MEPs back a new fund to boost Europe’s competitiveness

MEPs on the Committee on Industry, Research and Energy adopted their position (61 votes in favour, 13 against and 12 abstentions) on the European Competitiveness Fund (ECF), which aims to strengthen European competitiveness in strategic sectors for the period 2028–2034.

Renamed and restructured policy areas

The European Funding Mechanism (EFM) brings together 14 existing EU funding instruments under four action lines. In their amendments, MEPs on the committees propose renaming three of these instruments, emphasising the industrial and economic security dimension of competitiveness. They call for a specific budget allocation and governance structure for critical raw materials, as well as a section dedicated to energy infrastructure.

They propose increasing the total budget of the EIF to 264,350 million euros at current prices (compared with the 234,300 million euros in the Commission’s proposal), with detailed binding minimum allocations by policy period and sub-sections. MEPs suggest introducing a new flexibility reserve of €10,110 million to enable the Fund to respond to unforeseen challenges.

Defence research and innovation

MEPs on the Committee on Industry are calling for a specific programme for defence research, development and innovation. They suggest that it should focus on three distinct instruments: a flexible, preventative defence research programme; a blended finance facility for start-ups and scale-ups in the defence sector developing disruptive technologies; and an instrument to fund collaborative applied research linked to capability priorities.

MEPs propose a clear definition of the concept of ‘competitiveness’, centred on the ability of European companies to compete successfully in global markets. They also provide definitions of the key concepts of strategic dependencies and resilience.

The committee also proposes replacing the Commission’s single ‘Strategic Stakeholders’ Council’ with several new and independent governance bodies. The text also calls for the creation of ‘Horizon Europe Pathway actions’, a specific mechanism to translate the research results of Horizon Europe into market applications.

Housing, energy communities and social investment

They propose a new article on the ECF InvestEU instrument, which provides support for sustainable construction and the manufacture of clean technologies for housing, the energy-efficient refurbishment of buildings, renewable energy and citizen-led energy communities, and social investments. The maximum guarantee for this instrument should be €150,000 million (the Commission proposed reducing it to €70,000 million).

Quotes

“Our position introduces significant improvements on the Commission’s proposal, which lacked effective governance and clear political direction. We have supplemented the definition of competitiveness with a basis in economic reality and propose a governance structure grounded in experience and greater coordination with Member States. Parliament also proposes reforming the link between Horizon Europe and the EFC. Finally, the restructuring of the policy strands in the compromise clarifies the opportunity cost. A budget so opaque that it allows for the funding of anything sounds good in theory, but has practical consequences: a euro allocated to one priority cannot be reallocated to another. “Through a flexibility reserve of 10,000 million euros, we are making flexibility both visible and viable within a modernised budget,” said co-rapporteur Christian Ehler (EPP, Germany).

“Europe needs to take control of its future, and that starts with energy: without affordable and reliable energy, there is no European industry. That is why we have dedicated a specific section to energy infrastructure in this Fund,” said co-rapporteur Dan Nica (S&D, Romania).

“We are also equipping the Fund with the necessary resources to meet its ambitions: a larger budget, a stronger InvestEU guarantee, a specific budget line for critical raw materials and a direct pathway from European research to European factories. This is how we rebuild our industrial base, reduce our strategic dependencies and ensure that the technologies of the future – from clean technologies to defence – are manufactured in Europe,” he added.

Next steps

MEPs also voted in favour of opening negotiations with EU governments by 56 votes to 26, with four abstentions. The committee’s position and the mandate for the negotiations are expected to be announced for approval at the plenary sessions from 23 to 26 November.

Background

The legislation forms part of the EU’s long-term budget package (LTP) for the period 2028–2034. Parliament wants the budget to remain a robust investment tool that supports citizens, regions and businesses, whilst generating clear added value beyond national budgets. MEPs propose increasing the size of the draft budget to tackle new challenges and stress the importance of new sources of revenue to fund an ambitious and sustainable budget.