Joint statement
The next EU budget should ensure that public money does not fund activities that undermine environmental objectives. As such, Finance Watch supports the holistic application of the do no significant harm principle across the 2028 to 2034 MFF. It should function primarily as a safeguard against environmentally harmful spending and be applied with simpler and more consistent guidance across EU programmes.
Finance Watch welcomes the European Commission’s proposal to apply the do no significant harm principle across the next EU budget. This is a step towards aligning EU public money with environmental objectives. But experience so far shows that DNSH has been applied unevenly across EU programmes and funds, with varying guidance and requirements creating undue complexity.
The DNSH should be used first and foremost as a mechanism to exclude environmentally harmful activities from EU funding, rather than as a tool for ranking or promoting the best-performing green projects. The Commission should clarify how the six environmental objectives from the EU Taxonomy apply in public finance, set out clearer compliance criteria, and provide practical examples to reduce legal uncertainty and inconsistent interpretation.
Finance Watch also calls for a more coherent framework for implementing DNSH across the EU budget. EU level guidance should be combined with programme-specific annexes, a common methodology for assessing compliance, and a proportionate approach that reduces burdens for implementing authorities and smaller recipients of EU public money. Equally, compliance with DNSH should not only be assessed in advance but also followed up through stronger reporting and ex post evaluation, so that the effectiveness of DNSH can be verified in practice. In short, if applied clearly and consistently, DNSH can help prevent EU money from supporting activities that work against the transition.
