COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT on the European Competitiveness Fund Accompanying the documents Proposal for a Regulation of the European Parliament and of the Council on establishing the European Competitiveness Fund ('ECF’), including the specific programme for defence research and innovation activities, repealing Regulations (EU) 2021/522, (EU) 2021/694, , (EU) 2021/697, (EU) 2021/783, repealing provisions of Regulations (EU) 2021/696, (EU) 2023/588, and amending Regulation (EU) [EDIP]

EN EN
EUROPEAN
COMMISSION
Brussels, 16.7.2025
SWD(2025) 555 final
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
on the European Competitiveness Fund
Accompanying the documents
Proposal for a Regulation of the European Parliament and of the Council
on establishing the European Competitiveness Fund ('ECF’), including the specific
programme for defence research and innovation activities, repealing Regulations (EU)
2021/522, (EU) 2021/694, , (EU) 2021/697, (EU) 2021/783, repealing provisions of
Regulations (EU) 2021/696, (EU) 2023/588, and amending Regulation (EU) [EDIP]
Proposal for a Regulation of the European Parliament and of the Council
establishing Horizon Europe, the Framework Programme for Research and Innovation,
for the period 2028-2034 laying down its rules for participation and dissemination, and
repealing Regulation (EU) 2021/695
Proposal for a Council Decision
on establishing the Specific Programme implementing Horizon Europe - the Framework
Programme for Research and Innovation for the period 2028-2034, laying down the
rules for participation and dissemination under that Programme, and repealing
Decision (EU) 2021/764
{COM(2025) 543 final} - {COM(2025) 544 final} - {COM(2025) 555 final} -
{SEC(2025) 555 final} - {SWD(2025) 556 final}
Offentligt
KOM (2025) 0555 - SWD-dokument
Europaudvalget 2025
1
Table of Contents
1. INTRODUCTION: POLITICAL AND LEGAL CONTEXT .................................................................... 7
2. PROBLEM DEFINITION .................................................................................................................. 10
2.1. What are the problems?................................................................................... 10
2.2. What are the problem drivers?........................................................................ 13
3. WHY SHOULD THE EU ACT? ........................................................................................................ 27
3.1. Legal basis....................................................................................................... 27
3.2. Subsidiarity: Necessity of EU action .............................................................. 27
3.3. Subsidiarity: Added value of EU action ......................................................... 28
4. OBJECTIVES: WHAT IS TO BE ACHIEVED? ............................................................................... 29
4.1. General objectives........................................................................................... 29
4.2. Specific objectives .......................................................................................... 29
4.3. Problem tree .................................................................................................... 30
5. WHAT ARE THE AVAILABLE POLICY OPTIONS? .................................................................... 30
5.1. What is the baseline from which options are assessed?.................................. 30
5.2. Description of the policy options.................................................................... 31
5.3. Options discarded at an early stage................................................................. 32
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ........................................................... 32
6.1. Baseline scenario............................................................................................. 32
6.2. Assessment of the three options...................................................................... 36
7. HOW DO THE OPTIONS COMPARE?............................................................................................ 43
7.1. Effectiveness ................................................................................................... 43
7.2. Efficiency........................................................................................................ 45
7.3. Coherence........................................................................................................ 48
8. PREFERRED OPTION ...................................................................................................................... 49
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?.................................. 49
Annex 1: Procedural Information ............................................................................. 50
Annex 2: Stakeholder consultation (Synopsis report)............................................... 57
Annex 3: Who is affected and how?......................................................................... 72
Annex 4: Analytical Methods ................................................................................... 77
Annex 5: Competitiveness check.............................................................................. 81
Annex 6: SME check ................................................................................................ 83
Annex 7: Synergies between Horizon Europe and other EU programmes............... 87
Annex 8: Summary of the 14 programmes under scope........................................... 88
Annex 9: Overview of the current time to inform and time to grant per programme109
2
Abbreviations
Acronym / Abbreviation Explanation
AI Artificial intelligence
ASAP Act on Supporting Ammunition Production
CAPEX Capital expenditure
CBA Cost-benefit analysis
CCS Carbon capture and storage
CEF Connecting Europe Facility
CINEA European Climate, Infrastructure and Environment Executive Agency
COMP (DG) Competition
COSME Competitiveness of Enterprises and Small and Medium-sized Enterprises
CPR Common Provisions Regulation
DEFIS (DG) Defence, Industry, and Space
DEP Digital Europe Programme
DG Directorate-General
DIGIT (DG) Digital Services
EC European Commission
ECA European Court of Auditors
ECF European Competitiveness Fund
EDF European Defence Fund
EDIP European Defence Industry Programme
EDIRPA European defence industry reinforcement through common procurement act
EDTIB European Defence Technological and Industrial Base
EFG Equity Facility for Growth
EFSI European Fund for Strategic Investments
EIB European Investment Bank
EIC European Innovation Council
EIF European Investment Fund
ELENA European Local Energy Assistance
ERC European Research Council
ERDF European Regional Development Fund
ESA European Space Agency
EU European Union
EUDIS EU Defence Innovation Scheme
FISMA (DG) Financial Stability, Financial Services and Capital Markets Union
FP Framework Programme
GDP Gross Domestic Product
GROW (DG) Internal Market, Industry, Entrepreneurship and SMEs
HADEA Health and Digital Executive Agency
HE Horizon Europe
HOME (DG) Migration and Home Affairs
IA Impact Assessment
ICT Information and communication technologies
3
Acronym / Abbreviation Explanation
IEA International Energy Agency
IF Innovation Fund
INTPA (DG) International Partnerships
IP Intellectual property
IPCEI Important Project of Common European Interest
IRIS² Infrastructure for Resilience, Interconnectivity and Security by Satellite
ISSG Interservice Steering Group
JASPERS Joint Assistance to Support Projects in European Regions
JRC Joint Research Centre
JU Joint Undertaking
JUST (DG) Justice and Consumers
LIFE Programme for the Environment and Climate Action
LLM Large language model
MARE (DG) Maritime Affairs and Fisheries
MFF Multiannual Financial Framework
MSCA Marie Skłodowska-Curie Actions
OECD Organisation for Economic Co-operation and Development
OPEX Operational expenditure
PC Public Consultation
PPP Public-Private Partnership
R&D Research and development
R&I Research and innovation
RRF Recovery and Resilience Facility
RRP Recovery and Resilience Plan
RSB Regulatory Scrutiny Board
RTD (DG) Research and Innovation
SDG Sustainable Development Goal
SME Small and Medium Enterprise
SMP Single Market Programme
SSH Social sciences and humanities
STEM Science, technology, engineering and mathematics
STEP Strategic Technologies for Europe Platform
SWD Staff Working Document
TFEU Treaty on the Functioning of the European Union
TRL Technology Readiness Level
TTG Time-to-grant
TTI Time-to-inform
US United States
4
Glossary
Term Meaning or definition
Applicant Legal entity submitting an application for a call for proposals.
Application The involvement of a legal entity in a proposal. A single applicant can make several
applications in different proposals. A single proposal can include several
organisations and, therefore, several applications.
Blue economy Any economic activity relating to oceans and seas.
Circular economy A model of production and consumption, which involves sharing, leasing, reusing,
repairing, refurbishing and recycling existing materials and products as long as
possible. In this way, the life cycle of products is extended, their use is optimised, and
products and materials are maintained in their highest value function
Critical raw materials Raw Materials defined as critical in the regulation according to the proposed
methodology (i.e. supply risks and economic importance)
European Investment
Council (EIC)
The EIC was established under the Horizon Europe programme. It has a budget of
EUR 10.1 billion to support game changing innovations throughout the lifecycle from
early-stage research, to proof of concept, technology transfer, and the financing and
scale up of start-ups and SMEs.
European Research
Council (ERC)
The European Research Council is a European funding organisation for excellent
frontier research which offers various grant schemes such as: starting grants,
consolidator grants, advanced grants, synergy grants and proof of concept. The ERC
is led by an independent governing body, the Scientific Council.
Equity investment Provision of capital to a firm, invested directly or indirectly in return for total or
partial ownership of that firm and where the equity investor may assume some
management control of the firm and may share the firm's profits
European
Partnerships
European Partnerships bring the European Commission and private and/or public
partners together to address some of Europe’s most pressing challenges through
concerted R&I initiatives. They are a key implementation tool of Horizon Europe,
and some exist also under other EU programmes. There are three types:
• institutionalised partnerships in the field of R&I between the EU, EU Member States
and/or industry (including joint undertakings, Art. 185 partnerships and the EIT
Knowledge and Innovation Communities);
• co-programmed partnerships between the Commission and mostly private (and
sometimes public) partners;
• co-funded partnerships involving EU countries, with research funders and other
public authorities at the core of the consortium
Evaluation criteria According to better regulation guidelines and toolbox, the five evaluation criteria
assess the extent to which an intervention is: 1) effective in fulfilling expectations and
meeting its objectives (effectiveness); 2) efficient in terms of cost-effectiveness and
proportionality of actual costs to benefits (efficiency); 3) relevant to current and
emerging needs (relevance); 4) coherent internally and externally with other EU
interventions or international agreements (coherence); and 5) has EU added value -
i.e. produces results beyond what would have been achieved by Member States acting
alone (EU added value).
GDP multiplier The GDP multiplier is obtained by dividing the cumulative change in GDP by the
magnitude of the policy stimulus and can be understood as the amount of GDP
produced for each euro invested in the policy. It represents the economic effect of the
policy and does not account for other direct and indirect costs.
5
Term Meaning or definition
Grants Non-repayable funds to support specific projects or activities, typically requiring co-
financing from the recipient.
Budgetary Guarantee An instrument through which the European Union supports a programme of actions
by taking on the budget an irrevocable and unconditional financial obligation that can
be called upon should a specified event materialise during the implementation of the
programme, and that remains valid for the duration of the maturity of the
commitments made under the supported programme
Interservice steering
groups (ISSG)
Commission mechanism to ensure internal consistency of policy interventions
Joint undertakings
(JUs)
Public-private institutionalised partnerships of the Union with industry and
stakeholders for the joint funding and implementation of strategic R&I agendas under
Article 187 of TFEU (via a dedicated funding body).
Under Horizon Europe, the JUs include: the Innovative Health Initiative (IHI); Global
Health EDCTP3 Partnership, Europe High-Performance Computing (EuroHPC); the
Chips JU (formerly, Key Digital Technologies, KDT); Smart Networks and Services
(SNS); Circular Bio-based Europe (CBE); the Clean Aviation JU; the Clean
Hydrogen JU; the Europe’s Rail JU; and Single European Sky ATM Research 3
(SESAR 3). EuroHPC and Chips JU also receive funding from other EU programmes
under the scope of this impact assessment (Digital Europe in both cases, CEF for
EuroHPC). A JU solely funded by the Digital Europe Programme also exists, the
European Cybersecurity Competence Centre (ECCC).
Leverage Ratio between the total costs borne by partners other than the EU and the EU
contribution. Leverage of private investment refers to the capacity of EU funding to
attract complementary funding from the private sector.
Raw materials A substance in processed or unprocessed state used as an input for the manufacturing
of intermediate or final products, excluding substances predominantly used for the
production of food and feed or as fuel for the production of energy;
Regional Holistic
Model (RHOMOLO)
Recursively dynamic spatial computable general equilibrium model used to simulate
the impact of EU policies, developed and maintained by the JRC. Main model used
to estimate macroeconomic impacts in the context of the present IA.1
Risk-sharing
instrument
Financial instrument which allows for the sharing of a defined risk between two or
more entities, where appropriate in exchange for an agreed remuneration.
Public procurement Process by which public authorities purchase goods, services, or works from private
sector suppliers, following established rules and procedures.
Seal of excellence A quality label which shows that a proposal submitted to a call for proposals exceeded
all of the evaluation thresholds set out in the work programme, but could not be
funded due to lack of budget available for that call for proposals in the work
programme and might receive support from other EU or national sources of funding.
STEP Seal A quality label aimed at promoting high-quality proposals that contribute to the
objectives or the Strategic Technologies for Europe Platform. It may be awarded to
project proposals that meet all the quality requirements under relevant calls for
proposals under the following programmes: Digital Europe programme, European
Defence Fund, EU4Health, Horizon Europe, and the Innovation Fund. The seal is
1
See Diukanova, O. et al., RHOMOLO-v2 model description – A spatial computable general equilibrium model for
EU regions and sectors, Publications Office, 2016.
6
Term Meaning or definition
meant to certify the quality of such proposal and facilitate cumulative or combined
funding from several EU budget instruments, as well as attracting private finance.
Success rate The percentage of proposals that are selected for funding out of the total number of
eligible proposals expressed as a percentage (Retained proposals/Eligible
proposals*100)
Synergy Synergy occurs when the impact of the results or programmes as a whole is greater
than that of the sum of their individual impacts.
Technology readiness
levels (TRLs)
Technology readiness levels indicate the maturity level of particular technologies
through a common understanding of technology status and address the entire
innovation chain. TRL 1 – basic principles observed; TRL 2 – technology concept
formulated; TRL 3 – experimental proof of concept; TRL 4 – technology validated in
the lab; TRL 5 – technology validated in a suitable environment; TRL 6 – technology
demonstrated in a suitable environment; TRL 7 – system prototype demonstration in
an operational environment; TRL 8 – system complete and qualified; TRL 9 – actual
system proven in an operational environment
Unicorn Privately owned start-up company, which has reached a valuation of $1 billion
(currently about EUR 882 million) or more.
Venture capital Private equity financing that is provided to startups and small businesses with high
growth potential, often in exchange for equity or ownership stakes, with the goal of
achieving significant returns.
7
1. INTRODUCTION: POLITICAL AND LEGAL CONTEXT
1.1. Policy context
Europe is facing a defining period for its future, from a political, economic, social,
environmental and security perspective.
The past few years have been characterised by a highly volatile and complex political context.
Geopolitical instability, especially after Russia's war of aggression against Ukraine; a steep
technological race; rising energy prices; the disruption of supply chains, including critical raw
materials; the COVID-19 pandemic; and demographic changes have all contributed to this. Moreover,
the climate and biodiversity crises are continuing to accelerate. New security threats affecting our
essential services and critical infrastructures are testing the EU’s resilience and call for reinforced
industrial readiness.
In the face of these challenges, the EU has been on a slow productivity growth path since the
beginning of the century. Profound innovation and technology gaps with other advanced economies,
particularly China and the US, have opened up and widened. These undermine the EU’s capacity to
fulfil its own goals, as well as its position in the global arena, hindering its competitiveness, resilience
and autonomy.2
Enhancing the competitiveness of the European Union has emerged as a critical
priority.
European competitiveness, as framed in the European Commission’s Competitiveness Compass3
,
encompasses the EU's capacity to raise productivity growth, high living standards, and strategic
autonomy in a rapidly evolving global landscape. This concept extends beyond the traditional cost-
based competition, emphasising innovation, investment, resilience, and industrial strength,
particularly in green, digital, and key critical sectors.
In a global landscape marked by fast technological progress, increasing economic competition and
trade protectionism, the EU must strengthen its research base to focus more on strategic
priorities, on groundbreaking fundamental research, scientific excellence and disruptive
innovation,4 while improving its productivity, connection with the market and stimulating
growth. Promoting the competitiveness of the EU will require deeper integration and coordination
across Member States; a new approach to industrial sectors and services enabling competitiveness
and economic security; and putting research and innovation, science and technology, at the centre of
our economy. Security – both internal and external – along with resilience and preparedness, are also
pre-conditions for competitiveness and are among the highest political priorities for the European
Commission.5
Reducing dependencies and diversifying value chains across the key areas where
Europe is exposed will require significant investments: Europe heavily depends on imports ranging
from raw materials to advanced technology; around 40% of Europe’s imports are sourced from a
small number of suppliers and difficult to substitute, and around half of these imports originate from
countries with which it is not strategically aligned.6
Finally, greater emphasis should be put on leveraging private sector participation by improving
the use of risk-sharing mechanisms between EU funds and private investors. The objectives of
EU funding and the Savings and Investments Union7
should be mutually reinforcing in unlocking
2
Draghi, M. (2024). The future of European Competitiveness. Part A – A competitiveness strategy for Europe.
3
COM(2025) 30 final, A Competitiveness Compass for the EU.
4
Europe’s Choice. Political guidelines for the next European Commission 2024-2029; page 10
5
Ibid, p.13
6
Draghi, M. (2024). The Future of European Competitiveness: A Competitiveness Strategy for Europe.
7
COM (2025)124 final. Savings and Investments Union. A Strategy to Foster Citizens’ Wealth and Economic
Competitiveness in the EU.
8
additional funding for EU priorities in all Member States by leveraging the impact of public money
and crowding in private and institutional investors. In the European Union, investment culture tends
to be more risk-averse compared to the United States. This is evident in stricter regulatory frameworks
and a preference for conservative financial products, such as bank deposits and bonds, over equities
and venture capital.
European households and institutional investors often exhibit caution, allocating a larger proportion
of their capital to safer assets.8
Risk aversion is further compounded by fragmented capital markets
across EU Member States.
1.2. Scope
The Commission President’s Political Guidelines for 2024-2029 announced the establishment
of a new European Competitiveness Fund under the next Multiannual Financial Framework (MFF)
to invest in strategic technologies critical to European competitiveness to ensure that we develop and
manufacture them in Europe, and support Important Projects of Common European Interest (IPCEI).9
The Guidelines also specified the intention to put research, innovation, science and technology at the
centre of the EU’s economy, increasing our research spending, expanding the European Innovation
Council (EIC) and the European Research Council (ERC), and focusing more on strategic priorities.10
The Competitiveness Compass, adopted by the Commission in January 2025 and based on the
recommendations from multiple expert reports, including Draghi´s on the future of European
Competitiveness11
, identifies several factors needed to boost the EU’s competitiveness: (1) closing
the innovation gap, (2) decarbonisation, and (3) reducing excessive dependencies and increasing
security. Additionally, it highlights five horizontal enablers: (1) simplification, (2) removing barriers
in the Single Market, (3) financing, (4) skills and quality jobs, (5) better coordination.
Simplification, financing and better coordination will be the primary focus of the European
Competitiveness Fund. As such, the European Competitiveness Fund is not the only initiative to
bolster the EU’s competitiveness. It is complementary to many other measures announced in the
Competitiveness Compass12
and the efforts performed by the Member States.
