An EU Future Fund: key building blocks and options 4 AN EU FUTURE FUND: KEY BUILDING BLOCKS AND OPTIONS Against this background we propose a joint fund to en­sure a sustainable European future in the ecological, eco­nomic and political domains. The focus of the EU Future Fund should be on making public resources available to help the private sector and Member States in the so­cio-ecological restructuring of their economies, in par­ticular with respect to those investment projects that pro­vide European added value. The EU Future Fund, in addi­tion to combating climate change, would thereby make an important contribution to enhancing the unity of the Single Market and ensuring the sustainability of its global competitiveness for the future, and last but not least con­tributing to democratic stability. The new fund should be launched latest with the expiry of the Recovery and Resilience Facility at the end of 2026. The duration of the EU Future Fund should at least cover the period of the next Multiannual Financial Framework, in other words, from 2027 to 2034. This would guard against too drastic cuts in public investment programmes in view of the new fiscal rules and depleting EU coffers. Ideally, the Fund could be established from the outset with a duration up to 2050 in order to align with the EU’s declared policy objective of achieving climate neutrality by then. As the next few sections describe, an EU Future Fund should, in our view, account for at least 1 per cent of EU GDP per year in order to close the existing investment gaps within the framework of an intelligent division of tasks between the Member States. The support instru­ments should contain both incentives for private invest­ments and direct public investments and can be disbursed in a variety of ways both to Member States and directly to firms. Regardless of the precise legal basis, limited Mem­ber State contributions enhance the importance of new EU own resources, both for the repayment of NextGener­ationEU loans and for enabling sufficient new invest­ments via the issuance of EU bonds, which appears to be indispensable given the scale of the gaps. Lessons for the governance of the Fund should be drawn from experience with the Recovery and Resilience Facility and other exist­ing EU programmes. Clear social conditionalities and an effective involvement of parliaments and social partners should be ensured. 4.1  OF INVESTMENT AND THE COHERENCE OF EUROPEAN ­INVESTMENTS Given the enormous public investment needs for a sustainable transformation of the Single Market of up to over 4 per cent of EU GDP an intelligent division of labour between national and European level will be essential in future European investment policy. An EU Future Fund of course cannot close all investment gaps si­multaneously, but it should help Member States above all in funding strategic investments. The European level should be used to tackle acute financing problems at national level for investments in strategic areas of clear transnational eco­nomic added value. The current policy of restricting nation­al budgets in the EU must therefore be accompanied by a jointly prioritised investment policy in order to ensure that an excessive focus on spending cuts does not result in cur­tailed growth and delayed transformation costs. This would contribute decisively to ensure fiscal sustainability in the Sin­gle Market in the medium term. Defining which investments are to be’European stra­tegic investments’ in the future should be part of a structured political negotiation process between the Member States and the EU institutions. Ideally, this is­sue should also be the object of the European economic policy coordination process, at the centre of which is the Eu­ropean Semester. The European Commission and the Mem­ber States should decide jointly which investment projects have European added value and are in the EU’s strategic long-term interests, and should thus receive EU-level fund­ing. In other words, which investment projects should be implemented at national, regional and municipal level and how the necessary fiscal policy leeway could be created through tax policy reform. We can hone in on the areas of EU strategic invest­ment by means of existing decisions and EU law. In general, the EU has most legislative competence in relation to the Single Market, so this is where the focus of joint in­vestment efforts should(continue to) lie. In the context of reform of the EU fiscal rules, for example, various EU eco­nomic policy priorities were laid down in the regulation on the preventive arm of the Stability and Growth Pact. Particu 13