Introduction An EU Future Fund would be a key tool for managing the decarbonisation of our economies actively and democratically. The socio-ecological transformation affects economic sectors such as industry and manufacturing, which at present are overwhelmingly well organised, have codeter­mination and are covered by collective bargaining. That ap­plies not only to Germany, but also other countries. An EU Future Fund would make it possible to strengthen Member States’ ability to tackle the transformation and ensure decent jobs and sustainable prosperity. The socio-ecological trans­formation could thus itself be transformed from a primarily regulatory, market-based and national level approach into a project for European growth, which would lead to a better economic future and thus also restore political trust. The strategic public investments we are calling for represent a sensible corrective to the economically and politically counterproductive fiscal austerity, which both Germany and the EU embarked on in 2023. The ruling of the Federal Constitutional Court on replenish­ing the Climate and Transformation Fund(CTF) plunged Ger­many into a budgetary crisis in 2023, to which the federal government responded with austerity measures, initially to the value of 23 billion euros. The effects on the 2024 budget were not as bad as had been feared, but they did mean that a substantial portion of the Fund’s reserves were used up. From 2025 at the latest far fewer resources will be available, raising the prospect of further drastic cuts. Besides the polit­ical costs of months of consultations the cuts have also con­stricted support measures within the framework of the transformation(such as the environmental bonus for e-vehi­cles) and a lack of money for planned investments in the de­carbonisation of buildings, industry and SMEs up to 2027. Budget cuts therefore put the brakes on the transformation and also lead to massive uncertainties with regard to plan­ning at the affected companies and for their employees. In order to get to grips with the historic task of trans­formation in a rapidly changing world and to ensure sustainable competitiveness for the Single Market, we recommend a European and future-oriented fi­nancial policy answer to enable the needed invest­ment push, in particular for the period from 2027. In a first step this paper explains the necessity for additional in­vestments for climatic,(geo-)economic and democratic rea­sons and outlines the scope of what is needed at European level in the context of the current fiscal policy status quo. We then develop a concrete but politically malleable model for an EU Future Fund from 2027. We recommend priority sectors and possible instruments for investments, estimate the necessary public investment needs and suggest ways of funding it and ensuring legal compliance, as well as meth­ods of disbursement and governance for an EU Future Fund. Given the well-known obstacles and opposition to progres­sive fiscal reforms in Germany and Europe the paper then lays out a possible political path to making it happen. In parallel with all this the EU institutions reached a compromise on reforming EU fiscal rules(the so­called Stability and Growth Pact), which will oblige the Member States from next year to pursue fiscal consolidation, without significant exemptions for public investments, for example, in the ecological and digital transformations. Because public investments are typically the easiest budget items to cut this approach will damage the economy, as well as both productivity and com­petitiveness. Beyond these economic effects it will not re­duce debt levels sustainably, quite apart from its political risks and long-term rising environmental costs. Further­more, Germany’s austerity course will affect future EU budgetary policy because the Federal Government is now under pressure to replenish the Climate and Transformation Fund even more than had been planned with resources from EU emissions trading system. Besides the spending al­ready earmarked for the EU Climate Social Fund(Busch/ Harder 2024) these funds thus cannot – as originally intend­ed – be fully used as additional EU own resources for the EU budget without conflicting with national priorities(for ex­ample, to repay what was borrowed for the Recovery Fund or for new investments). 3