The Compass also diagnoses major problems that hamper competitiveness within the EU, a central
one being that EU spending is spread over too many overlapping programmes, many of which
fund the same thing but with different requirements and difficulties in combining funding
effectively.13
Among its concrete actions for the EU’s future prosperity, the Compass outlines that the European
Competitiveness Fund will take the form of an investment capacity that will support strategic
technologies and sectors critical to the EU competitiveness in the next MFF. It should help to
leverage and de-risk private investments.14
The Clean Industrial Deal15 further confirms that the
Competitiveness Fund would support decarbonisation, mentioning that it will offer strong support to
innovative industry for sustainable investment in the next MFF and a one-stop-shop offering
simplified access to EU funding.
8
IMF blog (2024). Europe can better support venture capital to boost growth and productivity.
9
Europe’s Choice. Political guidelines for the next European Commission 2024-2029, p. 12.
10
Ibid, p.10.
11
Draghi, M. (2024). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
12
e.g., Start-up and Scale-up Strategy, 28th Regime, European Innovation Act, Space Act, Digital Network Act, Clean
Industrial Deal, New State Aid Framework, Revision of Directives on Public Procurement.
13
COM(2025) 30 final, p. 24. A Competitiveness Compass for the EU.
14
Ibid, p. 21.
15
COM(2025)85 final. The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation
9
Stronger policy steer will be ensured via a steering mechanism linking EU priorities with the EU
budget, considering the necessity to align Union, public and private spending with EU
competitiveness priorities. The Competitiveness Coordination Tool will aim to align industrial
and research policies and investments at the EU and the national levels. It will identify areas of
strategic importance and of common European interest, to deliver on initiatives with high European
added value, such as cross-border projects, for structural economic transformation, productivity,
long-term growth and quality jobs, and benefiting the Single Market. 16
The Communication on the Road to the next MFF17
outlined the objectives for the next EU Budget:
simpler, more focused and more impactful budget. A new approach for a modern EU budget should
present at its core a European Competitiveness Fund, with a comprehensive architecture designed to
support European projects along the entire investment journey, from research, through scale-up,
industrial deployment, to manufacturing. It will also help to leverage and de-risk private investment.18
The 14 EU programmes within the scope of this IA contribute to the competitiveness of the EU and
span a broad range of policy areas from R&I, digitalization, space, defence, health, Single Market
support, Circular Economy to energy transition. They include Horizon Europe (HE), Innovation Fund
(IF), Digital Europe Programme (DEP), Connecting Europe Facility (CEF) - Digital, European
Defence Fund (EDF), the Act in Support of Ammunition Production (ASAP), the European Defence
Industry Reinforcement through Common Procurement Act (EDIRPA), the European Defence
Industry Programme (EDIP), EU4Health, the European Space Programme, IRIS2, InvestEU, Single
Market Programme (SME Strand) and LIFE (see Annex 8 for more details of each of these
programmes). The size of these programmes today is very diverse, with Horizon Europe the largest,
EUR 93 billion over 7 years under this MFF (2021-2027, and the Innovation Fund the second largest,
accounting for an estimated 40bn € in the period 2020-2030 (funded by ETS revenues).
The implementation of the current and previous EU programmes, as also demonstrated by the relevant
programme evaluations19
, has shown that the complexity of the funding architecture is the major
factor hindering the impact of the EU budget. Currently, programmes may finance the different stages
of the investment journey within the same sector/area, but based on rules and conditions which can
differ - and with insufficient flexibility to respond to unforeseen needs. This leads to inefficiencies
and administrative burden for beneficiaries, Member States and the Commission. This is even more
acute in a demanding budgetary context at EU level (for example with the start of NextGenerationEU
repayments and the support to new EU priorities).
The Political Guidelines set out that the new long-term budget needs to be more focused, simpler,
with fewer programmes and more impactful. In line with the Political Guidelines, the College adopted
on 11 February 2025 the Communication ‘The road to the next multiannual financial framework’,
which states that ‘the next long-term budget will have to address the complexities, weaknesses and
rigidities that are currently present and maximise the impact of every euro it spends’. The
Communication also underlines that flexibility is key in guaranteeing the budget’s ability to respond
to a changing reality, focusing on challenges such as bolstering EU competitiveness which can only
be solved through joint action in a united Europe. These guiding principles apply to several other
proposals under the next MFF. A revamped external action financing will also make it more impactful
and targeted for our partners and more aligned with our strategic interests. The regional and national
partnerships with key reforms and investments focusing on joint priorities, including promoting
economic social and territorial cohesion with regions at its center, will also be designed following
these objectives. Together, the three pillars (i.e. The partnerships, the European competitiveness Fund
16
Ibid, p. 23.
17
COM(2025) 46. The road to the next multiannual financial framework
18
COM(2025) 30 final, p. 21. A Competitiveness Compass for the EU.
19
European Commission (2025): Competitiveness Fund: Assessment of costs and benefits and comparison of options
10
and the Global Europe instruments) and self-standing programmes will form a coherent system to
deliver key priorities.
In this political context, impact assessments for programmes under the next MFF focus on how to
streamline the architecture of the EU budget, thereby assessing the most important policy choices
underpinning the legislative proposals for the future EU programmes. Policy aspects are considered
in the analysis of the context, the problem definition and the objectives, which inform the choices on
the programme architecture. Given that the architecture of the new MFF will be significantly different
from the current structure, assumptions on the budget of each programme would be unreliable at this
stage. Therefore, the impact assessment does not include sectoral funding scenarios.
This reflects the specificities of this exercise, as clearly acknowledged in the Commission’s better
regulation rules, which this impact assessment follows. Tool #9 of the better regulation toolbox states
that ‘the special case of preparing a new multiannual financial framework is a unique process
requiring a specific approach as regards scope and depth of analysis’
2. PROBLEM DEFINITION
2.1. What are the problems?
For the last thirty years, the productivity gaps20
between the EU and other advanced economies have
widened, making the EU less competitive than other major economies. The EU is currently falling
behind in multiple areas, including technological development, research and innovation
performance, market dynamism and industrial capacity21
.This initiative addresses challenges
related to both regulatory and market failures of the current EU funding landscape with a focus on
simplification, financing and better coordination. Furthermore, the initiative aims at reducing
market failures related to the challenge of securing funding for projects with significant positive
externalities like R&I, decarbonisation and digital transitions, financing gaps in the innovation
journey (“valley of death”) or asymmetry of information, key for SMEs to secure the necessary
funding.
Concretely, there are five key systemic challenges for European competitiveness of both
architectural and broader policy nature. The challenges include (1) suboptimal support along the
investment journey, from fundamental research, applied research through scale-up, industrial
deployment, to manufacturing and (2) a complex and uncoordinated EU funding landscape, while the
broader policy problems include (3) an innovation gap with other world regions; (4) a challenging
geopolitical situation, with excessive strategic dependencies, and security and resilience issues and
(5) high investment needs to deliver on EU priorities, including for decarbonisation and the digital
transition.
Problem 1 Suboptimal support along the investment journey, from fundamental research, applied
research through scale-up, industrial deployment, to manufacturing
The EU currently struggles to seamlessly support the investment journey22. It lacks an
environment that builds on its worldclass research, technology and industrial foundations to attract
and retain talents, stimulate cross-border cooperation, support the emergence of innovative, high-
growth companies and that promotes private investment. The drivers include investment weaknesses
such as (i) fragmented support throughout the investment journey within the EU, (Problem driver 1)
, as well as a an insufficient provision and leverage of private investment (Problem driver 2), which
20
The productivity gap is driven, particularly, by the gap in innovation. See Draghi, M. (2024). The future of European
competitiveness. Part A – A competitiveness strategy for Europe, p.20.
21
See Draghi, M. (2024). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
22
European Commission (2025): Competitiveness Fund: Assessment of costs and benefits and comparison of options
11
hampers innovators’ ability to exploit scientific results, commercialise and scale up their production
in Europe. This results in the lack of talent retention, lack of scale and strategic focus and companies
seeking funding for commercialisation and market entry outside of the EU.
Problem 2 Complex and uncoordinated funding landscape
The EU’s financial landscape has evolved significantly over the past decades, but according to the
European Court of Auditors (ECA) the complexity of these instruments, often overlapping in their
goals and structures, has led to inefficiencies and fragmentation.23
Despite integrating several
financial instruments and budgetary guarantees in the 2021-2027 MFF through the introduction of
InvestEU, there is still a lack of cohesion between funding programmes, making it challenging to
coordinate investments effectively24
. This is also reflected in the relatively long time needed for
applicants to search for opportunities because of different existing frameworks which ultimately leads
to complexity. As a result, the current EU funding landscape for competitiveness with varying
conditions and criteria could make it difficult for applicants to access EU finance in the different
stages of the investment journey despite the capacity to identify funding opportunities at specific
junctures (see Synopsis Report in Annex 2). 88% (1 083) of respondents to the public consultation –
including 86% (198) of companies/businesses and business associations25
– have had a positive or
very positive experience with identifying current funding opportunities. On the other hand, the costs
for applicants/project promoters are evidenced by an EU-wide survey on access to EU funding carried
out in the context of the Strategic Technologies for Europe Platform (STEP) (500 respondents), where
both new and experienced users score the easiness to find information on EU funding only 5/10,
indicating the overall experience to be challenging regardless of the level of experience the user has26
.
For example, while in the EU, it frequently takes close to a year to award funds from an open call27
,
US federal grant calls’ award procedures in the field of environment may be as short as 90 days.28
Complexity, combined with the lack of coherence, directionality, and a high administrative burden
potentially disincentivises participation. Furthermore, while ensuring the predictability and stability
of critical long-term investments in research, development and core infrastructure, the existing
structure of programmes does not sufficiently allow for flexibility, impeding adequate ability to
reallocate funds effectively in response to evolving needs or unforeseen crises. The drivers of this
problem include complexity to access, mobilise and implement EU funding by beneficiaries (Problem
driver 3), inefficient coordination mechanism (Problem driver 4) and insufficient flexibility of
funding instrument (Problem driver 5).
23
European Court of Auditors (ECA). (2023). The EU’s financial landscape: A patchwork construction requiring
further simplification and accountability.
24
See Annex 8.
25
The open public consultation was opened for 12 weeks and gathered 2 034 responses and 462 position papers.
26
STEP Interim evaluation (forthcoming – July 2025 (tbc)).
27
See Annex 8.
28
Grants.gov. Hydrofluorocarbon Reclaim and Innovative Destruction Grants Notice of Funding Opportunity (2024).
12
Problem 3 Innovation Gap
For over two decades, Europe has not kept pace with other major economies, due to a persistent
gap in productivity growth, notably with the US in advanced technologies and China in certain new
growth areas.29 30
As the Competitiveness Compass highlights, a root cause is a lack of innovation.
Public and private R&I investments in the EU have systematically fallen short of aspirations.
In 2023, the EU allocated approximately EUR 381 billion to R&D, which accounts for 2.22% of its
GDP. To meet the 3% target31
, an additional investment of EUR 134 billion per year at EU level
would be required. At current pace, the R&D intensity is expected to reach 2.34% by 2030 while the
objective of 3% will not be achieved until around 2050.32
while remaining behind global competitors.
China (2.6%) recently overtook the EU, and South Korea (4.9%), Japan (3.4%), and the US (3.6%)
in term of R&D intensity substantially ahead of the EU.
Underinvestment in research and innovation is the most frequently mentioned challenge for EU
competitiveness in the public consultation (91% of respondents, or 1 795 said it is “important” or
“very important”)33
, The R&D investment gap between the EU and its global competitors is
particularly pronounced in private sector investments. To regain its competitive edge, the EU must
revive the innovation cycle.34
For this goal, multiple problem drivers need addressing, particularly:
the capacity gaps related to R&I, a weak translation of research results into marketable outputs,
and low and fragmented investment in strategic technologies and sectors. This is supported by
findings from the public consultation: when asked what development stages of technologies and
products the next MFF should support, 93% (N=1 815) of respondent said that applied research
should be supported ‘to a large extent’ or ‘somewhat’, followed by early-stage technologies (91%, or
1 170), fundamental research (87%, or 1 691, and manufacturing capacities (66% of respondents, or
1 267).
Stronger investment in innovation, as well as intangible capital and advanced machinery and
equipment is fundamental to enhancing productivity growth. The drivers of this problem include
capacity gaps (Problem driver 6), weak translation of research results into marketable outputs
(Problem driver 7) and low and fragmented investment in strategic technologies and sectors (Problem
driver 8).
Problem 4 Challenging geopolitical situation, excessive strategic dependencies, and security and
resilience issues in the EU
The EU is highly dependent on external sources for critical materials, technologies, industrial
components and products, posing significant risks to its economic security and strategic
autonomy, and exposing it to supply chain vulnerabilities and trade disputes. Asset and supply chain
vulnerabilities are heightened by climate and environmental risks as Europe is the fastest warming
continent. Additionally, reliance on foreign entities raises concerns about external control over critical
29
Draghi, M. (2024). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
30
The relevance of this problem is also highlighted by stakeholders in the PC, as they consider the innovation and
technological gap for the EU in strategic technologies to be the second current biggest challenge to competitiveness
(81%, or 1 614 respondents), after “underinvestment in research and innovation” (91%, or 1 795).
31
The 3% R&D target was formalised through the Lisbon Strategy. A brief overview of the history of the 3% target
can be found here: https://ec.europa.eu/invest-in-research/action/history_en.htm
32
DG Research and Innovation, Common R&I Strategy and Foresight Service, Chief Economist Unit, based on Eurostat
33
European Commission (2024) Steeman, J., Di Girolamo, V., Mitra, A., Peiffer-Smadja, O. et al., Why investing in
research and innovation matters for a competitive, green, and fair Europe – A rationale for public and private action
34
European Commission (2025: 4): A Competitiveness Compass for the EU. COM (2025) 30.
13
raw materials, components and technologies, vital infrastructures and essential service providers.35
Moreover, in the absence of effective defensive capacity, the risk of rising insecurity in a less stable
geopolitical landscape risks becoming a threat to growth.36
On 19 March 2025, the European Commission presented the ReArm Europe Plan/Readiness 2030 to
strengthen pan-European defence capabilities with new financial means.37
To ensure that the EU can
retain its autonomy and remain competitive in the global economy, it must “guarantee its industrial
presence in key technological sectors and mitigate risks for its security and resilience emanating
from dependencies – otherwise geopolitical uncertainty will cloud the outlook for our companies
and weigh on investment.”38
The drivers of this problem include weak translation of research results
into marketable outputs (Problem driver 7) and low and fragmented investment in strategic
technologies and sectors (Problem driver 6).
Problem 5 High investment needs for delivering on EU priorities, including for decarbonisation,
digital transition, resilience and security.
Substantial investment to meet the EU’s long-term priorities regarding decarbonisation, digital
transition, resilience and security, infrastructures and skills is needed.39
As indication, the Draghi
report estimates the EU needs annual additional investment of EUR 750 to EUR 800 billion (from
public and private sources) to tackle the various challenges for European competitiveness, of which
more than half relate to related decarbonisation investments40
. Moreover, EU funding has been used
in a fragmented way. Together with lack of alignment between EU and Member States’ funding
strategies, it limits the creation of the leverage required to address EU-wide challenges and priorities
on a cross-border scale.
2.2. What are the problem drivers?
Problem driver 1 Fragmented support through the investment journey
The current offer of EU funds does not provide large-scale, seamless funding support on the
entire investment journey to address market failures. It is also insufficiently linked with other
sources of public (national, regional, local) and private funding, which themselves are very
fragmented, as confirmed by 71% of the respondents of the public consultation (1 391 respondents).
Currently, EU programmes (or programme parts) tend to focus on a certain stage of the journey,
without systematic and sufficient links to other development stages or funding sources.41
(Figure 1)
35
Excessive dependence of the EU in foreign countries was considered the third major challenge linked to
competitiveness, with 82% (N=1 598) of respondents in the PC considering it as an “important” or “very important”
problem.
36
Draghi, M. (2024). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
37
See European Commission (2025). White Paper for European Defence – Readiness 2030.
38
COM(2025) 30 final, p.2. A Competitiveness Compass for the EU.
39
An investment gap in social infrastructures is estimated at EUR 100-150 bn. Source: High-Level Task Force on
Investing in Social Infrastructure in Europe.
40
Draghi, M. (2024: 281-282). The future of European competitiveness. Part B – In-depth analysis and
recommendations. For the more detailed Commission estimates see also SWD(2023)68 for the period until 2030 and
SWD (2024) 63 for the period post 2030.
41
See Annex 7.
14
Figure 1: Estimated potential support to different stages of net zero technologies in the EU between 2021 to 2027 (EUR million)
There is a financing and investment gap in the latter stages of innovation, development and
scaling up of companies,42
in strategic sectors essential for supporting the competitiveness of the EU
economy43
, including the “valley of death” scaling-up problem44
.
European startups often encounter two ‘valleys of death’ (Figure 1). The first occurs when
innovations fail to become marketable products, while the second, particularly challenging in Europe,
happens when companies struggle to scale.45
42
For example, pilot production lines for advanced chips.
43
This is one of the multiple “valleys of death” present throughout the investment journey [see European Commission
(2020: 535, 538). Science, Research and Innovation Performance of the EU 2020]. Analytically, the concept of
“valley of death” refers to “a financial or capital gap that exists between initial and later availability of funds for a
company” [see Gbadegeshin et al. (2022:3). Overcoming the Valley of Death: A New Model for High Technology
Startups, Sustainable Futures, volume 4, pp.1-15]. In this context, the valley of death describes the difficulty for a
start-up or new innovative technology to economically survive the period of negative cash flow in the early stages,
before the new product is bringing in revenue from real customers. See Delivering a Climate Neutral
Europe. (n.d.). United Kingdom: Taylor & Francis.
44
The “Valley of Death” is commonly known as a market failure. Here we refer to the “second valley of death” where
companies find it hard to obtain the required growth finance. Private investors are deterred by unproven ability to
scale-up rapidly and generate cash flow. “First valley of death” is associated to pre-commercial development of a
product, with still high technical risks and unproven ability to generate revenue. In both cases investments are seen
too risky by private investors, and are, therefore, often not funded.
45
The EU Startup and Scaleup Strategy Choose Europe to start and scale, COM(2025) 270 final.
