Last Thursday, April 30, we took part in a working breakfast organized in Madrid by Climate Strategy & Partners, together with the Spanish Group for Green Growth, focused on opening the debate on Spain’s priorities in the negotiations for the next Multiannual Financial Framework (MFF) of the European Union.
At a time of profound redefinition of European priorities around competitiveness, the clean transition, strategic autonomy, and cohesion, the design of the next MFF will be decisive in determining what kind of growth is promoted in Europe and how the necessary financing will be mobilized to make it a reality.
A timely debate on ambition, design, and implementation
The discussion highlighted a clear consensus: the volume of resources is critical, but the design of instruments is even more so. Experience from previous budget cycles and from the implementation of funds such as InvestEU, LIFE, or the financial instruments of the Recovery and Resilience Facility shows that increasing budgets alone is not enough if structural barriers to access, execution, and strategic alignment are not addressed.
From this perspective, the debate was structured around three key questions: How can the connection between the European level and national and regional implementation be improved? How can the MFF simultaneously strengthen competitiveness, climate transition, and social impact? What design changes would help mobilize more private investment, especially for SMEs and projects with complex financial structures?
Key reflections from the SpainNAB perspective
At SpainNAB, we contributed once again to the dialogue by focusing on the role of sustainable and impact finance as a lever to maximize the effectiveness of the European budget. In particular, we highlighted several key elements:
- Prioritizing impact alongside spending. The next MFF should strengthen a results-oriented investment logic by explicitly incorporating climate and social impact criteria into the design of financial instruments. Integrating these dimensions from the outset—rather than as ex post requirements—would help channel capital toward projects aligned with EU climate and social objectives, increasing their attractiveness to private investors.
- Overcoming bottlenecks for SMEs and entrepreneurs. One of the main challenges identified is the limited access of SMEs, innovative companies, and early-stage projects to European financing. Current instruments work reasonably well for large-scale operations but lose effectiveness when it comes to smaller ticket sizes, blended structures, or initiatives with higher perceived risk. In this context, it is essential to move toward more flexible solutions, from intermediated platforms and co-investment vehicles to blended finance schemes better adapted to local and sectoral realities.
- Financial Instruments as a Service and multiplier effect. The potential of financial instruments designed as services—known as Financial Instruments as a Service (FIaaS)—was highlighted as a way to reduce administrative complexity, accelerate implementation, and increase the leverage effect of EU funds. This approach can be particularly relevant for Member States and regions with lower technical or financial capacity, as well as for facilitating pan-European investment.
- Coherent and visible national implementation. Another central element is the need to strengthen the link between the MFF and national and regional implementation through clear, coherent, and communicable plans that facilitate both the absorption of funds and the participation of the private sector. Greater alignment between European priorities and national strategies helps reduce uncertainty and improves the channeling of investment toward strategic value chains.
Reclaiming all the “dimensions” of the transition
One of the cross-cutting messages of the debate was that European competitiveness is inseparable from the energy transition. However, it was also noted that, in the effort to accelerate this transition, the “digital” dimension has gradually been sidelined, despite digitalization remaining a key enabler of efficiency, innovation, and the scaling of clean solutions.
From the SpainNAB perspective, we add another equally relevant question: where does the “just” dimension stand in the current debate on financing the transition? Too often, the discussion focuses on investment volumes, financial instruments, or absorption capacity, risking relegating social impacts, job quality, access to finance for SMEs and vulnerable regions, and the need for the transition to generate inclusive opportunities across the entire value chain.
Accelerating the transition is essential, but doing so in a sustained, inclusive, and socially legitimate way requires integrating these dimensions from the design phase of financial instruments, not as secondary considerations. The explicit incorporation of social impact, alongside climate and economic impact, is precisely one of the areas where sustainable and impact finance can bring the greatest value to the next MFF.
