One Competitiveness Fund to rule them all – the Commission’s considered R&I overhaul

An internal EU Commission proposal to lump research, innovation, and strategic spending into a European Competitiveness Fund (ECF) in the 2028-2034 budget has experts excited but wary of 'prohibitive' governance needs and 'planning economy' risks.

The document, seen by Euractiv, presented internally in the Directorate-General for Budget, proposes a major shift in how EU funding is managed and allocated to enhance competitiveness. 

It suggests “a scenario” in which all Horizon Europe initiatives and sector-specific programmes like EU4Health or the Innovation Fund are replaced with “one large consolidated fund for competitiveness” and a “single rulebook.”  

“[The ECF proposal] is potentially very promising, but the amount of reorganisation and governance savviness that has to go into this is almost prohibitive,” Andrea Renda, adjunct professor of digital policy and director of research at the Centre for European Policy Studies (CEPS) told Euractiv.

The ECF was referenced in the mission letters of commissioner-designates published in September, outlining European Commission President Ursula von der Leyen’s vision for their roles. 

“Discussions are ongoing in DG Budget on the basis of the political guidelines drawn up by the president,” but no proposals will be disclosed until the middle of next year, Commission spokesperson Eric Mamer said on Monday (7 October) when asked about the ECF plan.  

Meanwhile, in their questions to the commissioners, MEPs are set to want specifics on the “economic logic” underpinning the ECF, according to documents seen by Euractiv.  

“The mother of all EU institutions” 

The pillars would be "updated annually for continued coherence," in stark contrast to previous long-term budgets, where spending caps for 530 member state programmes and "competitiveness" budget posts are set for seven years at a time.

Renda finds the coherence aspect promising but worries about the governance skills needed to manage “the mother of all EU institutions.”

“[The reform] smells a little too much of planning economy and with no obvious role for genuine market-based innovation,” he said.

Another concern is that a more top-down hierarchy will make funding decisions more political and less technical.  

“The political decision making should not overtake [expert advice], and we need to do our best to enable that market mechanisms work,” the CEO and President of VTT, a state-owned Finnish research institution, Antti Vasara, told Euractiv.  

Overall, “what is being aimed at sounds sensible,” he said. Europe lacks technology-focused investments that could bridge research and industry, and the reform could create a “more balanced portfolio,” Vasara said.  

Commissioner salad 

Tech policy will be managed by a maze-like organogram of new commissioners, with Executive Vice-President-designate (EVP) for Tech Sovereignty, Security and Democracy Henna Virkkunen in a leading role. 

According to the mission letters, the ECF is listed under EVP for Prosperity and Industrial Strategy Stéphane Séjourné. 

Séjourné and Virkkunen “will need to work together because the whole thing is too big for one of them to grab it from the other,” Renda said.

Some are concerned that the 'strategic overlaps' of commissioner portfolios is a way for von der Leyen to consolidate power. 

[Edited by Eliza Gkritsi/Martina Monti]