15
Figure 2: Simplified illustration of the startup double valley of death46
In the public consultation, 70% (N=1 367) of respondents outlined that one of the key challenges of
competitiveness is insufficient innovation and manufacturing capacity for strategic technologies. The
EU’s fragmented and underdeveloped capital markets hinder the ability of promising firms to secure
large private investments, often forcing them to seek funds outside the EU, which, in critical areas,
puts Europe’s technological sovereignty at risk. In 2023, only 8% of all active unicorns47
were based
in the EU, compared to 66% based in the US and 26% in China.48
Currently, there is no EU company
with a market capitalisation over EUR 100 billion that has been created from the ground up in the last
50 years, while in the US all six (tech) companies with a valuation above EUR 1 trillion have been
created over this period. Despite some recent progress with a 5.6% growth in the number of unicorns
during 2023, the disparity remains notable.
The lack of large-scale, seamless support across the stages of research, technological and
industrial development hampers the creation of project pipelines in multiple policy areas. There
are some positive examples of targeted connection between EU funds. For example, the Innovation
Fund is connected with the Horizon Europe and EIC pipeline upstream and project development
assistance to InvestEU downstream for selected projects, but this remains limited. In the public
consultation, around half of respondents (50%, or 1 008 respondents) found that improving continuity
in EU funding from research to manufacturing could have a positive impact on competitiveness, with
another 37% (N=717 respondents) saying that this could have some impact.
Problem driver 2 Insufficient leverage of private investment
The huge gap in scale-up financing in the EU relative to the US is often attributed to a smaller capital
market in Europe and a less developed venture capital (VC) sector. The US raised substantially higher
level of VC (USD 932 billion) than the EU (USD 133 billion) over the entire period 2016-2024.49
46
Ibid
47
A unicorn is a privately owned start-up company, which has reached a valuation of $1 billion (currently about EUR882
million) or more.
48
Draghi, M. (2024). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
49
DG Research and Innovation – Common R&I Strategy and Foresight Service – Chief Economist Unit based on
PitchBook data, as of the 11th
of February, 2025.
16
Furthermore, between 2016 and 2024, only 12 VC funds in the EU raised tickets above USD 1 billion,
compared to 157 in the US.50
The VC investment gap between the EU and the US is particularly
pronounced for later-stage financing. In 2024, the EU’s performance was 84% lower than in the US
for growth stage financing. China and the US also have outpaced the EU in leveraging public R&D
investments into robust private sector funding. The lag in private (R&D) investments in the EU
compared to the US and China, opened and increased simultaneously with the digital boom and the
rise of enterprises - primarily from the US and China - in the digital sector that heavily invest in
R&D.51
Mobilising private funding at necessary levels continues to be challenging across the EU. One
reason is the high degree of fragmentation of the EU’s smaller capital pools across national borders.
Institutional investors in the EU appear to be driven to some degree by a home-country bias when
making investment decisions. This can be due to unfamiliarity with foreign Venture Capital firms or
unwillingness to sustain the necessary screening costs and due diligence practices. This
fragmentation, coupled with lower growth perspectives push innovative companies to seek financing
outside Europe.52
A number of measures aimed at encouraging private sector engagement are identified in the
Strategy for Savings and Investment adopted in March 2025. Positive experiences include the EU
programmes such as InvestEU (with 67.4% of its total investment mobilised coming from the private
sector), through which the EU budget aims at de-risking innovative projects and crowds in private
sector investments using for example EU guarantees and equity. Novel financial mechanisms are
considered to crowd-in private capital in sectors facing market failures (e.g., nature credits for nature
restoration) or to intervene when businesses in critical areas for EU’s economic security are at risk.
Joint Undertakings (JUs) and other public private partnerships (PPPs) also leverage and pool
resources, notably from industry. In the area of semiconductors, the Chips JU will raise EUR 11
billion in R&I investment until 2030. However, the leverage across the large number of partnerships
and JUs is highly variable and not always sufficient.53
Public procurement, which accounts for
approximately 14% of the EU GDP54
, is one of the tools to channel public investment towards shaping
the future of the European economy in support of objectives, such as green transition and resilience
of the EU economy, but its implementation can be challenging55
. Governments can support innovative
companies to overcome classic market failures, by finding initial customers for their products and
services56
.
The insufficient leverage of private investment is reinforced by the risk-averse tendency of European
funders. Innovation, and R&D in particular, is by nature high-risk with a heightened degree of
unpredictability. Market failures arise when private funders underinvest in projects with high
potential returns due to the uncertainty surrounding their outcomes. Public intervention is required to
mitigate the risk and encourage private investors to invest in innovative projects, to levels that can
drive EU competitiveness. The Draghi Report shows that the capacity of the EU budget to
mobilise private investment through risk-sharing instruments is hampered by limited appetite
50
Ibid.
51
European Commission (2025). Steeman, J.-T., Peiffer-Smadja, O. and Ravet, J., A comparative analysis of public R&I
funding in the EU, US, and China,
52
Commission Staff Working Document for the EU Startup and Scaleup Strategy Choose Europe to start and scale,
SWD(2025) 138 final
53
Staff Working document (SWD) on Horizon Europe mid-term evaluation 2025 (forthcoming).
54
European Commission (2025). The 2025 Annual Single Market and Competitiveness Report.
55
Ibid.
56
European Parliament, Directorate–General for Internal Policies, The Digital Single Market and the digitalisation of
the public sector, GovTech and other innovations in public procurement, May 2022.
17
for risk as implementing partners remain mostly focused on relatively low-risk investment.57
There is scope to improve the capacity of the EU budget to complement and attract private
investments (for example from institutional investors, patient capital and venture capital) into
innovation and fast-growing companies. Even if some funding instruments support beneficiaries in
bringing research results to the market, projects often struggle to access adequate funding for the next
investment steps of market deployment.
Leveraging more private funding through public intervention is also needed to address the positive
externalities of innovation investments. The social benefits of these activities often exceed the private
benefits that can be captured by the innovator, as they generate spillovers, such as new knowledge,
that can benefit other firms and society as a whole.
For example, quantum technologies are nearing practical application across various sectors, but while
the EU houses 25% of global quantum companies, these are receiving less than 5% of worldwide
funding, threatening their growth and EU leadership in the field.58
Inadequate funding also hampers
progress in sustainable fuels for aviation and maritime59
, drug and vaccine development, and
antimicrobial innovation60
, leading to project abandonment and limited approvals.
Europe faces a debt financing gap for new SME financing of more than EUR 28 billion annually,
present in every Member State albeit at a different order of magnitude..61
These financing gaps are
observed, despite the fact that significant efforts are undertaken at EU level. The severity of the
financing gap and market failure necessitates structured support to SMEs.
Problem driver 3 Complexity to access, mobilise and implement EU funding for beneficiaries
The complex EU’s funding landscape for competitiveness poses significant hurdles for applicants
and beneficiaries, particularly for smaller entities like SMEs and start-ups.62
Some views from the
open public consultation reflect the complexity involved in accessing, mobilising, and
implementing EU funding for beneficiaries, particularly due to fragmented programme structures,
varying criteria and requirements, and administrative burdens. In open-text responses on challenges
in the funding process, respondents frequently noted that lengthy evaluation timelines, unclear call
descriptions, and a lack of transparency create inefficiencies and discourage participation –
particularly for SMEs (who were, on average, least satisfied with the funding process) and
newcomers. Multiple applications across programmes to cover the entire investment journey cause
extra burden and delays that are incompatible with deep-tech innovation. Varying conditions imposed
by programmes targeting the same sector or similar project types add to the difficulty.63
Combining
different sources of funding (e.g. directly and shared managed programmes) while legally allowed is
hard to implement for stakeholders. This disparity in rules and the lack of coherence is increasing
search costs and burdening potential applicants with undue complexity64
. This hinders potential
beneficiaries from easily aligning their projects with available funding opportunities and from
advancing in their investment journey. An insufficiently coherent and complex-to-access support for
57
Draghi, M. (2024). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
58
EIB (2024) A quantum leap in finance: How to boost Europe’s quantum technology industry.
59
EIB (2024) Financing sustainable liquid fuel projects in Europe. Identifying barriers and overcoming them.
60
WEF(2024) Funding the future: Sustainable financing models to help the fight against antimicrobial resistance.
61
Forthcoming study by the European Commission. The study analyses the SME financing gap by exploring financial
market failures in the EU27 and across each EU Member State in providing credit to financially viable borrowers.
The approach uses SME survey data from 2017-2023 to gauge the number of SMEs unsuccessful in obtaining a loan,
62
Draghi, M. (2024: 289). The future of European competitiveness. Part B – In-depth analysis and recommendations.
63
Annex 8 provides an overview of the varying eligibility criteria of the programmes in the scope of this IA.
64
European Commission (2025): Competitiveness Fund: Assessment of costs and benefits and comparison of options
18
beneficiaries of EU funding which, together with regulatory complexity65
, ultimately affects the
efficiency and effectiveness of public investment and the ability to mobilise private funding. This
indicates a need for a more streamlined but flexible approach to providing funding.
For example, difficulties have emerged in the combination of Digital Europe with support from the
European Regional Development Fund (ERDF) under shared management implemented by Member
States66
and with the Recovery and Resilience Facility (RRF), which is not a cost-based but a
performance-based instrument. More generally Member States’ contribution to co-fund actions from
directly managed EU programmes is subject to state aid rules, which Member States have signalled
difficulties to handle. The experience of the STEP Seal shows some practical difficulties in the
combination of resources from different sources (directly managed funding and cohesion policy
funds) – including burdensome coordination between the Commission and the managing authority in
terms of timing and process, differing methodologies used by Commission and granting authority for
estimating costs, difficulties of cumulation for large consortia projects.67
More than 13 specific ‘one-
stop-shops’ exist or are being developed by the European Commission. Similarly, technical assistance
and advisory services are managed by each programme under different rules.
Problem driver 4 Inefficient structure and coordination mechanisms (creating overlaps and reducing
complementarities)
EU financing instruments are designed and deployed in a fragmented manner and lack focus on
strategic priorities. Moreover, the misaligned targeting and coordination issues between funds,
varying governance structures, and timing mismatches limit effectiveness and increase complexity.
Overall, the EU has close to 50 spending programmes, sometimes with multiple – occasionally
intersecting – objectives and using different instruments, even within a single policy area, as
illustrated by the following examples: (1) There are 13 main financial programmes with significant
relevance for energy under the current MFF; (2) In the area of research and innovation, there is
evidence of cross-participation between Horizon Europe and 19 other EU funding programmes68
; (3)
In the area of digital, there are at least 15 programmes that support EU’s digital transformation; (4)
In the transport sector, there are 6 funds and programmes that support the development and
deployment of alternative fuels; (5) In relation to EU security, there are at least 7 programmes that
can support the development and deployment of innovative civil security solutions; (6) there are 12
funding programmes that support health priorities.
As confirmed by the European Court of Auditors report on EU’s financial landscape the
multiplication of funding programmes prevents the EU budget from reaching sufficient scale for
larger pan-European projects, and leads to a duplication in efforts, inefficiencies, and incoherences.69
65
Evidence from the health sector shows that health innovation in the EU is hindered by a slow and complex regulatory
framework. For medicines, some elements are currently under review (pharmaceutical legislation) or recently
changed (clinical trials). Multi-country or EU-wide trials can provide EU developers with sufficient scale to compete
with the US and others. Regulatory differences between Member States as well as the slow uptake of digital tools
pose a significant challenge in this regard. In addition, approval times for new medicines in the EU/EEA can be
longer than in other regions. Source: Draghi, M. (2024). The future of European competitiveness. Part B: In-depth
analysis and recommendations
66
Article 63(9) of the Common Provisions Regulation (CPR) allows support to an operation from multiple EU
instruments, but at the same time makes costs declared under another EU instrument ineligible under CPR. This has
proven to be a difficulty in combining ERDF with directly managed programmes.
67
STEP interim evaluation (forthcoming).
68
See Annex 8.
69
European Court of Auditors (2023). The EU’s financial landscape.
19
Another concrete example is the 2024 report of the European Court of Auditors on EU’s investment
in Artificial Intelligence70
. One of their conclusions was the high level of fragmentation of AI
funding across different programs (e.g. Horizon Europe, Digital Europe Programme, EIC, Invest EU).
This has resulted in the EU financed research on three similar projects (AI taxonomies) without any
coordination between them. They concluded that there was no EU body or committee to coordinate
the projects at the planning, implementation or evaluation stages. They recommended that this could
improve monitoring of the performance of actions and the efficiency of AI planning and funding (e.g.
to avoid double funding or to identify investment gaps).
Despite efforts to foster synergies71
(e.g. signature of Memoranda of Understanding, Seal of
Excellence, coordination via the Strategic Technologies for Europe Platform), EU funding
programmes are still subject to overlaps and insufficient complementarities, and the creation of
synergies at project level and between sectors remains complex and difficult to implement72
.
According to some of the contributions to the public consultation, addressing fragmentation through
more integrated rules and governance structures could play a central role in simplifying access and
reducing the overall complexities and administrative inefficiencies. Greater coherence across
programmes is seen to have the potential to improve both the user experience and the overall
effectiveness of funding delivery. Similarly, applying common rules, timelines and eligibility
criteria to all relevant EU funds was seen as an impactful possible measure for EU funding to
better support EU competitiveness with consistent results across stakeholder groups (76%, 1 502).
This fragmentation of funding in Europe is exacerbated by the lack of directionality (see problem
driver #5). As set out in ‘the road to the next Multiannual Financial Framework’ Communication73
,
the EU budget remains too much driven by the structures of spending programmes rather than by
policies. As a result, financing of the current EU policy priorities is often scattered across sometimes
overlapping programmes, with insufficient link between overall policy coordination and the EU
budget.
Fund fragmentation also causes coordination issues between various funds, governance challenges
(e.g. different reporting requirements, timing mismatches and fragmented responsibilities),
underutilised financial transfers/limited uptake of complementarity, as well as synchronisation issues
of fund flows. The Strategic Technologies for Europe Platform (STEP) is a novel instrument to
enhance the degree of coordination among existing programmes across the MFF, aiming to solve
some of the listed issues. However, the implementation of STEP across programmes operating under
different rules, timelines, and legal bases, is an operational challenge74
.
The issue of fragmentation, inefficient governance and coordination mechanisms also affects
applicants (see problem driver #6).
Problem driver 5 Insufficient flexibility of funding instruments
The complexity of the EU funding landscape stems from an increased number of programmes,
multiplied in the past 15 years, replying to specific rules and objectives. For instance, many EU
programmes in support of competitiveness are structured around annual or multi-annual work
programmes (e.g. Digital Europe, LIFE) with varying characteristics. Some work programmes are
underpinned by stakeholders’ consultations, prepared through comitology and adopted by the College
ahead of publication. This process helps with predictability, external communication and
70
ECA (2024) Special report 08/2024: EU Artificial intelligence ambition – Stronger governance and increased, more
focused investment essential going forward
71
See Annex 7.
72
SWD(2025) 110 final. Interim evaluation of Horizon Europe.
73
COM(2025) 46. The road to the next multiannual financial framework.
74
STEP interim evaluation (forthcoming evaluation).
20
transparency towards shareholders. Moreover, multi-annual planning provides stability for critical
long-term investments, in particular in research, development, industrial capacities and
infrastructures, with high fixed costs for individual Member States. However, in the current MFF,
there are more than 30 work programmes relevant for competitiveness which vary in terms of
structure, prescriptiveness, granularity and rules. For example, the Single Market Programme (SMP)
has both an annual work programme for internal market and a multiannual work programme for
statistics or competitiveness and enterprises; the EU Space Work Programme is a single programme
with different annexes by components. Horizon Europe 2023-2025 main work programme contains
more than 2 500 pages across 10 thematic priorities and programme parts. (see Annex 8 for more
details, varying conditions, rules and application criteria).
The ongoing implementation of the current MFF provides some lessons learnt on how the EU
budget’s agility could be enhanced, and better align with the EU’s priorities and objectives. 90% of
the 2021-2027 MFF and NextGenerationEU budget is pre-allocated for specific purposes,
programmes or national envelopes75
. Since 2021, as a result, evolving needs subsequent to crises and
have been addressed by repurposing and reallocating existing funds, in sometimes lengthy
procedures, as well as creating for example new ad hoc funds in the space and defence areas,
programmes, or measures, accentuating the issue of scattering of EU funding (i.e. ASAP, EDIRPA,
EDIP, IRIS2). Each programme benefits from a varying degree of flexibility to reorient internally its
budget. Some programmes have a defined degree of flexibility, while for others, transfers are not
allowed. Furthermore, programmes relevant for competitiveness are to be found in the MFF under
different headings, which limit possibility of transferring resources across programmes. Budgetary
inflexibility emerges as a barrier to the effective allocation and use of EU resources. Higher flexibility
to transfer resources (i.e. across and within programmes) would enhance the ability to respond to
evolving policy needs. While providing for the needed predictability for long-term investments
required by stakeholders, the current silo structure can delay the deployment of funds toward new
initiatives that arise unexpectedly, thus restricting potential growth and innovation within the EU.
Introducing more flexibility into resource allocation to react to crises and emerging needs was
considered impactful by 79% (1 528) of respondents. Most of these respondents called for funding
mechanisms reflecting clearer prioritisation and greater flexibility to address national and regional
needs, while remaining responsive to emerging challenges and crises.
Problem Driver 6 Capacity gaps (labour and skills shortage, infrastructure, R&I divide)
The EU faces significant capacity gaps, including labour and skills shortages, insufficient R&I and
technology infrastructures, and national and regional disparities (the national ‘R&I divide’). These
issues adversely affect the EU’s competitiveness on a global scale.76
Labour and skills shortages, as well as skills mismatches, affect critical areas for EU’s
competitiveness, particularly in the digital, deep tech and net-zero sectors.77
These must be
addressed to lift barriers in adopting digital technologies, especially among SMEs.78
at current
pace, the EU will not achieve the Digital Decade79
target of having 20 million ICT specialists in
employment by 2030, which could also have diversity and gender balance impact. The potential
75
COM(2023) 401 final. Annual management and performance report for the EU budget, financial year 2022.
76
Disparities in capacities across Member States were described as an important (or very important) challenge for
competitiveness by 58% of stakeholders in the PC (N=1133).
77
Draghi, M. (2024: 25). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
78
45% of SMEs report that skills shortages hinder their ability to adopt or effectively use digital technologies.
