The EU I like is an EU that does boring jobs well and that doesn’t talk much about them. We don’t, for example, need any spin-doctoring to know that the EU runs a world-class competition policy.

Where the EU has gone wrong in the last two decades is with the acquisition of competencies without competence. Austerity was evil, but it was also stupid. The European Commission should never have accepted responsibility for buying vaccines without formal treaty change to give it the powers and the means to do the job properly. 

When people are out of their depth, they deflect. I often cite the €315bn Juncker investment fund as an example of hype with nothing to show for it. I fear the EU’s commitment to a 55% reduction in CO2 emissions targets - after a previously agreed 40% - will end up as another example of hot air. Businesspeople understand that targets are meaningless unless you know how to reach them. There was a time when European leaders and Commission officials used to think along the same lines. But modern politicians don’t. They can exist happily in an etheric field of smoke and mirrors, a parallel reality in which the targets exists in their own right.

The same goes for the EU’s other climate target - that 30% of all EU expenditures be allocated to green projects. If you took this target seriously, you would have to reform the Common Agricultural Policy. But the EU failed to do precisely that when they had an opportunity last year. Instead, the EU resorts to cheating. The European Commission classifies investment in terms of 0%, 40% and 100% green content, and rounds up the numbers to the next higher target. So 1% becomes 40%. 41% becomes a 100%.

Targets matter because courts can enforce them. That happened in Germany when the government failed to overturn diesel bans imposed by local authorities. But on their own, they create resentment while not solving the problem. The heavy lifting comes from technology investments. A 40% climate reduction backed by a long-term investment strategy into green research and development would produce better results than a 55% target on its own. So would a properly enforced 20% climate expenditure share.

The EU missed the opportunity to become a world leader in digital technology. It has a large pharmaceutical industry, but is not the leader in next-generation medicines.

But the EU has an opportunity to emerge as a world leader in climate change technology. We Europeans are engineers and applied scientists, but it is not the targets that will get us there. We need investment.

As we reported in Eurointelligence last week, private sector investment in the eurozone has been cut in half since the onset of the pandemic. While governments have provided income support and credit lines to those who were affected by the crisis, public sector investment has failed to plug this gap, as ECB data show. The EU’s recovery fund addresses the investment squeeze directly, but constitutes only a tiny proportion of the money that has been lost. The latest US data show that domestic corporate investment also plummeted, but recovered quickly and strongly.

The best thing for the EU to do is exactly what EU leaders rejected during the July summit: provide capital to companies instead of loans. And give companies generous investment write-offs to reduce their corporate tax liability. The recovery fund is focused mostly on public-sector investment, which is important too. But the heavy lifting will come from the private sector.

The European Commission last year proposed a pilot project to allow equity-style investments. The European Council killed it, along with other programmes, to safeguard the headline total for the recovery fund. You can always rely on EU leaders to put appearances ahead of content.

After the eurozone crisis, it took a long time for investments to recover. It happened eventually, but the pandemic wiped out the gains. As happened last time, governments will struggle to step up investments and create an investment-friendly business environment, because they are hamstrung by fiscal rules. They have also made little progress towards a long-overdue capital markets union that would allow the venture capital sector to channel excess savings into next generation start-ups.

Reform of fiscal rules, a capital markets union, and changes in tax rules would produce more environmental investments and employment than a senseless competition for numerical climate change targets.

I also don’t believe this charade will work politically. When the mendacity of the EU’s climate policy becomes apparent, the centre will not only have lost the victims of the economic crisis, but an entire generation of young voters.

This is the thing with smoke and mirrors: when the smoke lifts, you see clearly.