An EU Future Fund: key building blocks and options (which were also used as guarantees for the issue of NGEU bonds). In addition, it would remain the case that the maxi­mum total amount of the bond issue would have to be spec­ified from the outset in a reformed own resources decision. Another disadvantage of the NGEU model is that the estab­lishment of a special fund would create another executive budget instrument between the EU Commission and Mem­ber State governments, which would largely exclude both national parliaments and the European Parliament. 5 The ad­vantage of the construction as part of the EU budget, by contrast, would be that the European Parliament as directly elected European legislator would have a key role in the management and control of financial resources(as would the European Court of Auditors). Furthermore, the extent to which a refinancing of EU bonds(rollover) could be achieved in this model should be examined in more detail. If Grund and Steinbach’s(2023) cautious initial legal assessment is confirmed, this would have further positive consequences for loan costs and private capital markets and thus ultimate­ly for realisable investment sums. In addition to EU law, the German Constitutional Court should also be taken into account. It sets fur­ther guidelines that would probably affect the design of an EU Future Fund. Although in principle, of course, the Federal Constitutional Court is not the ultimate arbiter of the legality of European policies, but rather the European Court of Justice, nevertheless Karlsruhe plays a key political role. It does not always see itself as subordinate to the CJEU in terms of jurisdiction and remains of central importance by reviewing the transfer of further competences to Brussels (including ratification of, for example, a reformed Own Re­sources Decision, as would in any case be necessary for an EU Future Fund). The latest judgment issued by the Federal Constitutional Court on the Climate and Transformation Fund in 2023 does not erect any insurmountable hurdles here. It is exclusively related to German budget manage­ment and does not expressly go into whether and to what extent the climate crisis is beyond‘the control of the state’. The Court does agree, however, that the consequences of long foreseeable crises should not be financed with emer­gency loans. With regard to the climate crisis it can at least be said that it is beyond the control of a single state(as the Federal Constitutional Court also recognised in its climate ruling) and that at least the severe consequences of climate change were not fully foreseeable. In our view, it has not been conclusively clarified to what extent this view of the court could have consequences for the use of Art. 122 as the legal basis for a new bond-financed EU investment pro­gramme. As things stand, we see this as another possible downside of replicating the NGEU model. The Federal Con­stitutional Court’s so-called‘St Nicholas judgment’ of 2022 remains the most restrictive, but the conditions laid down in it can also be taken into account legally. According to the ruling, the central prerequisites for an EU bond issue are the determination of an exceptional situation, primary legal cov­er, the earmarking of the expenditure and its limitation in terms of duration and amount. The Bundestag’s overall budgetary responsibility and the fact that the scope of the liabilities must be set out in advance can also be taken into account by structuring the responsibility for repayment of EU bonds pro rata(instead of as a pan-European liability), as was also the case with the NextGenerationEU scheme(see Grund and Steinbach 2023). The European Central Bank should also do everything possible to keep the interest costs of the EU Future Fund as low as possible and to promote its bonds as a secure basis for the EU capital market. ECB support for the Fund’s objectives would be helpful and perfectly legal based on the ECB’s secondary mandate, which requires it to support the EU’s general economic policy objectives, and on the EU Future Fund’s explicit objective of reducing energy prices. In practical terms, it would make sense to integrate the issued EU bonds in the Eurosystem’s collateral frame­work; in other words, these securities should be accepted as collateral for further credit transactions that the ECB Execu­tive Board might enter into. This would underwrite demand for them by hedging private financial transactions and re­duce the financing costs of the EU Future Fund without the ECB having to actively buy the EU bonds itself(for the histo­ry of the ECB’s collateral framework and the macroeconom­ic impact of its changes, see Schuster& Sigl-Glöckner 2023). On top of that, an EU bond issue for a Future Fund would fill the lack of a standardised secure bond, a central void in the euro area, without which the European capital market can­not properly develop. This would be all the more important if an EU bond were exempt from the legal prohibition on re­financing that applies within the framework of NextGenEU, thereby providing a permanent basis for standardised Euro­pean financial markets, as government bonds do in the United States or Japan, for example. Use of such a bond to strengthen the European financial market and enhance its stability would also give the ECB justification to protect the interest costs of this EU bond from speculation through(at least announced) bond purchase programmes. Such ECB support for European economic policy could also be pro­moted by an interinstitutional agreement with the European Parliament, within which the Parliament could push ahead with firming up the secondary mandate in this direction, as it is explicitly permitted to do. 4.4  GOVERNANCE 5 Although the European Parliament was closely involved in determin­ing the content of the current special fund – the Next Generation EU recovery programme – the Parliament’s say in its implementation(as in the European Semester with regard to macroeconomic coordina­tion as a whole) is minimal compared with the EU Commission and the governments, and is essentially limited to notifications, consulta­tions and non-binding resolutions(Vanhercke and Verdun 2021; EGOV 2022; Bokhorst and Corti 2023). A targeted, more efficient and more transparent flow of resources is key to the success of an EU Future Fund. To that end, the right lessons need to be learned from the implementation of the Recovery and Resil­ience Facility. In the model of the Recovery and Resilience Facility the disbursement of funds was made dependent on whether the Member States that had implemented reforms 19