European Commission (2023). Flash Eurobarometer 529. Moreover, the mismatch between skills and labour
market demands was seen as a relevant challenge by 62% (N=1208) stakeholders in the PC.
79
European Commission. Report on the state of the Digital Decade 2024.
21
industry demand for European AI specialists is measured between 0.5 and 2.8 million over the next
five years, which would require a substantial part of graduates choosing this sector or reskilling post-
graduates80
. Similarly, skills mismatches hinder progress in net-zero technologies. Anticipation of
skills needs and targeted re-skilling efforts are required to support a fair labour market transition and
mitigate the impacts on affected sectors, and communities.81
The European space sector faces a
similar shortage of specialised skills due among others to fewer STEM graduates, an aging workforce,
low female employment,82
and misaligned curricula.83
Beyond skills and education, Error! Bookmark not defined.to lead on innovation, the EU needs to foster
an environment that allows researchers and innovators to reach their full potential. This means
providing state-of-the-art infrastructures, such as laboratories and supercomputers to test and
develop ideas.
These capacity gaps are further aggravated by the high divide in R&I performance both across
Member States and across regions.84
Underperforming regions are particularly vulnerable to
these dynamics and to the challenges associated to them85, including the innovation gap,
demographic changes (e.g., shrinking working population and brain drain), which can exacerbate
competition for highly skilled workers and hinder the development of innovations, reinforcing
existing disparity of resources and expertise amongst EU Member States.86
Problem Driver 7 Weak translation of research results into marketable outputs
Europe is lagging behind with regards to valorising research results and the uptake of
innovative solutions.87
While the EU’s scientific performance remains strong, though increasingly
challenged, its innovation output is behind other major economies with the gap deepening.88
The EU
faces a challenge in translating its research results into commercial products and industrial
deployment.89
This is supported by stakeholders according to the results of the public consultation.
80
Leads GAP Analysis (2023), p. 30.
81
Draghi, M. (2024: 36). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
82
Particularly in the upstream segment (e.g. the majority of workers is in the 49-58 age group).
83
OECD (2023 : 89), The Space Economy in Figures: Responding to Global Challenges, OECD Publishing, Paris.
84
European Commission (2024). European Innovation Scoreboard 2024; European Commission (2023). Regional
Innovation Scoreboard 2023.
85
A stronger focus of resources on specific knowledge hubs could have a direct effect on underperforming regions.
The use of smart specialization strategies and other cohesion policy tools could diminish this impact. For further
discussion, see territorial effects analysis on societal impacts in Chapter 6 below. For academic evidence, see
Pinheiro, F. L., Balland, P. A., Boschma, R., & Hartmann, D. (2022). The dark side of the geography of innovation:
relatedness, complexity and regional inequality in Europe. Regional Studies, 1-16.
86
European Commission (2024: 193). Ninth report on economic, social and territorial cohesion.
87
See recent Horizon 2020 ex-post evaluation, SWD (2024) 29 final. In a similar vein, this challenge was already
pointed out in the Horizon Europe impact assessment, which stated that the EU’s substantial knowledge assets,
notably in the field of key enabling technologies, need to be more effectively and quickly turned into innovations.
See SWD (2018) 307 final.
88
European Commission (2024: 17). Science, Research and Innovation Performance of the EU: A Competitive Europe
for a Sustainable Future.
89
In this regard, evidence from the health sector shows that the EU matches the US in scientific publications but lags
in commercializing research, causing innovators to leave Europe. (Source: Draghi Report) To valorise the knowledge
the Commission supports the development of industry academia collaboration. It is for instance investing EUR 100
million to establish a European Hub for Vaccine Development which will bring together universities, research
institutes and increase links with industry.
22
72% (N=1419) of respondents considered the inability to bring innovation to market and integrate it
into the EU’s industrial base as an important challenge for competitiveness.90
Investments in research excellence generates massive scientific, economic, environmental, and
societal benefits, including collaborative research.91
It is the basis for effective and robust
knowledge valorisation, which in turn drives economic dynamism. However, while the EU is a
“mass producer [of knowledge]”, it possesses, “relative to its size, comparatively few centres of
excellence that stand out at world level.”92
, with potential consequences into levels of talent drain in
the region.93
In parallel to the lack of enough top-tier academic institutions, levels of cross-sector and
cross-border collaboration are still low,94
leading to a fragmentation and under-exploitation of the
R&I ecosystem that undermines EU's ability to compete in the global innovation landscape95
.
This is a lost opportunity and affects the overall innovation performance of the EU, as universities
and research institutions should play a vital role in the first stages of the investment journey, via
access to education, skill formation, and particularly, groundbreaking research. But this is also true
in the deployment phase, as the most advanced innovation clusters tend to develop around prestigious
universities.96
The EU boasts an excellent university system on average, but its presence among the
top world-leading research universities is limited, especially in natural science and health science.
Lacking excellence at the top stems from difficulties in attracting and retaining top research talent.
Also, the links between higher education and business are weak and researchers have few incentives
to become entrepreneurs.97
At the same time, the EU has numerous innovation clusters, but they are
less developed and generate less value than those in the US and China. The EU has only one high-
tech sector cluster in the global top 20, compared to 6 for the US and 7 for China.98 99
To stay competitive, “we need to create the conditions for researchers to thrive”.100
This requires
multiple measures, including funding for excellent research101
, as well as ensuring, stronger links
with later stages of development in the investment journey.102
90
This was particularly relevant for businesses, with a 83% (N=309) of them identifying it as a major obstacle.
91
SWD (2024) 29 final. Ex-post evaluation of Horizon 2020, the EU Framework Programme for Research and
Innovation.
92
SWD(2017) 220 final, p. 46. In-depth interim evaluation of Horizon 2020.
93
Mahroum, S. (2000). Highly skilled globetrotters: mapping the international migration of human capital. R&D
Management, 30(1), 23-32.
94
An example is the fact that only between 3-10% of co-patents filed each year involve organisations located in two
different European countries. Source: European Commission (2024: 267). Science, Research and Innovation
Performance of the EU: A Competitive Europe for a Sustainable Future.
95
Fragmentation particularly hinders Europe’s progress towards more advanced and complex technologies. Recent
evidence shows that the EU R&I system is not only more fragmented than in the US, but also that this fragmentation
is particularly pronounced for complex technologies, which are key for enhancing competitiveness. See Balland et
al. (forthcoming). “Divided we fall behind. How R&I Fragmentation kills EU competitiveness in complex
technologies.”
96
Draghi, M. (20242024: 240). The Future of European Competitiveness, Part B: In-depth analysis and
recommendations.
97
Draghi, M. (2024: 239-241). The future of European competitiveness. Part B – In-depth analysis and recommendations.
98
WIPO: Global rankings of science and technology clusters, 2023.
99
In the health sector, the US concentrates health funding on hubs, while the EU follows a fragmented approach
(Draghi, page 192). The EU's approach limits its ability to develop large clusters, hindered by data issues and complex
regulations.
100
European Commission (2024: 11). Europe’s Choice. Political guidelines for the next European Commission 2024-
2029.
101
Ibid.
102
For example, evidence shows that many high-quality R&I projects of Horizon Europe are unfunded due to insufficient
financing options. Currently, only 33% of the high-quality proposals could be funded, see European Commission
(2024), Horizon Europe implementation – Key figures 2021-2023.
23
The valorisation of research results on the market contributes to strengthening the economy,
increasing competitiveness and economic and research security. Challenges for uptake and
deployment include weaknesses in facilitating technology transfer and underexploited public
agencies.103
A critical factor in this process is the effective management of intellectual property (IP),
which ensures that innovations are protected, managed and enforced. Strong IP strategies not only
encourage investment and partnerships but also safeguard Europe's technological sovereignty. As
underlined in the European Commission action plan on IP, intellectual property is a key driver for
economic growth and helps companies valorise their research results and secure a return on
investment.
Insufficient wide-scale collaboration between R&I and industry, as well as across disciplines,104
hampers competitiveness. For example, the limited diffusion of knowledge has far-reaching
implications for critical sectors like healthcare, where the lack of access to interoperable data
hampers the development of innovative health technologies, and Europe’s capacity to respond to
health emergencies, ultimately compromising its global health security, cooperation and
competitiveness. Similar issues are faced in the digital sector, where the suboptimal uptake of
digital technologies might hinder EU competitiveness and resilience.
Problem Driver 8 Low and fragmented investment in strategic technologies and sectors (for example:
clean tech, cross-border infrastructure, defence, digital, biotech)
The EU faces a persistent lack of directionality of EU funding, as investment covers multiple
fields and priorities without clear focus on key strategic technologies and sectors. According to the
public consultation, the innovation and technological gap in strategic technologies is the second most-
important challenge (81% of respondents - N= 1 614) after underinvestment in R&I (91% - N=1 795).
This is exacerbated by the limited alignment between EU priorities and Member States funding
strategies.105
Notwithstanding progress from initiatives such as IPCEIs to support key strategic
technologies, most funding raised at national or regional level responds to national or regional
priorities, often insufficiently aligned with EU strategies.106
In addition, EU public R&D funding is
fragmented across multiple governmental layers hindering the impact of public funding. Given the
constraints on public funding ensuring the efficiency and impact is vital.107
Europe specialises in mid-tech sectors with lower R&I intensity that are not at the centre of radical
technological advances.108
Its scientific productivity is lower than the US and China’s in strategic
areas, leading to a considerable technological gap, as shown in Figure 2 - EU position in complex
technologies vs. the US and China, 2019-2022. This technological gap is also largely affected by a
gap in private R&I investment (see Problem Driver #2). This creates a vicious cycle where the EU
103
Mergel, I., Ulrich, P., Kuziemski, M. and Martinez, A. (2022). Scoping GovTech dynamics in the EU,.
104
Including Science, Technology, Engineering and Mathematics (STEM), Social Sciences and Humanities (SSH), and
life sciences.
105
Draghi, M. (2024). The future of European competitiveness. Part B – In-depth analysis and recommendations, p. 236
106
Although regional and national smart specialization strategies show that ERDF R&I investments contribute to the twin
transition, there is a structural lack of coordinated policies and objectives between EU, Member States and regional levels.
107
European Commission (2025). Steeman, J.-T., Peiffer-Smadja, O. and Ravet, J., A comparative analysis of public
R&I funding in the EU, US, and China,; European Commission (2025) Benoit, F., Karvounaraki, A., Stevenson, A. and
Ravet, J., Shaping the future – EU R&D investments explained
108
Draghi, M. (2024: 23). The future of European competitiveness. Part A – A competitiveness strategy for Europe.
24
focuses on mid-to-low research-intensive technologies, which widens the R&I investment gap in
high-tech sectors like ICT and health.109
Additionally, Europe faces a debt financing gap for new SME financing of more than EUR 200 billion
over a 7-year period. The financing gap exists in every Member State albeit in a different order of
magnitude.110
This financing gap is observed, despite the fact that significant efforts are undertaken
at EU and Member State level to support SME financing such as through the InvestEU programme,
Member State resources or EIB/EIF own resources.
Figure 2 - EU position in complex technologies vs. the US and China, 2019-2022111
The EU has allocated significant budget to contribute to the digital transition. In the years 2021
to 2023, the EU budget (including NextGenerationEU) has channelled over EUR 200 billion to the
digital sector.112
However, this proved insufficient to reach several EU digital targets. For instance, it
is estimated that reaching the Digital Decade connectivity targets alone still requires additional
investments of more than EUR 200 billion until 2030113
. Based on a projection from 2020 data,
Draghi estimates that, for the period 2025-2030, EUR 150 billion annually are needed for the EU to
become a leader in digital technologies and between EUR 100 to 150 billion annually for
breakthrough innovations, including in the field of digital. For example, a minimal sovereign cloud
capacity requires EUR 80 billion. Reaching the target for chips production capacity (20% of global
109
Research and development of innovative health technologies including antibiotics is a complex and expensive process
that requires significant investment, including private R&I investment.
110
Forthcoming study by the European Commission. The study analyses the SME financing gap by exploring financial
market failures in the EU27 and across each EU Member State in providing credit to financially viable borrowers.
The approach uses SME survey data from 2017-2023 to gauge the number of SMEs unsuccessful in obtaining a loan,
111
European Commission (2024: 38). Science, research and innovation performance of the EU, 2024 – A competitive
Europe for a sustainable future.
112
Budget contribution digital: Digital tracking - European Commission.
113
European Commission (2023). Report on the State of the Digital Decade.
25
market share by 2030) would still require 251 billion, according to an estimate of industry leader
ASML114
.
Furthermore, the EU is at risk of losing its lead in clean technologies and putting in danger the
achievement of its environmental and climate goals due to insufficient disruptive innovation leading
to commercialisation in areas like circular economy, water resilience, blue economy, zero pollution,
and climate change mitigation.115
While the EU still performs better than China and the US in R&I
in some energy technologies, green infrastructure, and environmental tech, and has mobilised
significant resources under the 2021-27 MFF and Next Generation EU, it is still lagging in
investments in promotion, development, and manufacturing.116
Studies show two current challenges.
First, many of the technologies needed for the operationalisation of the green transition are still being
researched,117
and these technologies will be essential to continue to protect our natural capital and
boost our circular economy. And second, there has been a recent decrease in climate-related
innovation, despite increasing commercialisation of existing technologies118
. We are thus facing a
double-edged challenge, which includes an investment shortage119
, as well as a market uptake
obstacle.120
The Net-Zero Industry investment needs assessment, performed by the European Commission,
identifies a need for around EUR 92 billion in accumulated investments from 2023 to 2030 to boost
EU manufacturing capacity in strategic net-zero technologies, including solar, wind, batteries,
electrolysers and heat pumps. In the industrial field, decarbonisation – especially in energy-intensive
sectors like steel, cement, and chemicals – faces significant hurdles. One of the primary challenges is
the current high cost of transitioning to low-carbon technologies in hard-to-abate sectors. Many green
alternatives, such as hydrogen-based production or carbon capture and storage (CCS), require
substantial upfront investments. As indicated in the Draghi report, on top of large upfront capital costs
(CAPEX), the operational costs (OPEX) of some producing with greener technologies are uncertain
when technologies are not mature and often higher than those of traditional technologies as long as
electricity and low-carbon fuel (e.g. clean hydrogen) prices remain high in Europe. As a result, these
technologies are often not economically viable yet compared to traditional fossil fuel-based processes.
114
European Court of Auditors (2025). Special report “he EU’s strategy for microchips”.
115
See Draghi, M. (2024: 35-36). The Future of European Competitiveness, Part A: A competitiveness strategy for
Europe.
116
In the energy sector, key for the green transition, various challenges hinder investment in the energy system. Energy
projects often struggle with low return on invested capital, due to high operational and capital costs, significant
upfront investment needs, and/or uncertain revenue streams, compounded by regulatory risks such as long permitting
procedures. European venture capital markets are less developed than US, China and UK, and market fragmentation
coupled with limited securitization deter institutional investors. Additionally, weak creditworthiness of SMEs and
counterparty risks discourage investment. Source: Draghi, M. (2024). The Future of European Competitiveness, Part
B: In-depth analysis and recommendations.
117
International Energy Agency (2023a), Net Zero Roadmap - A Global Pathway to Keep the 1.5 °C Goal in Reach,
2023 Update.
118
Cervantes, M., Criscuolo, C., Dechezleprêtre, A., and Pilat D. (2023), Driving low-carbon innovations for climate
neutrality, OECD Science, Technology and Industry Policy Papers, No. 143, OECD Publishing.
119
Delivering the EU’s environmental objectives requires mobilising more environmental investments. Up to 2030 the
environmental investment gap in the EU, i.e. the environmental investment needs unmet by existing private and
public funding, is currently estimated to be at least EUR 122 billion per year. Particularly for R&I, EU´s expenditure
is expected to increase further, with a view to catching up to global competitors and to delivering on previous pledges
on the R&D intensity. The estimated total needs reach around EUR 27 billion per year (including both direct and
indirect contributions to the environment). Given recent baseline expenditure of EUR 20 billion per year, this creates
a yearly financing gap of EUR 7 billion. Sources: European Commission (2022), European Court of Auditors (2023),
Special report 17/2023: Circular economy; internal Commission analyses.
120
International Energy Agency (2023). The World Energy Outlook 2023, IEA, Paris.
26
Companies may therefore delay or limit their transition, leading to slower progress in reducing
industrial emissions.
The European defence and space sectors have suffered from decades of underinvestment,
leading to critical capability gaps in the national armed forces, as well as a lack of interoperability of
solutions across Member State with fragmented markets, affecting the competitiveness of EU
industries and the security of the EU. This is accompanied by a lack of private investment linked to
uncertainties and risks associated with defence, regulatory and political challenges (e.g. EIB lending
policy). Particularly, private investors are reluctant to invest (in R&D or ramping up of production
capacities) without having a clear perspective of long-term demand. As conflicts are by nature hybrid
nowadays, ensuring the EU’s security requires, alongside defence investments, to invest in purely
civil security technologies, The civil security industry in the EU faces problems like the defence
industry, in particular in terms of market fragmentation and regulatory challenges. In addition, EU
space start-ups and scale-ups face significant challenges in securing the necessary funding for their
growth, with the projected private investment needs for the next seven years amount to close to EUR
10 billion. The private financing gap is particularly significant in later stages of their development,
translating into significant technology gaps in the EU compared to other countries.
Furthermore, a stronger focus on maximising technological spillovers between civil and defence
innovation cycles is mutually beneficial for both industries by ensuring a functioning civil-to-defence
and defence-to-civil innovation pipeline. In addition, it can help integrate commercial technologies
with dual-use potential,121
driving deeper technical innovation and expanding the use of capital for
emerging technologies.122
By investing in both civil security and defence technologies, the EU can
support its resilience and competitiveness, while ensuring the growth of startups and SMEs in the
EU.
In parallel, the EU faces significant challenges in coordinating investment in infrastructures
(including cross-border ones) across key sectors such as energy, transport, and digital connectivity.
This lack of coordination limits the efficiency of infrastructure projects, increases costs, and slows
down the development of a truly interconnected single market. The estimated investment needs for
energy infrastructure categories for the period 2028-2034 amount to a total of EUR 570 billion,
corresponding to a yearly amount of EUR 81.5 billion per year123
.
