On Tuesday 21 April, the European Parliament’s co-rapporteurs, Christian Ehler (EPP, German) and Dan Nica (S&D, Romanian), published their draft report on the European Competitiveness Fund (ECF), which will have a budget of €410 billion according to the Commission’s July 2025 proposal in the draft Multiannual Financial Framework.
As the German rapporteur explained on LinkedIn, this draft report aims to answer the questions that the Commission left unanswered in its proposal on the ECF.
“Europe stands at a decisive moment as the competitiveness of our economy is eroding and we must face new challenges in the areas of defence, resilience, and economic security. The investment needs for the digital and net-zero transition are enormous”, he writes.
The aim of the ECF is, among other things, to establish an investment capacity to support European competitiveness through “activities that have a Union added value” in strategic technologies, infrastructures (including research and technology infrastructures), products, services and sectors. “It will promote the creation, collaboration and expansion of innovation, private finance and industrial ecosystems”, says the project.
Among other things, the draft report proposes a definition of competitiveness, which is lacking in the current proposal, “focussed on the economic core of the concept – productivity – as a core anchor” of economic realities in the proposal. “The intervention logic that is necessary to justify spending public money across the different sectors then derives directly from this definition. Funds cannot be spread thinly across too many topics just to please everyone”, justifies the MEP.
This definition “requires a level playing field for European industry compared to global competitors in terms of the cost of doing business, including by making it easier to invest, lowering energy costs, enhancing productivity, boosting innovative capacity and increasing long-term public investments, and which requires a skilled workforce, which should lead to quality jobs and sustainable growth across the whole Union”.
The draft report also proposes strengthening the link between the ECF and the Horizon Europe Research Framework Programme. “The two programmes need to be tightly linked to create pathways for European research excellence to be translated into real-world use and increased competitiveness for European companies”.
The latter must “reap the rewards of European research excellence. Consequently, the implementation of Pillar II of Horizon Europe should not be subjected to the ECF Governance, but rather independent and expert-led”.
The main objective of the close link between the ECF and Horizon Europe is to establish clear pathways for the deployment, commercialisation, scaling-up, licensing, standardisation, application or other forms of transfer of cutting-edge innovations from the Framework Programme to concrete applications.
European DARPA. For the specific defence research programme to be implemented by the ECF, the report proposes a “European DARPA as well as the continuation of conventional collaborative defence research” inspired by the US Defence Advanced Research Projects Agency (DARPA) programme.
Special treatment for Digital Leadership. “We cannot afford to wait 18+ months for over-prescriptive work programmes to be formulated and adopted, only to then find that they no longer reflect market realities, as the market has long moved on. We therefore propose an approach in which teams of programme managers are entrusted with the implementation of a part of the Digital Leadership window”.
According to the draft report, these work programmes for Digital Leadership should set out only the budget, objectives, and areas of interventions, while teams of programme managers operating in a portfolio approach should implement the activities. These programme managers must be experts in the field, selected for their expertise.
For some political groups, it will be important that the Commission does not concentrate power excessively in its own hands by being too flexible. Some also regret that half of the Fund is devoted to defence, space and security.
For others, the battle will be about the balance between project excellence and geographical location, when, under the guise of excellence, a selection of projects is emerging that may be located mainly in member countries with greater resources than others. In any case, according to certain groups, supporting projects that will not contribute anything to society must be avoided.
For further information: https://aeur.eu/f/lma (Original version in French by Solenn Paulic)