in the EU

The debate on the necessity of a federal fiscal capacity in the EU has featured prominently on the EU's agenda over the past decade. New Generation EU marks a historic breakthrough in that regard. This breakthrough has been accomplished in order to fulfil macroeconomic stabilization functions, but the bulk of the funding has been earmarked for green transition projects. This paper asks whether a federal budget has added value in relation to the green transition and provides a theoretically informed answer. It ends with a call to revise articles 311 and 312 TFEU so as to grant fiscal powers to the EU