The energy and digital sectors also face significant infrastructure challenges. The decarbonisation
of the energy system requires an expansion of power grids, while delays in developing cross-
border interconnectors hinder progress toward a unified European energy market. In the digital
sector, gaps in infrastructure investment, such as the deployment of 5G and high-speed broadband,
leave certain regions lagging behind, exacerbating the digital divide. The unprecedented growth in
computing needs for AI and the related but essential data-storage and networking/cloud capacity were
not anticipated. The infrastructural needs for Generative AI were initially not foreseen in the current
MFF, but an investment of EUR 200 billion has been considered essential in 2025. 124
Furthermore,
low investments and coordination of cross-border interoperability125
for digital public services
121
European Commission (2024). White Paper on options for enhancing support for research and development involving
technologies with dual-use potential, COM (2024) 27.
122
Draghi, M. (2024: 163). The future of European competitiveness. Part B – In-depth analysis and recommendations.
As referred to in the Draghi Report, a successful scale-up of defence manufacturing capabilities is also closely linked
to the resilience of the wider value chain and interaction with related industrial ecosystems.
123
European Commission (2025) Investment needs of European energy infrastructure to enable a decarbonised economy
124
Speech by President von der Leyen at the Artificial Intelligence Action Summit, 11 February 2025.
125
At least EUR 700 million at EU level is needed for the creation and deployment of pan-European and sovereign
cross-border interoperability and other digital public infrastructures. This is to be topped up by further co-investments
from Member States. Source: Internal Commission analysis, an estimate based on the current budget and future needs.
27
failed to exploit the expected 0.4% EU GDP growth and savings for businesses up to EUR 568
billion126
.
The EU health, biotech and med-tech sectors faces several challenges in translating research into
marketable outputs, primarily due to limited risk-tolerant capital, fragmented innovation landscapes,
and regulatory barriers. The sector requires highly skilled workforce. In addition, the potential of AI
and big data is underused, affecting innovation and competitiveness. These issues lead to unequal
access to treatments and vulnerabilities in medicine and medical devices supply chains. The EU's
pharmaceutical industry, despite a strong trade position, is losing ground in dynamic market
segments. In addition, the health and biotech sector plays a key role for health security, such as
through addressing antimicrobial resistance.
3. WHY SHOULD THE EU ACT?
3.1. Legal basis127
Article 173 of the TFEU foresees that the Union and the Member States shall ensure that the
conditions necessary for the competitiveness of the Union's industry exist. The Union shall contribute
to the achievement of these objectives through the policies and activities it pursues under other
provisions of the Treaties.
Under Title XIX of the TFEU (“Research and Technological Development and Space” heading),
Article 182(1) requires that the activities set out in Article 180 are implemented through a multiannual
framework programme: “A multiannual framework programme, setting out all the research and
technological development activities of the Union, shall be adopted by the European Parliament and
the Council, acting in accordance with the ordinary legislative procedure after consulting the
Economic and Social Committee.
3.2. Subsidiarity: Necessity of EU action
As the Problem Definition illustrates in detail, the EU is facing a competitiveness gap with other
global players. Not only US and China are leading in critical sectors and key innovation clusters,128
but these economies also leverage significantly greater financial support for R&I, deployment, and
scale up. For this reason, the response to regain competitiveness needs to be coordinated at EU level
to be truly effective. Pooling resources at the EU level can maximise the impact and added value of
investment on the ground, and lead to economies of scale in procurement (for vaccines, medical
equipment, etc.), research and innovation, space and health initiatives, making them more cost-
effective than if each Member State acted independently.
Underinvestment by the private sector remains a persistent challenge in the EU, affecting a broad
spectrum of investment types—including infrastructure, innovation, green and digital transitions, and
industrial capacity. This underinvestment is exacerbated by fragmented capital markets, which hinder
the efficient allocation of savings to productive investment opportunities across borders.129
Despite a
high level of private savings in Europe, these are not being sufficiently transformed 130
into long-term
investments, especially those that are critical for the twin transitions and strategic autonomy. The
fragmentation of financial markets limits cross-border capital flows, reduces scale, and increases risk
for investors, particularly affecting SMEs and strategic sectors.
126
Letta, E. (2024). Much more than a market, page 95.
127
Details of the legal basis of sectoral policies are provided in Annex 8.
128
Draghi, M. (2024:241). The future of European competitiveness. Part B – In-depth analysis and recommendations.
129
European Commission (2025). The 2025 Annual Single Market and Competitiveness Report
130
COM(2025)124 final. Savings and Investments Union. A Strategy to Foster Citizens’ Wealth and Economic
Competitiveness in the EU.
28
As the Draghi report points out public R&D spending in the EU is highly fragmented across Member
States, not consistently directed towards EU-wide priorities, and often difficult to access. Currently,
only a small portion of this funding comes from EU-level resources, with most resources coming
from the budgets of the 27 Member States.131
EU-level action is necessary to support the type and
scale of projects that would otherwise not be possible if Member States acted alone. EU support
creates critical mass for large projects and partnerships to produce more impact132
and deliver on pan-
European societal needs, whilst leveraging more private and public investment.133
Lastly,
collaboration - fostering knowledge spillovers and risk-sharing opportunities - is an important
element in advancing competitiveness. An EU-wide solution would foster economies of scale and
cooperation across stakeholders,134
which are vital to enhance knowledge valorisation and improve
organisational and technical capacities.
3.3. Subsidiarity: Added value of EU action
1. Enhancing collaboration and integration across stakeholders and borders
EU funding fosters extensive collaboration across stakeholders and borders, reducing fragmentation
of resources and efforts and facilitating knowledge transfer between stakeholders and sectors, from
fundamental research to businesses.135
This collaboration is vital for developing competitive products
and services and is crucial in technological fields that require a strong European presence. EU funding
breaks down national barriers and forms networks creating critical mass to address challenges like
climate neutrality, biodiversity loss, pollution, digital transformation, security, competitiveness or
preparedness that single Member States cannot tackle alone. 136,137
2. Addressing market failures and suboptimal investment conditions, and generating economic
impact
EU funding addresses market failures and suboptimal investment conditions, such as green-premium
investments and large infrastructure projects where social returns outweigh private returns. By
mitigating investment risks and incentivising stakeholder engagement, EU funding supports
economically beneficial projects that might not succeed otherwise. It enhances economic resilience,
leverages private funds, attracts capital, and boosts productivity across the EU, driving GDP growth
and fostering long-term stability. For example, more than 370 billion EUR of additional investment
had been mobilised by EFSI (the European Fund for Strategic Investments – the predecessor of
InvestEU) by the end of 2022138
. According to the RHOMOLO-EIB model, the EFSI-supported
investments addressing market failure and suboptimal investment situations and leveraging private
investment will help generate a 2.4% increase in GDP and 2.1 million jobs by 2025.
131
For example, Draghi shows that for public R&D spending circa one-tenth comes from EU-level resources.
132
Letta, E. (2024). Much more than a market, page 22.
133
European Commission (2024). Evaluation study of the European framework programmes for research and innovation
for an innovative Europe – Report phase 2 (support study for the interim evaluation of Horizon Europe).
134
Draghi, M. (2024:239). The future of European competitiveness. Part B – In-depth analysis and recommendations
135
European Commission (2024: 352), Science, research and innovation performance of the EU – A competitive Europe
for a sustainable future.
136
European Commission (2024: 98). Horizon Europe and the Digital & Industrial Transition: Interim evaluation
support study Final Report (“Phase 2” study).
137
European Commission, Mitra, A., Canton, E., Ravet, J. and Steeman, J. (2024: 8). The added value of European
investments in research and innovation.
138
European Court of Auditors (2025). Special report 07/2025: The European Fund for Strategic Investments.
29
The R&I Framework Programme Horizon Europe is expected to make a contribution to the EU’s
GDP of EUR 720 to 975 billion over a 25-year period.139
Along with impacts on GDP, there is
evidence that EU R&I funding generates considerable added value at firm-level, while not displacing
or replacing national funding. Similarly, it is estimated that every euro invested into the European
Defence Fund will generate EUR 4.5 of benefits by 2040. EU funding can also support cross-border
projects that do not attract public and private investments due to complex regulatory environments
which impacts profitability and risk. This is also thanks to ensuring EU-wide competition which
allows to select the best (most scientific and innovative ideas) from across the EU. Furthermore, EU
action helps in limiting duplication and inefficiencies that can be caused by financing overlapping
projects conducted in various countries.
3. Strengthening investment directionality
Pooling funding at EU level can ensure higher added value, by addressing EU-wide challenges and
promoting shared priorities like digital and green transitions. 140 141
Coordinated funding ensures that
resources address shared challenges and helps in fostering partnerships with the private sector,
aligning political and industrial priorities.142
This collective approach supports breakthrough
innovations and strategic goals, overcoming coordination limitations among Member States. For
example, ex-post simulations estimate that, without EU funding for research and infrastructures over
decades, essential innovations—like mRNA-based COVID-19 treatments—would have been delayed
by months, hindering critical rapid market release and subsequently societal benefits.
4. OBJECTIVES: WHAT IS TO BE ACHIEVED?
4.1. General objectives
General Objective 1 - Establish an investment capacity to support European competitiveness in
strategic technologies and sectors, including disruptive innovation, decarbonisation, and resilience,
through a more seamless investment journey from fundamental research, applied research to
deployment and manufacturing.
General Objective 2 - Leverage the funding tools of the EU Budget to unlock private, institutional
and national investment in support of strategic technologies and sectors, including for research and
innovation, in the EU.
4.2. Specific objectives
Specific Objective 1 - Promote public and private investments throughout the whole investment
journey, notably R&I, and better leverage the de-risking potential of the EU budget to maximise its
EU added value
Specific Objective 2 - Facilitate access to funding from EU programmes through user-centric, faster,
simplified and harmonised procedures and improve coherence among EU instruments and with
Member States investments
139
European Commission, A new horizon for Europe – Impact assessment of the 9th EU framework programme for
research and innovation (2018).
140
European Commission (2024: 90). Horizon Europe and the Digital & Industrial Transition: Interim evaluation
support study Final Report (“Phase 2” study).
141
Ibid, page 62.
142
European Commission (2024 : 99) Viscido, S., Lotito, A. and Boekholt, P., Horizon Europe and the digital &
industrial transition – Interim evaluation support study – Final report (“Phase 2” study), Viscido, S.(editor), Lotito,
A.(editor) and Boekholt, P.(editor)
30
Specific Objective 3 - Steer and focus investments towards EU strategic sectors and technologies,
including underlying value chains, critical infrastructures,capabilities and skills, and in support of
decarbonisation, security and resilience.
Both the general and specific objectives are: 1) achievable through the set-up and implementation of the
programme, with continuous progress monitoring to address potential challenges; 2) relevant, as they align the
investment goals with the EU's strategic priorities, ensuring they contribute to overall EU competitiveness;
and 3) time-bound, corresponding to the duration of the next Multiannual Financial Framework (MFF).
4.3. Problem tree
Figure 3 below outlines how the general and specific objectives of the Competitiveness Fund interlink
5. WHAT ARE THE AVAILABLE POLICY OPTIONS?
5.1. What is the baseline from which options are assessed?
The baseline assumes a continuation of the current MFF; the same funding programmes in scope of
this impact assessment would continue as they are, with the same instruments, budgets and budgetary
split, and the same rules for participation. The policy options will be assessed against this baseline.
31
5.2. Description of the policy options
In line with the need for ‘simplicity and flexibility, speed and strategic focus’set out in the Political
Guidelines, the impact assessment will assess three options143
affecting the architecture of EU funding
ranging from the continuation of the 14 currently existing programmes related to competitiveness, to
their consolidation into a new Competitiveness Fund:
A. Business-as-usual-plus: light coordination.
B. Enhanced coordination between existing programmes (single rulebook).
C. Consolidation of programmes in a new European Competitiveness Fund.
A. Business-as-usual-plus: Light coordination
Option A would entail incremental progress on the current situation. The funding landscape
for competitiveness would continue to be divided across 14 programmes with their own
individual rulebooks (including different funding rates, eligibility rules, application criteria),
but with the Commission making best efforts to foster coordination across the programmes to
enable improved horizontal consistency across funds. Each programme would continue with
its own specific legal act and rules tailored to its needs and constituency (e.g. different rules
on third country participation), but the Commission could seek to expand on the approach
taken with Strategic Technologies for Europe Platform (STEP) to help individual projects
benefit from cumulative funding under several programmes.
B. Enhanced coordination between programmes and a common rulebook
Option B would go further with harmonising rules across the programmes (including a common
rulebook going further than the individual rulebooks presented in option A), such as aligning the
definition of objectives, strands and pillars, as well as ensuring consistency across the implementing
tools and horizontal legal provisions across programmes (e.g., rules on third country participation,
monitoring and reporting, audits, evaluation procedures, funding rates). All basic acts for programmes
would be based on a common template.
C. Consolidation of programmes in a new European Competitiveness Fund
This represents the most integrated of the options, involving the consolidation of the current Union
programmes for competitiveness into a single fund with a strategic steer.144
This option would be
based on a single (or possibly two – cf. Article 182 TFEU) legislative proposal(s) for a European
Competitiveness Fund.
This option would go furthest in creating a single investment capacity to support strategic sectors and
technologies, disruptive innovation and decarbonisation, through a more seamless investment journey
from fundamental research to applied research, to deployment, manufacturing, services and solutions.
This option would enable a stronger strategic steer prioritising policy rather than programmes, to
select cutting edge projects with the most added value for the Single Market, placing disruptive
innovation at its core, while considering the need for long-term predictability for stakeholders and
investors.
The European Competitiveness Fund would be structured along a small number of policy windows
reflecting strategic priorities crucial to EU competitiveness and resilience (from AI and digital to
space, from clean tech to biotech, from defence to health). Its open architecture would help the Fund
respond quickly to new challenges and priorities by providing overall direction and strategy. It would
be informed by a steering mechanism across the entire MFF, of which the Competitiveness
143
Indicators such as” Time to prepare a proposal”,” Time to grant “,” Average cost of a proposal”, ”Time-to-inform“ are
consistently used to assess the options across the Impact Assessment.
144
In light of their specific legal basis in the Euratom Treaty, Euratom Research and Training Programme and ITER
cannot be merged into a single legislative act.
32
Coordination Tool will form part, to align funding and priorities, and build on input from a
consultative board composed of key stakeholders. This new architecture would allow for the setting
of policy priorities at the level of each window, to effectively target support from early research to
manufacturing and deployment, including infrastructure and specific skills, relying on funding tools
adapted to the project’s needs and offering an appropriate leverage/impact ratio of the EU budget. In
addition, within the European Competitiveness Fund, fundamental research would reflect an open,
bottom-up approach and focus on frontier excellent research while developing appropriate synergies
with other components of the European Competitiveness Fund.
The Fund would flexibly mobilise the entire financial toolbox provided by the EU budget (including
loans, grants, equity, quasi-equity, blending, procurements and guarantees) at the service of
competitiveness policy objectives, whilst also supporting decarbonisation and the digital transition.
Under this option, the budgetary guarantee and financial instruments would become available to all
the policy windows, making them usable across areas of funding under a single Fund. Synergies with
other programmes will also be ensured, thanks to a more integrated approach at strategic level and at
operational level. The integrated structure would also support cross cutting activities enhancing
investment opportunities and bankability of projects across strategic areas (e.g. advisory services,
dedicated support to SMEs), while better enabling synergies with other structural parts of the MFF,
such as pre-allocated envelopes managed with Member States.
5.3. Options discarded at an early stage
Another option would be to partially consolidate existing programmes into a small number of sectoral
programmes covering the whole investment journey from research to deployment for a specific
policy. While this option could enhance policy steer and reduce budget fragmentation on specific
policies, it would not sufficiently improve flexibility to respond to emerging needs across the EU
budget and would miss a number of the benefits put forward by the European Competitiveness Fund
(integrated funding toolbox, integrated steer to support competitiveness across sectors). There would
have been also a very high number of scenarios for such partial consolidation, based on the
heterogenous structuring of the funding landscape available today. This is why it was discarded at an
early stage and not considered in this assessment.
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?
The assessment focuses on key impacts, including: (1) Economic impacts, such as competitiveness,
particularly for SMEs and the European economy as a whole, as well as cost and benefits for the
beneficiaries of the funding; (2) Social impacts, including employment, territorial cohesion, skills
development, health, and resilience; (3) Environmental impacts, such as climate, biodiversity,
circularity, and energy, with a focus on decarbonization efforts.
6.1. Baseline scenario
6.1.1. Economic Impact
Macro-economic impact
Macro-economic impact is captured in a fragmented manner adding from each programme separately.
For example, the InvestEU programme would continue increasing EU’s GDP (by 0.1% in 2023 – the
contribution to GDP growth is expected to be higher in the following years due to the programme
deployment) by mobilising more than EUR 372 billion of public and private investment through an
EU budget guarantee of EUR 26.2 billion.145
InvestEU budgetary guarantee mobilised so far around
EUR 200 billion of private investments (multiplier of 14,8), 146
supporting so far over 55,000 SMEs
and small midcaps, as well as a significant number of midsized companies, larger corporates and
145
InvestEU interim evaluation (SWD(2024) 229 final).
146
InvestEU Operational Reports as at 31/12/2024
33
stand-alone projects. R&I funding through Horizon Europe is expected to increase EU GDP by EUR
30-40 billion per year over 25 years. This amounts to EUR 800 billion to EUR 975 billion overall.
Between 2021 and 2024, 10 077 SMEs were funded by Horizon Europe, for overall EUR 7.4 billion
in grants; a further EUR 1.7 billion in equity investments were approved by the EIC Fund.147
Benefits and costs for relevant beneficiaries
The baseline scenario would bring continuity, predictability and certainty to stakeholders currently
benefitting from EU funding, as they are already accustomed to the existing processes and governance
structures including businesses 148
. Private and public financial entities (including implementing
partners of EU budgetary guarantee) would benefit from the continuity and predictability, supporting
long-term planning and alignment with own operating systems.
Individual programmes’ investments may continue to create economic and environmental benefits
thanks to EU funding.
Administrative costs linked to the application preparation would remain high and procedures
complex for all stakeholders, as the programmes would continue in their current form. Beneficiaries
would continue to face significant administrative costs measured in terms of Time to prepare a
proposal and Time to grant (TTG) a proposal (number of days between the call deadline and the
signing of the grant agreement)149
, which altogether could amount up to 7% of the total fund size. For
applicants, the average cost of a proposal can vary between EUR 5000 and EUR 32,000. For multi-
beneficiary projects, consortium coordinators dedicate between 36-45 person days to prepare a
proposal, while contributing consortium partners spend between 16 and 25 person days. The time-to-
inform (the duration between closure of a call and formal communication of the outcome to
applicants, “TTI”) lies between 86 and 130 days, while time-to-grant (the duration between call
outcome and the signing of the grant agreement, “TTG”) can be as high as 313 days (240 days, on
average), 150
which translates not only into high administrative but also high opportunity costs for
applicants (see Annex 9 for a breakdown of TTI and TTG per programme). Success rate151
(the
percentage of proposals retained for funding out of the total number of eligible proposals) which is
relevant for the applicants in so far as it reflects the likelihood of obtaining funding in a given
programme, would likely remain in the range of 12% - 78% depending on the programme (see Annex
8 for more details). Fragmentation in rules would persist, potentially deterring certain stakeholders
(e.g. SMEs) from applying for EU funds and hindering the EU public administration’s ability to
achieve economies of scale from a more streamlined evaluation process.
Stakeholders could also be affected due to limited flexibility across funds.
Although the current rules allow for some transfer of funds between programmes, this process is
cumbersome and limited. It restricts the ability to adapt to new priorities or respond to unexpected
events, as seen with the introduction of the European Chips Act. Some flexibility is available within
individual funds, but overall, the framework hinders significant transfers between programmes.152
147
SWD(2025) 110 final. Horizon Europe interim evaluation.
148
European Commission (2025): Competitiveness Fund: Assessment of costs and benefits and comparison of options
149
TTG reflects the overall efficiency of the process from proposal submission to the formalisation of funding, but also
Time-to-Inform + Time-to-Sign = Time-to-Grant.
150
Ibid & DEP Interim Evaluation (forthcoming).
151
Low success rates indicate higher competition and greater risk, which can be particularly challenging for smaller
organisations or newcomers. When the success rate is low, applicants face a high likelihood of investing time and
resources in preparing an application that ultimately does not receive funding.
152
As shown by the response to Covid-19, mpox and Ukraine emergencies. Horizon Europe interim evaluation,
forthcoming.
34
In the baseline scenario, SMEs, start-ups, and scale-ups would continue to benefit from current
programmes, with, for example, over 10,000 individual SMEs participating in Horizon Europe
between 2021 and 2024, and 1,800 SMEs in ESA and EU projects through the European Space
programme, which is expected to generate up to 8,000 jobs through the GOVSATCOM initiative153
.
InvestEU will be expected to support over 1 million SMEs 154
and small midcaps, as well as a
significant number of midsized companies, larger corporates and stand-alone projects155
. The SME
Pillar of the SMP would continue to support a wide range of initiatives, having already assisted
292,000 SMEs through the European Enterprise Network.
Finally, the baseline scenario also implies to continue with 14 programmes with different forms of
financial support (such as grants, budgetary guarantees, financial instruments, including equity,
public procurement), but with rules, timelines and governance designed to meet each programme’s
objectives. This allows to provide targeted support to different stakeholders, sectors, and parts of the
investment journey (e.g. research and deployment). However, it also means stakeholders do not
benefit from the full range of instruments available in the EU budget (i.e to benefit from a different
funding instrument, they need to go through a separate application procedure, and blending of
different instruments for one project can be complex), and funding instruments used are sometimes
not sufficiently tailored to the needs of the project (i.e use of grant, when a guarantee or a loan may
have been more efficient – and also could have meant a better use of the EU budget). This inherently
restricts the ability to provide a coherent strategy for addressing Europe’s competitiveness challenges
effectively and may lead to funding gaps and overlaps. It also means the funding landscape is
complicated to navigate for stakeholders, notably smaller entities who are unsure of which funding
opportunities they can benefit from. Last but not least, eligibility requirements are sometimes so
specific, that it creates additional issues for participants, as they need more time to form the right
consortia.156
Market impacts
Without support, SMEs in key sectors would struggle to scale up or enter new markets due to financial
constraints, leading to dependence on foreign suppliers, higher prices, and stagnant market shares.
Large companies would struggle to fund high-risk, high-reward projects, including in research and
manufacturing stages.
In contrast, the current targeted support would effectively support the existing pool of stakeholders
who would not need to adapt to new funding rules 157
.
Research and Innovation impacts
Under the baseline, R&I would be funded through a continuation of Horizon Europe, as today.158
Funding for fundamental research would continue (via the ERC), and fundamental research would
then be transferred to market-creating disruptive innovations mainly through EIC blended funding
for deep-tech startups. The EIC would however remain limited in size, only allowing to transfer a
portion of fundamental research to market-creating disruptive innovations.
153
COM (2018) 447 final. Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE
COUNCIL establishing the space programme of the Union and the European Union Agency for the Space Programme
154
Based on EFSI experience.
155
Invest EU Operational Reports as at 31/12/2024
156
DEP Interim Evaluation p.23. (forthcoming)
157
Crain, N. V., & Crain, W. M. (2005). The impact of regulatory costs on small firms (No. 264). Diane Publishing.
158
See Nelson, 1959; Arrow, 1962; Rosenberg, N. 1990.
35
Cooperation would continue to be a defining feature of R&I in the EU159
. Similarly, progress made
towards widening participation would continue, contributing to narrowing the R&I divide in EU160
.
The baseline would also continue to mobilise private R&I investment, by relying on R&I funding
instruments that have proved effective in leveraging co-investment161
.
However, under this scenario, the funding landscape would not promote a better connection between
research funding and funding aimed at scaling up technologies and bringing them to the market – and
conversely in the ability to steer research towards industrial needs. It can be expected that existing
successful experiences in bridging R&D and market uptake would continue (for example in the green
hydrogen and mRNA162
), but they may remain limited and not form part of an over-arching strategy
to bridge the gap more systematically.
6.1.2. Social impacts
Under the baseline scenarios, current programmes would keep strengthening the creation of
employment. Programmes such as InvestEU would continue to create or maintain jobs (900 000 so
far, a figure that is expected to double upon full implementation).163
In parallel, Horizon Europe is
expected to create or maintain 100 000 jobs during its implementation, followed by an increase in
employment levels of up to 200 000 jobs 8 years after.164
By early 2025, Horizon Europe led to the
creation of 39 543 full time equivalent jobs. 165
On skills, education and training, the EU invests over EUR 153 billion in skills through multiple
programmes166
mostly in pre-allocated envelopes managed by Member States and outside the
envisaged scope of the Competitiveness Fund. The DEP Programme has so far mobilised EUR 307
million in support for advanced digital skills out of a total of EUR 483 million planned for that specific
objective. More than 435 organisations have been setting up higher education programmes and short-
term trainings in key digital areas, tightly connected to industry needs. By the end of 2024, over 20
700 participants had taken part in various education and training opportunities to increase digital
skills involving almost all Member States.167
The SMP Programme has dedicated EUR 32 million
159
Collaborative projects in Horizon Europe currently represent 81% of the budget and bring together stakeholders from
different nationalities (62% of collaborative projects include participants from associated countries), types (including
SMEs), disciplines (including SSH participants) and industries (Horizon Europe Interim Evaluation, forthcoming).
160
Under Horizon Europe, the share of funding for widening Member States has increased to 15%, and 61% of Horizon
Europe collaborative projects include a participant from a widening Member State.
161
European Commission (2023) Mitra, A., Niakaros, K. The Horizon effect: a counterfactual analysis of EU research
& innovation grants.
162
“The added value of the R&I policy for innovation adoption and diffusion. A focus on mRNA and green hydrogen
technology”. Forthcoming. The RADAR model is currently being customised to test policy scenarios in terms of
semiconductor production and deployment in Europe. These policy scenarios will be used to assess the impacts of
different policy mixes and analyse the contribution of instruments such as the Framework Programme for Research
and Innovation, InvestEU, Digital Europe Programme, and EIB loans to economic security and competitiveness in
the context of digital technologies and AI, with a special attention to the hardware aspect (from raw materials to
semiconductor production to chip deployment). The baseline simulations show that, in the absence of shifts in policy
or market structure, the European chip production tends to maintain its declining curve despite a potential growth in
market size, which means additional imports would be needed.
163
InvestEU operational report 2024.
164
SWD(2018) 307 final. Horizon Europe Impact assessment.
165
SWD(2025) 110 final. Horizon Europe Interim Evaluation, page 39.
166
European Skills Agenda - European Commission. These programmes are mainly RRF, ESF+, and Erasmus+. Other
programmes, including Horizon Europe, Digital Europe Programme and InvestEU, also include elements aimed at
enhancing skills. + specify timeline.
167
Digital Europe mid-term evaluation.
36
to Net-zero skills academies168
, while the Battery Academy received EUR 10 million from REACT-
EU. The Commission recently launched a "Union of Skills", which also foresees the review and the
targeted implementation of EU Skills Academies, with the aim of targeting strategic sectors such as
defence, automotive, the circular economy, wind, grids, food, digital. However, the current resource
allocation leads to a fragmented approach. The absence of synergy and coordination impedes the
creation of a skills agenda, affecting the potential for upskilling and reskilling in crucial areas, limiting
Europe's ability to develop a competitive and resilient workforce for the future.
EU funding programmes fostering competitiveness can contribute to cohesion objectives, promoting
cross-border cooperation, the development of value chains in the EU, and supporting smart
specialization strategies. These initiatives help create innovation hubs and clusters, bridging the gap
between urban and rural areas, and contributing to mitigate societal challenges.
With regards to health, EU programmes provide a coherent framework for tackling Europe's health
issues, including through EU4Health actions to strengthen health systems’ resilience and public
health. Horizon Europe has also been successful in progressing in health challenges, promoting
innovative solutions, and making significant contributions to advances in research and treatment of
diseases169 170
.
Finally, on resilience, technological sovereignty, economic security, security of supply, the current
EU funding landscape has made progress in enhancing strategic sectors, reducing external
dependence, and promoting key technologies through initiatives including, for example, European
Defence Fund, EU4Health and Horizon Europe. Existing programmes have shown to play a vital role
in shaping relations between the EU and third countries. However, the baseline scenario also shows
fragmented programmes, limited integration of defence technologies into the civil sector, and reliance
on external funding sources and technology, with impact on the EU's strategic autonomy and
economic security.
6.1.3. Environmental impact
Under the baseline scenario, the climate impact, as well as on environmental aspects (i.e. water
resilience, circularity, nature as well as pollution prevention and control) is expected to be consistent
with the current situation. Horizon Europe would still focus on research and development171
and the
Innovation Fund and LIFE will remain important funding sources to bring innovative technologies to
market (early-of-a-kind applications) and scale them up.
6.2. Assessment of the three options
6.2.1. Option A - Business-as-usual-plus: light coordination
6.2.1.1.Economic impact
Macro-economic impact
The economic impacts of Option A are expected to be similar to the baseline, as the minimal
differences between the two scenarios would not generate significant effects, making it challenging
for macroeconomic modelling to distinguish between them. As a result, benefits and costs for
stakeholders, including businesses, research centres, and financial entities, are likely to remain
unchanged.
168
COM(2025) 90 final. The Union of Skills.
169
See Mugabushaka (2021), A.-M., Meeting the pandemic challenges – Contribution of EU R&I funding to COVID-
19 related research
170
SWD(2025) 110 final. Horizon Europe Interim Evaluation, page 27.
171
In Horizon Europe, in total EUR 39.6 billion will be allocated to R&I in climate, biodiversity, and clean air combined,
with over EUR 27 billion already allocated in 2021-2024.
37
Similarly, market impacts, digitalisation, security, defence and space and R&I impacts under
Option A will also align with the baseline scenario. Companies, especially in strategic sectors, will
still face challenges in scaling up or accessing new markets, affecting the EU's long-term global
competitiveness. Individual programs will continue to contribute to job creation, growth, and
economic benefits, similar to the baseline scenario. From this point of view, option A will not address
the issue of fragmented support through the investment journey, nor will it leverage sufficiently
private investment. It will also not make the access to the EU funding much easier with sufficient
coordination mechanism and flexibility of the funding instruments.
6.2.1.2. Social and Environmental Impacts
It is expected that the social and environmental impacts of Option A will be very similar to those
outlined in the baseline scenario. Specifically, the impacts on employment, skills, education and
training, territorial dynamics, health, and resilience are expected to be minimal compared to the status
quo. In terms of environmental impact, it is assumed that the current programmes will continue to
invest as they have done so far in environment and climate-related research, innovation, and
deployment, covering both R&I and deployment. This will continue to strengthen the EU's role in
clean tech and net zero technologies, allowing the EU to enhance its position in the sector172
.
6.2.2. Option B- Enhanced coordination between existing programmes and a common
rulebook
6.2.2.1.Economic Impacts
Macro-economic impact
For Option B, the following conclusion has been made by means of the JRC’s RHOMOLO modelling
framework173
: the return on investment would be higher than in option A. Over 15 years, the total
benefit (measured as the 15-year GDP multiplier) of the investment per euro spent would be 1.51%
higher than expected. This extra benefit comes from two main sources: (1) making things simpler,
which would make businesses more efficient and add 1.46% to the return; and (2) attracting more
private investment, which would add a small extra boost of 0.05% to the return. The European Union
would also export 30.48% more goods and services to the rest of the world compared to Option A
due to the larger volume of private investment generated by the guarantees174
.
Benefits and costs for relevant beneficiaries
The improved coordination between programs under Option B would create synergies by combining
EU funding, making it easier for businesses to access financial support. A unified rulebook would
simplify compliance, reduce barriers, and streamline application processes, making funding more
predictable and transparent. This would benefit SMEs, start-ups, and large companies, allowing them
to combine funding streams and scale innovation projects more efficiently.
The common rulebook is expected to save applicants time in understanding the specific rules for each
programme they might be interested in. However, applicants will still have to navigate the
opportunities available under the different funds. It is expected that under Option B, the cost to
172
Draghi, M. (2024 :40), The future of European Competitiveness Part A.
173
Further details in Annex 4.
174
The InvestEU programme is characterised by a private investment multiplier of 14 (every euro of EU guarantee
generates 14 additional euro of private investment in the economy). Assuming such a high multiplier for a scenario
mimicking the impact of 14 different funds would be unrealistic, so a lower (more conservative) multiplier of 4 is assumed
in Option A, which becomes 5 in Option B and 6 in Option C. The increase of the multiplier between Option A and B is
justified by the increase coordination between the funds that incorporate guarantees and other financial instruments aiming
to mobilize private funding.
38
prepare the proposal will decrease by 5%175 compared to the baseline, lowering the proposal
preparation cost to the range between EUR 4 750 and EUR 30 400 depending on the complexity of a
programme. A slighty lower effort by consortium coordinator would be needed to prepare a proposal
compared to the baseline option (34-43 person days), as well as bycontributing consortium partners
(15-24 person days). The time-to-inform and the overall time-to-grant is also expected to be
reduced by 5-10176 for applicants under grant-based instruments, especially for frequent or multi-
programme applicants, without generating changes under financial instruments. Option B may have
a moderately positive impact on the programme’s success rate.
The adjustment costs for applicants and beneficiaries under this option would be moderate. The
introduction of a single rulebook would generate short-term adjustment costs, modifying operational
procedures and requiring applicants to adjust to new rules. However, this would lower administrative
costs associated with applications, removing barriers to entry for stakeholders with limited resources
and providing economies of scale to the public sector. Greater strategic alignment would help
businesses and financial entities align their investment strategies with EU policy objectives.
Harmonized rules and requirements would facilitate the deployment of blended instruments,
improving risk management for financial entities and providing tailored financial solutions for final
beneficiaries. Streamlined communication would also improve information about funding
opportunities.
However, Option B does not fully address the issue of complexity, as multiple entry points and
distinct applications would persist. SMEs and start-ups would still face difficulties in finding funding
sources and managing administrative procedures. The challenges stemming from insufficient funding
coordination and flexibility would remain, particularly affecting deep-tech start-ups, climate tech
ventures, and strategic innovation projects.
By introducing a common rulebook and aligned implementation tools across programmes, option B
would have a bigger simplification potential than Option A. This would reduce the learning curve,
facilitate fund blending, and streamline proposal preparation, particularly for those applying to
multiple programmes. However, sectoral distinctions would still require beneficiaries to engage with
different application tracks and portals. Option B is also expected to moderately improve speed and
flexibility. Harmonised rules could lead to faster evaluation and grant agreement processes. However,
improvements would still be bounded by the limits of multi-programme governance.
Market impacts
Competitiveness would be improved compared to the baseline scenario. A stronger strategic
direction and a unified rulebook would positively impact companies access to finance, particularly
benefitting SMEs, start-ups and scale-ups.
While the situation would be marginally improved compared to today due to the enhanced strategic
steer, many competitiveness issues identified earlier would remain unaddressed. These include the
effective mobilisation of private capital, fund inflexibility, and overlaps between existing
programmes.
Research and Innovation impacts
By improving coordination between programmes, Option B will facilitate to some extent the
transition between different stages of the innovation cycle, allowing a better market uptake of research
results. Alongside this, key features of the current landscape (e.g. support for bottom-up,
175
Assumption developed only as an indicative order of magnitude for the relative ranking of options’ effects. The
assumptions are conservative deriving from comparing the different TTI and TTG values presented for the
baseline. Due to the low extent of quantitative evidence available, the estimates are of a high level of uncertainty.
176
Ibid.
39
groundbreaking ideas and collaboration opportunities) will continue to exist in the same way as they
do under the baseline. R&I would be funded in a similar manner to today.
6.2.2.2 Social impacts
With regards to employment, results from JRC’s RHOMOLO modelling framework portray that the
impact of Option B in year 15 is 28% higher than in Option A (again due to the higher volume of
investment). Regarding skills, education and training, Option B would foster greater coherence in
skills development, particularly in strategic sectors like AI, cybersecurity or green technologies. In
the area of health, effects are expected to be very similar, though the further flexibility of the
budgetary allocation would enable a timely and adequate reaction to unforeseen health crises. Finally,
in terms of resilience, technological sovereignty, economic security, security of supply, through
enhanced coordination and strategic steer, programmes can better respond to emerging challenges,
enhancing resilience and technological sovereignty. This approach can bolster economic security by
protecting domestic industries and jobs and ensuring supply chain security. However, it could also
limit access to global markets and expertise.
6.2.2.3 Environmental Impacts
The environmental impacts of Option B are expected to be like those of the baseline, with some
potential for greater positive impacts due to the enhanced strategic steer across programs. Existing
programs such as LIFE, the Innovation Fund, Horizon Europe, and InvestEU are expected to
positively contribute to the environment. Overall, the environmental impacts of Option B are expected
to be somewhat greater than the baseline, but not of a sufficient magnitude to be significantly
noticeable.
6.2.3. Option C- Consolidation of programmes in a new European Competitiveness
Fund
6.2.3.1.Economic Impacts
Macro-economic impact
Option C would provide a higher return on investment over 15 years, with the total benefit per euro
spent being 15.74% higher than Option A. This extra benefit can be broken down into three main
factors: (1) simplifying processes, which would make businesses more efficient and add 3.79% to the
return; (2) attracting more private investment, although this would actually have a very small negative
effect of -0.07% because of the larger volumes177
; and (3) spending the investment money sooner,
which would have a big positive impact of 12.02% because it would generate benefits earlier on. The
European Union would also experience an increase in exports which is 57.53% higher compared to
the first option, mainly because of the larger volume of investments. The Annex 4 contains additional
results obtained with a sensitivity analysis varying the key parameters of the analysis (essentially
providing a range of macroeconomic results). The results of such sensitivity analysis confirm the
robustness of the simulation, as explained in the Annex.
The main driver of the GDP multiplier increase is the frontloading of investment178
, which brings
forward the benefits of the interventions and leads to larger cumulative GDP gains over time.
Effective implementation of budget frontloading is crucial for achieving this potential macro-
economic impact. To maximise productivity gains, it is essential to strike a balance between
177
Larger investment volumes lead to a slightly lower return per euro spent (the larger volumes make each euro
marginally less efficient at generating growth).
178
This macroeconomic analysis highlights that Option C is better able to bring investment forward compared to the
other options, due to the consolidation of programmes and greater budget flexibility. This means that only Option C
allows for effective and efficient frontloading of the budget on a meaningful scale. As a result, frontloading impacts
the GDP multiplier only in the case of Option C. The assumed frontloading in this modelling exercise is not
representative for the overall payment structure of the next EU budget.
40
supporting strategic technologies and maintaining competitive business dynamics. Competitive-
based instruments, a focus on disruptive innovation, and evidence-based priority setting can help
achieve this balance. Budget flexibility can affect the proportion of the budget used for each
instrument, and achieving the necessary balance between flexibility and predictability will be an
important success driver. The overall impact of Option C on EU productivity is likely to be
positive, driven by its ability to allocate resources more efficiently and effectively.
Benefits and costs for relevant beneficiaries
Option C is expected to reduce administrative costs for beneficiaries by integrating access points and
introducing a common rulebook, simplifying the funding process and creating a more efficient,
business-friendly environment, particularly benefiting high-growth industries, innovative start-ups,
and top-down projects requiring long-term investment support.
Based on the quantitative estimates, this option emerges as the one with the lowest unit cost per
proposal in terms time to search for opportunities for grants and advisory services. This reduction in
search time results from applicants being able to focus their search within the Competitiveness Fund,
rather than navigating multiple program frameworks. Furthermore, this option is expected to have the
shortest proposal preparation time for grants, expected to decrease by 10%179 compared to the
baseline, translating into monetary costs in the range of EUR 4500 – EUR 28 800 per proposal.180
This option is also the one that requires the lowest efforts by consortium coordinators to prepare a
proposal (32-41 person days), as well as by contributing consortium partners (14-23 person days).181
Time-to-inform and the time-to-grant is also expected to be reduced by up to 10-15 days182 for
applicants under grant-based instruments, especially for frequent or multi-programme applicants,
without generating changes under financial instruments. Option C could potentially increase the
average success rate of most oversubscribed programmes. However, success rates for specific types
of applicants such as SMEs or projects could even decline. The option could either empower or
sideline SMEs, depending on whether the fund design actively incorporates SME-friendly features.
Some adjustment costs for applicants and beneficiaries would likely materialise. The transition to
a single, integrated fund would require adaptation by organisations accustomed to the current
structure. However, while initial adaptation to the new fund would be needed, beneficiaries would
only need to undertake this learning process once, rather than repeatedly for multiple programmes.
Building upon existing features, such as the Funding & Tenders portal and the STEP Portalcan help
mitigate disruptions, and robust governance structures can help manage the transition. Ultimately, a
simpler and more readable structure could broaden access to funding programmes to new
beneficiaries, and stimulating innovation across sectors.
Preserving predictability for bottom-up research will help safeguard the innovation capacity of the
EU. A unified application process would increase certainty for applicants about possible funding
opportunities, but the flexibility of Option C can also increase uncertainty due to changing political
priorities. It will be important to ensure the appropriate balance between predictability and flexibility.
Option C would expand access to financial tools, and integrate advisory and business support
services, enhancing access to finance and improving project bankability. As option C will also include
a standardised advisory offer with a focus on value-added and maximised efficiency of leveraging
179
Assumption developed only as an indicative order of magnitude for the relative ranking of options’ effects. The
assumptions are conservative, deriving from comparing the different TTI and TTG values presented for the
baseline. Due to the low extent of quantitative evidence available, the assumption is very conservative on purpose
180
Ibid.
181
Methodological note: the three options would not have a significantly different impact on the way the consortium size
impacts on costs. It should also be noted that consortium size is not seen as a cost category but as an influencing factor.
182
Ibid.
41
public funds to attract private investments, it will allow to coordinate the choice of financial
instruments that are most suitable for different types of beneficiaries and for the objective of
mobilising private capital.
Consistency across implementing tools and horizontal legal provisions would reduce administrative
costs.
The consolidation into a single fund would likely be advantageous for SMEs as they typically lack
the resources to navigate complex, fragmented systems. Moreover, the strategic focus on disruptive
innovation could offer SMEs new opportunities in high-growth areas.
Option C will increase budget flexibility, allowing for strategic allocation of resources with the
appropriate safeguards, and provide an opportunity to offer a diverse range of financing instruments,
while respecting the need for continuity of funding for certain activities. Overall, Option C aims to
create a more efficient and business-friendly funding environment with potential for simplification,
flexibility and speed. Its implementation will be supported by a transition process, enabling
stakeholders to adjust to new opportunities.
As such, option C addresses the issues of fragmented support through the investment journey, it offers
the highest potential for leveraging private investments, making the access to the EU funding much
easier with sufficient coordination mechanism and flexibility of the funding instruments.
Market impacts
The proposed consolidation of multiple programs into a single structure is expected to have a positive
market impact if carefully implemented: It would enhance the competitiveness of European
companies, including SMEs, start-ups, scale-ups, and large enterprises, by making the funding
landscape more accessible and strategically aligned. This would support European strategic autonomy
by reducing reliance on foreign supply chains and mitigating critical dependencies on external actors,
ultimately improving the market position of EU companies both within the Single Market and
globally, in coherence with Global Europe and synergies that both programmes create.
The consolidation would also provide additional flexibility, expanded opportunities for mobilising
private capital, and a substantial reduction in complexity, overlaps, and administrative burdens. It
would offer effective and streamlined support to companies, particularly SMEs, with reduced
administrative burdens, greater visibility of EU funding opportunities, and simpler access to support.
It would also better connect research with market development, and conversely better align research
priorities with industrial needs – while maintaining a bottom-up approach especially for fundamental
research.
This is based on the experience with the InvestEU Programme, which is he most useful benchmark
of an EU initiative that pooled a number of financial instruments under a single, streamlined
framework and the EU’s flagship investment programme aimed at mobilizing public and private
financing to support EU priorities and ultimately increasing the EU’s competitiveness.As of June
2024 InvestEU has successfully mobilized EUR 280 billion in investments using a EUR 26,2 billion
guarantee. It built on the success of EFSI, which mobilised over EUR 500 billion in investments over
a few years, using a relatively modest EU guarantee. InvestEU streamlined the EU ’investment
landscape by pooling EFSI and a number of other financial instruments, bringing them under a single,
streamlines framework. According to the mid-term evaluation published in October 2024, InvestEU
is on track to meet its objectives. It performed strongly in three critical areas by (a) generating private
investment, providing additionality (supporting projects that wouldn’t otherwise have happened) and
aligning with EU policy goals. 183However, the success of the proposed option depends on careful
implementation and a nuanced steering mechanism that considers economic and market-based criteria
183
EP, EGOV, InvestEU Programme: functioning, performance and future challenges, April 2025
42
to avoid market imbalances and maintain the playing field. Overall, the proposed consolidation has
the potential to substantially strengthen the competitiveness of the Single Market, fostering
innovation, investment, and sustainable economic growth.
Research and innovation impacts
Option C introduces flexibility in funding allocations and a balance will have to be ensured between
flexibility and predictability. Predictability would remain for R&I funding, same as today, in line with
Treaty obligations. At the same time, consolidation into one Fund covering the whole investment
journey can facilitate the market uptake of research results and better articulate applied research with
industrial priorities. Option C would entail dedicated policy windows for strategic areas, enhancing
deployment of technologies from research to market and increasing policy and financing coherence.
6.2.3.2 Social Impacts
Option C is expected to have several social impacts. The employment impact in Option C is 53.58%
higher than in Option A, mainly due to the larger volume of investment.184
On skills, education, and
training, it would integrate initiatives into a unified framework, aligning with industry needs in
strategic sectors like clean tech and AI. This alignment would promote targeted investments in
reskilling and upskilling, improving synergies among education, research, and business185
, and
allowing for rapid adaptation to emerging trends.
In terms of territorial effects, Option C is anticipated to unlock significant economic growth in
regions with strategic advantages, driving innovation, development, and overall productivity. These
areas are expected to become magnets for investment, talent, and entrepreneurship, creating a self-
reinforcing cycle of prosperity. 186
To ensure balanced progress, it will be important to complement this strategy with measures that
promote inclusive development and cohesion across all regions and synergies with other parts of the
MFF focused on national and regional funding.
In the health sector, Option C provides a streamlined and flexible funding mechanism that would
reduce administrative burdens, enhance efficiency, and enable faster responses to crises.
Regarding resilience, technological sovereignty, and economic security, Option C supports more
coordinated decision-making which would in turn increase its social impact but may limit
international cooperation.
6.2.3.3 Environmental impacts
For the EU in particular, investing in research and technologies for decarbonisation and net zero is
important given its climate neutrality target for 2050 (net zero). The environmental impacts of
Option C are closely tied to its prioritisation of decarbonisation and clean tech as key sectors and
technologies. This focus could lead to a positive impact on climate. Under Option C, the impact on
biodiversity, water, circularity, pollution and energy will depend on their prioritisation as key
investment sectors.
184
The higher private investment multiplier is responsible for a difference of +48.13% compared to Option A, and the
additional supply-side effects for +5.45%.
185
See Perkmann, M., King, Z., & Pavelin, S. (2011). Engaging excellence? Effects of faculty quality on university
engagement with industry. Research policy, 40(4), 539-552; Bikard, M., & Marx, M. (2020). Bridging academia and
industry: How geographic hubs connect university science and corporate technology. Management Science, 66(8),
3425-3443.
186
Youtie, J., & Shapira, P. (2008). Building an innovation hub: A case study of the transformation of university roles
in regional technological and economic development. Research policy, 37(8), 1188-1204.
43
Furthermore, investments in clean technologies are particularly exposed to high levels of uncertainty,
including in regulatory and policy frameworks – especially because these reflect negatively on private
funders, which may complement public finance.187
Therefore, the appropriate balance between
predictability and flexibility will have to be struck to ensure the model’s success and the impact on
climate and environment is positive.
7. HOW DO THE OPTIONS COMPARE?
7.1. Effectiveness188
Three options are considered for improving investment support: (1) Option A would bring limited
improvements due to fragmented financial instruments and lack of integrated tools; (2) Option B
would offer moderate improvements by aligning objectives and governance under a common
rulebook but would still lack continuous funding and flexibility, as described in Section 6.2.2; (3)
Option C would significantly enhance investment support with a fully integrated framework, unified
governance, and simplified funding, allowing for seamless support from research to market
deployment, as well as procurement, manufacturing and maintenance.
Effectiveness (towards
its likelihood of
achieving the
objectives – outcomes
and impacts)
Option A – Business-as-usual-
plus
Option B – Enhanced
coordination
Option C – Full
consolidation
S01 - Promote public
and private
investments
throughout the whole
investment journey,
notably R&I, and
better leverage the de-
risking potential of the
EU budget to maximise
its EU added value.
0 + +++
Lack of continuous funding across the
investment journey.
Suboptimal use of financial instruments.
Limited integration of financial tools,
limiting blending opportunities.
The investment journey would be
fragmented between 14 programmes.
Programmes, including R&I
programmes, are structured as they are
today
Lack of continuous funding across the
investment journey.
Suboptimal use of financial instruments.
Easier combination of different funds.
As Option A but an easier investment
journey between R&I and deployment
is expected given the single rulebook
and enhanced coordination
Expected higher mobilisation of
private investments.
Continuous support alongside the
entire investment journey, from
research to deployment and
manufacturing.
Considering the availability of a
broader portfolio of financial tools,
based on market demand, potential
higher private leverage and
tailoring of funding instruments
used to needs of projects.
Balance between flexibility and
predictability to be ensured to
avoid potential increase
uncertainty, and investment risk
187
There is ample evidence that demonstrates that uncertainty severely hampers private investment in environmental and
climate innovation and deployment. For example: “green investments may be particularly exposed to high levels of
uncertainty related to potential failures of new green technologies and innovations, supply chain disruptions and
unforeseen changes in regulatory and policy frameworks, all of which increase risks for banks and financial investors”
(Nerlich, C. et al. (2025), page 46). Additional evidence suggests that “abrupt policy changes generate substantial
uncertainty, making it difficult to anticipate how the regulatory framework will unfold in the future. Faced with high
levels of uncertainty about future environmental and climate policy, firms and investors may prefer to adopt a wait-and-
see behavior and refrain from investing in the low-carbon economy” (Noailly, K. et al. (2022). Does environmental policy
uncertainty hinder investments towards a low-carbon economy? NBER Working Paper Series. Similarly, “changes in
numerous “support schemes”, including FIT, tax credits, guarantees, and other government support mechanisms, have
discouraged some investors” (Block, E. (2012). Finance, forecasts and predictability, Renewable Energy Focus 5(13).
188
The assessment in the comparison table below is based on the analysis provided by the supporting study which takes
into consideration the following elements: Direct economic benefits, incl. continuity of funding, ease of access to finance,
ease of reallocation of funds; Indirect economic benefits, incl. strategic coherence with EU priorities; Direct/indirect non-
monetary benefits.
44
Effectiveness (towards
its likelihood of
achieving the
objectives – outcomes
and impacts)
Option A – Business-as-usual-
plus
Option B – Enhanced
coordination
Option C – Full
consolidation
S02 - Steer and focus
investments towards
EU strategic sectors
and technologies,
including underlying
value chains, critical
infrastructures,
capabilities and skills,
and in support of
decarbonisation,
security and resilience
0 ++ +++
Lack of strategic steering across
programmes.
Lack of flexibility to respond to
emerging needs.
Each programme has a defined
(established) purpose and objective,
targeting specific sectors and type of
funding.
Complex funding landscape with
programmes structured in different
ways, funding gaps and overlaps
Enhanced strategic steer across the
different programmes.
Lack of flexibility to respond to
emerging needs.
Same as Option A, but through
enhanced coordination across
programmes, slightly enhanced
strategic steer and avoidance of
overlaps
Clear strategic direction: A
reinforced policy steering
mechanism can help identify key
priorities and enable flexible and
agile responses to emerging needs.
Interdisciplinary approaches:
Coordinated policy windows can
facilitate collaboration and
innovation to address complex
challenges like decarbonisation,
security, and resilience.
Innovation and growth: Strategic
investments can support market-
creating disruptive innovations,
driving long-term growth and
competitiveness.
S03 - Facilitate access
to funding to EU
programmes through
user-centric, faster,
simplified and
harmonised
procedures and
improve coherence
among EU instruments
and with Member
States investments
+ + +++
Highly fragmented funding landscape.
Each programme keeps its own
individual rulebook.
efforts to foster coordination across
programmes.
Existence of an incomplete single-entry
point for EU funds (Funding & Tenders
Portal) which does not include shared
management funds
Duplication between efforts from
several programmes
Highly fragmented funding landscape.
Some degree of simplification for users
due to alignment in the basic provisions
of the individual programmes.
Harmonisation of rules across the
programmes (including a common
rulebook).
Adjustment costs will affect applicants
with previous experience of the Funds
(e.g. over 150 000 FP applicants).
Leaner and more streamlined
rulebook for a use-centric
approach, resulting in simpler
application and reporting.
Easier access to information and to
EU funding and advisory support
(single entry point).
Enhanced visibility and recognition
of EU funding.
Harmonisation of 14 programmes
into one single fund could take
time and for stakeholders and
implementing bodies,
communication and support will be
key in the transition phase
Some operational differentiation
will presumably continue to exist to
avoid disproportionate access
barriers for some stakeholder
groups (e.g. SMEs, academia) and
cater for variety of funding needs.
Possible unintended
consequences
No significant change compared to the
status quo.
Harmonising rules would lead to a
funding landscape that, compared to
the status quo, facilitates the
participation of non-incumbents in
application processes of different
programmes. As such, this option
would, to some extent, lower a barrier
to entry, and increase the potential to
support EU competitiveness.
The consolidation into a single fund
could make EU support for
competitiveness more attractive
for small entities currently
constrained by the perception that
the initial familiarisation with rules
of a heterogeneous set of different
programmes is highly burdensome.
Through this option, EU support
could become more inclusive for
non-incumbents, lowering a barrier
to entry. By reaching a broader
base of applicants, the Fund would
represent a progress in the
achievement of the goals behind
EU support for competitiveness.
45
Effectiveness (towards
its likelihood of
achieving the
objectives – outcomes
and impacts)
Option A – Business-as-usual-
plus
Option B – Enhanced
coordination
Option C – Full
consolidation
Moreover, this option would
facilitate synergies across different
phases of the investment journey –
thereby increasing the Fund’s
potential to achieve its goal of
increasing EU competitiveness.
7.2. Efficiency
Three options are considered for efficiency gains: (1) Option A: Limited gains due to remaining
administrative burdens; (2) Option B: Moderate gains through standardisation, reducing costs and
easing applications; (3) Option C: Significant gains from a single, integrated Fund with streamlined
processes, despite initial adaptation challenges.
Efficiency (relationship
between the expected
benefits of a policy
option and the
resources required to
implement it)
Option A – Business-as-usual-
plus
Option B – Enhanced
coordination
Option C – Full consolidation
Governance
0 + +++
Each programme keeps its own
governance structure.
A light coordination mechanism across
the different funds would be in place.
Funds would exercise considerable
degree of autonomy in setting their
work programmes, in line with the
Commission’s priorities.
Internal and external governance
processes (i.e comitology) are the same
as today
Coordination costs will be present.
Fragmented governance structure with
some degree of coordination.
Similar to Option A. On the one hand,
coordination costs will decrease thanks
to the introduction of a single rulebook
and template for all the legal acts of the
programmes.
Adjustment costs over an extended
time period are also expected to be
present.
Streamlined governance to respond
quickly to new challenges and priorities.
Key stakeholders consulted as part of
the steering mechanism.
Depending on the actual structure
agreed upon for steering the priorities
and budget of the Competitiveness
Fund, coordination costs could either
increase or decrease (e.g. if heavy
governance processes for work
programmes, as in the case of Option
A).
Adjustment costs are expected during
the transition, including setting up
internal governance mechanisms and
internal coordination.
Synergies will be ensured between the
Competitiveness Fund and other MFF
programmes, at the strategic and
operational level.
Improved coordination in selecting the
most suitable instruments for different
types of beneficiaries, stages of
investment journey, and the objective of
mobilising private capital.
Benefits
+ ++ ++
+ Current beneficiaries will benefit from
a stable landscape
+/- Targeted instruments within existing
programmes will address efficiently the
specific needs of different stakeholders.
At the same time, offer of funding
+ Time-to-inform and Time-to-grant are
expected to be reduced by tens of days.
+ This option is expected to simplify the
rules for applicants and beneficiaries
through a common rulebook, facilitating
+ This option would expand access to
financial tools, integrate advisory and
business support, enhance access to
finance and prove project bankability. +
This option will increase budget
flexibility, allowing for strategic
allocation of resource with appropriate
46
Efficiency (relationship
between the expected
benefits of a policy
option and the
resources required to
implement it)
Option A – Business-as-usual-
plus
Option B – Enhanced
coordination
Option C – Full consolidation
instruments available inherently limited
by existing programmes – need to go
through a separate application to
benefit from a different type of
instruments (i.e grants vs loan)
+/- Minimal flexibility across
programmes and no possibility to realign
when new funding needs arise
(predictability for stakeholders; at the
same time, stakeholders in need would
not benefit from new funding)
blending and streamlining proposal
preparation.
+ This option would moderately improve
speed and flexibility-
safeguards, and provide an opportunity
to offer a diverse range of financing
instruments, while respecting the need
for continuity of funding for certain
activities.
- Appropriate balance between flexibility
and predictability would need to be
ensured. Long-term planning of funding
needed for certain stakeholders
+ This option aims to create a more
efficient and business-friendly
environment with the highest potential
for simplification, flexibility and speed.
Costs
+/- + ++
- The cost to prepare the proposal would
not decrease relative to the baseline
scenario, i.e: for applicants, the average
cost of a proposal is likely to remain
between EUR 5000 and EUR 32,000.
- The time-to-inform is likely to remain
between 86 and 130 days, while time-to-
grant is expected to stay as high as 313
days (240 days, on average), which
translates not only into high
administrative but also high opportunity
costs for applicants.
+ No adjustment costs in getting
accustomed to new procedures.
+ The cost to prepare the proposal
would decrease by 5%, lowering the
proposal preparation cost to between
EUR 4 750 and EUR 30 400.
+ Time-to-inform and the overall time-
to-grant expected to be reduced by 5-10
for applicants
+/-The adjustment costs for applicants
and beneficiaries under this option
would be moderate.
+ The costs to prepare the proposal are
expected to decrease by 10% compared
to the baseline scenario, which would
translate into a range of EUR 4 500 and
28 800 per proposal.
+ Time-to-inform and the time-to-grant
is expected to be reduced by up to 10-15
days for applicants
-Adjustment costs would be high for
applicants and beneficiaries and would
require a significant adaptation by
organisations accustomed to the current
structure. However, adjustment costs
are one-off costs and the benefits of
simpler application are expected to
outsize any adjustment costs.
Possible unintended
consequences
No significant change compared to the
status quo.
+/- Consistency in definitions, tools and
horizontal provisions would reduce
application costs in general, but, if not
well-conceived, may risk increasing
application burdens for stakeholders
currently benefitting from simplified
application procedures.
+ The improvement for applicants would
be significant in the situation where the
new regulatory framework includes
simplification measures exceeding those
already on track to be applied under the
baseline.
+/- The initial reorganisation of
management structures and
administrative procedures may result in
some delays in the first phases of
implementation.
Benefits/costs for the different beneficiaries
+ ++ +++
47
Efficiency (relationship
between the expected
benefits of a policy
option and the
resources required to
implement it)
Option A – Business-as-usual-
plus
Option B – Enhanced
coordination
Option C – Full consolidation
European companies,
including SMEs
+ familiar mechanisms to access funding
for existing beneficiaries.
- limit responsiveness to emerging
needs.
- struggling with different rulebooks and
application procedures across the
different programmes.
+ easier access to funding, thanks to the
alignment in the basic provisions of the
individual programmes (however, still
limited capacity to provide a coherent
investment environment)
- struggling to find the appropriate
funding sources and to manage
overlapping administrative procedures.
- gaps in the funding along the
investment journey.
+ Clearer and faster access to EU funding
thanks to a solid strategic alignment
enabling the creation of a credible and
attractive investment environment
+ Continuity in EU support at different
stages of the investment journey.
+ Represented in the consultative board,
as part of the steering mechanism.
+ Streamlined advisory/ support service.
+ Broader range of funding instruments
available thanks to integrated financial
toolbox (grants, loans, guarantees,
equity).
- Learning costs to adapt to a new
funding landscape for existing
beneficiaries.
+ Decrease in application costs reduce
the comparative disadvantage of SMEs
vis-à-vis larger companies when applying
for funding (SMEs tend to have less
resources to spend on funding
application)
Research
organisations (ROs,
academia)
+ + ++
ROs and academia will continue to be
able to apply for programmes in their
current form. Adaptation and
adjustment costs will be minimised.
+ familiar mechanisms to access funding
for previous beneficiaries.
- no easy transition between different
stages of the innovation cycle.
+ It facilitates to some extent the
transition between different stages of
the innovation cycle.
- the alignment of provisions might
complicate the administrative work of
applicants and beneficiaries, leading to
adaptation and adjustment costs.
+ Represented in the consultative board,
as part of the steering mechanism.
+ Streamlined advisory/ support service.
+ It can facilitate the market uptake of
research results and better articulate
applied research with industrial
priorities.
- Adjustment costs are expected due to
possible changes in eligibility rules and
project reporting rules.
Researchers
+ + ++
As for ROs and academia. As for ROs and academia. As for ROs and academia.
Private and public
financial entities
+ + +++
+ continuity and predictability of existing
funding instruments.
- lack of flexibility in structuring funding
solutions, including blended products.
+ easier alignment of the financial
entities’ investment strategies with EU
policy objectives.
- lack of flexibility in structuring funding
solutions, including blended products.
+ Represented in the consultative board.
+ greater flexibility in structuring funding
solutions, including blended products.
- possible uncertainty in the early stage
of implementation due to the new
funding landscape.
48
7.3. Coherence
Three options are considered: (1) Option A: Limited coherence improvements due to unaddressed
fragmentation; (2) Option B: Moderate coherence improvement through standardised rules, but
fragmented governance remains; (3) Option C: Significant coherence enhancement through
consolidated funding, reduced duplication, and broken sectoral silos.
Coherence
Option A – Business-as-usual-
plus
Option B – Enhanced
coordination
Option C – Full consolidation
Internal coherence
0 + +++
+ EC coordination across the
programmes to enable improved
horizontal consistency across funds.
- 14 different programmes with their
own entry-points.
Similar level of internal coherence as the
baseline. The coordination tool would
diminish potential deficiencies in this
regard.
+ Alignment in the basic provisions of the
individual programmes.
- 14 different programmes with their
own entry-points.
Slightly higher internal coherence than
Option A, considering the higher level of
strategic steer, the existence of a single
rulebook and the coordination tool.
+ Common rulebook and single-entry
point.
+ Coordination between the different
instruments (grant, guarantees, equity
etc.).
+ Easier exploitation of the synergies
among instruments and actions falling
under the same programme.
Higher level of internal coherence. One
single fund, one single rulebook,
increased strategic steer and common
objectives.
Synergies with other
EU programs
0 + ++
- Limited synergies due to the existence
of multiple distinct programs, conflicting
policy objectives and inconsistent
provisions in their basic acts.
Synergies provisions in all the 14
programmes have limited impact on
actual synergy gains. Improved synergies
based on the coordination tool.
+ improved synergies with other EU
programs compared to Option A.
- Limited synergies due to the continued
existence of multiple distinct programs.
Coordination and clarity enhanced
based on the single rulebook, higher
strategic steer and the coordination
tool.
+ Thanks to the consolidation, there will
be a limited number of EU programmes
to synergize with.
+ Steering mechanism to ensure
synergies at the level of the MFF.
+ The Competitiveness Coordination tool
will ensure synergies with nationally and
regionally pre-allocated envelopes, for
example on further supporting
competitiveness and continuation of
funding for beneficiaries at different
governance level.
+ Synergies with Global Europe Fund on
aspects concerning the competitiveness
of EU industries and companies in third
countries (i.e. accession countries,
emerging markets and developing
economies.
Synergies with EU
initiatives/policies
0 ++ +++
- synergies with broader EU initiatives
remain sub-optimal due to the
fragmentation of EU funding, making it
harder to maximize the impact of EU
funding on strategic priorities.
+ Enhanced strategic steer across
programmes.
An enhanced strategic steer will ensure
that all programmes are in line with
broader EU priorities, but this will likely
be very similar to Option A and the
baseline, in practice.
+ Strong alignment with EU priorities
thanks to the steering mechanism.
Priority setting for strategic sectors and
technologies will mean that the Fund
provides support to well-defined
priorities, which are expected to reflect
broader EU strategic priorities, while
respecting the needs of sectors with a
stronger bottom-up drive.
Possible unintended
consequences
No significant change compared to the
status quo.
-Due to the separation of EU support to
competitiveness into multiple separate
programmeswindows, governance and
strategic oversight could remain
challenging.
+/-While this option provides the most
significant improvement in terms of
coherence, a risk arises in terms of
uniformisation of rules and
implementation tools with a need to
49
Coherence
Option A – Business-as-usual-
plus
Option B – Enhanced
coordination
Option C – Full consolidation
-At the same time, harmonisation of
rules and implementation tools could
generate the risk that they may not
sufficiently reflect the specificities
ofwould need stakeholder to get use to
different implementation rules than in
existing programmes,
cater for the specificities of the various
targets.
8. PREFERRED OPTION
After assessing the impacts, effectiveness, and efficiency of the three policy options, Option C
(consolidation of programmes into a new European Competitiveness Fund) emerges as the preferred
choice. This option offers a comprehensive set of policy measures to overcome current deficiencies
in the EU's funding landscape related to competitiveness. It would establish a unified investment
capacity to support strategic sectors and technologies, facilitating a seamless investment journey from
research to deployment on EU-level and strengthen EU’s investment capacity and leverage tool.
Option C would simplify and harmonize application rules and requirements, introducing a single
access point and a unified rulebook for applicants. This would reduce complexity, eliminate overlaps,
and allow the EU to fully harness its potential to mobilize private capital and increase budgetary
flexibility. The new fund would also strengthen connections between fundamental research and
advanced stages of research, innovation manufacturing and deployment, ensuring a dynamic
economic structure within the EU - with the objective to promote Europe's resilience and leadership
in the era of global innovation.
To ensure the success of Option C, the EU will implement measures to minimize potential negative
impacts including by balancing flexibility with the need for predictability for long-term investments
and maximizing the benefits of R&I investments. This requires ensuring a sufficient degree of
predictability for R&I activities, including for fundamental research and disruptive innovation, and a
clear distinction between R&I and deployment activities. The proposed European Competitiveness
Fund (ECF) aims to simplify and improve EU funding by consolidating 14 existing programs into
one fund. The ECF is designed to reduce regulatory costs, enhance efficiency, and improve
responsiveness to economic crises, ultimately supporting EU competitiveness.
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?
This initiative will be monitored through the performance framework for the post-2027 budget, which
is examined in a separate impact assessment. The performance framework provides for an
implementation report during the implementation phase of the programme, as well as a retrospective
evaluation to be carried out in accordance with Article 34(3) of Regulation (EU, Euratom) 2024/2509.
The evaluation shall be conducted in accordance with the Commission's Better Regulation Guidelines
and will be based on indicators relevant to the objectives of the Fund. The latter shall comprise output,
outcome and impact SMART (specific, measurable, achievable, relevant, and time-bound) indicators
to capture the progress towards achieving the Fund’s specific and general objectives along impact
pathways in the short-, medium- and long-term respectively.
50
Annex 1: Procedural Information
1. LEAD DG, DECIDE PLANNING/CWP REFERENCES
Lead DG: DG GROW, DG RTD, SG and DG BUDG
Decide Planning: N/A
CWP Reference: N/A
2. ORGANISATION AND TIMING
The IAs work started in the second half of 2024 guided by the Inter Service Steering Group (ISSGs),
which was chaired by SG in close coordination with BUDG. The ISSG was composed of the
representatives of LS, JRC and the DGs responsible for the programmes in the scope of this initiative
(GROW, RTD, COMP, MOVE, ENER, ENV, ECFIN, CLIMA, DEFIS, CNECT, SANTE, FISMA,
MARE, DIGIT, INTPA, HERA, HOME). The ISSG met five times. with the last meeting taking place
on 24 April 2025.
External study: an external study was commissioned and conducted between March and May 2025
resulting in two key deliverables: assessment of costs and benefits and comparison of options as well
as the analysis of the Public Consultation. Both fed into the IA report.
Consultations: a Public Consultation (PC) ran between 12 February 2025 - 07 May 2025. It was part
of the overall public consultation exercise on the next MFF with one particular strand covering EU
funds that boost competitiveness: EU’s next long-term budget (MFF) – EU funding for
competitiveness.(for the details and the results of the consultation, please see the Synopsis report in
Annex 2).
3. CONSULTATION OF THE RSB
An upstream meeting RSB and SG, BUDG, RTD, GROW took place on 3 April 2025.
The draft Impact Assessment Report was submitted to the RSB on 19 May 2025 and was examined
during the RSB meeting of 4 June 2025. The RSB issued an opinion on the draft Impact Assessment
Report on 13 June 2025.
Below are recommendations of the RSB:
On scope: The report does not sufficiently
elaborate the definition of competitiveness, nor
does it indicate how the ECF is to strengthen
European competitiveness. The interplay
between competitiveness and security is not
sufficiently addressed.
The definition of competitiveness is now
explained upfront in the section 1.1 of the report.
The revised report also reflects the links
between ECF and European competitiveness
(section 1.2). Finally, the interplay between
competitiveness and security is clarified (section
2.1). All the 14 programmes in the scope of this
IA are mentioned in the section 1.2. The
discontinuation and re-orientation of
programmes is discussed under the sections
comparing the different options (both under
section 6 assessing the three options and section
7 comparing the options), which outlines
adjustment costs and benefits for relevant
beneficiaries.
51
On the problem definition and on the use of
evaluations: The report does not consistently
build on evidence from evaluations. It does not
specify the market and regulatory failures and
the societal problems, including their
magnitude, which this intervention is intended
to address.
More targeted examples from interim and ex
post evaluations feature in parts of the problem
definition (section 2). The regulatory and market
failures are more prominently visible in the
revised report (section 2.1 and 2.2). The
problem definition now distinguishes more
clearly between problems and problem drivers
(Section 2.1)
On the intervention logic and objectives: The
proposed options do not address all identified
problems. The proposed objectives are not
S.M.A.R.T.
The section 4 on general objectives now further
clarifies that they are both 1) achievable by way
of set-up and implementation of the programme
where the progress will be continuously
monitored to address potential challenges; 2)
relevant as they align the investment goals with
the EU's strategic priorities, ensuring they
contribute to overall EU competitiveness, and 3)
time-bound to the duration of the next MFF
(post 2027).
On options: The report does not adequately
identify the full range of options.
The revised report clearly delineates which
problems and problem drivers related to
competitiveness will be addressed by the
initiative (Section 2.1). In addition, the revised
report now explicitly mentions how the different
problem drivers will be tackled by the three
policy options (section 6.2.1.1, 6.2.2.1. and
6.2.3.1).
On comparison of options and cost-benefit
analysis: The report does not adequately assess
the costs and benefits of the options
A clearer presentation of the comparison of
option is included outlining both quantitative
and qualitative costs for beneficiaries, compared
to the baseline scenario (section 7.2).
On governance: The report does not sufficiently
describe the governance mechanisms.
As outlined in the description of Option C
(Section 5.2), the ECF would be organised
around a limited number of thematic policy
windows reflecting strategic priorities essential
to enhancing EU competitiveness and resilience.
These windows will encompass the full range of
policy areas covered by the programmes
consolidated under the ECF. The specific list of
policy windows will be set out in the legal act.
Investment priorities will be determined through
a steering mechanism that spans the entire
Multiannual Financial Framework. It will be
designed to ensure alignment between funding
and strategic objectives. It will also draw on
input from a consultative board comprising key
52
stakeholders and will include the
Competitiveness Coordination Tool.
On unintended consequences: The report does
not analyse the unintended consequences that
can result from the intervention
Section 7 comparing the different options now
includes a dedicated analysis of possible
unintended consequences.
On coherence: The report does not sufficiently
specify how the ECF links with other parts of
the post-2027 MFF,
The revised report reflects the links between the
ECF and other parts of the post-2027 MFF
On future monitoring and evaluation: The report
is not clear what monitoring and evaluation
arrangements will be put in place to measure the
achievement of the ECF objectives
The framework for assessing the ECF will be
based on the development of a simplified and
single performance framework for the post-2027
budget, which will include indicators relevant to
the objectives of the programme. The
performance framework of the next MFF is the
subject of a separate impact assessment,
prepared by a dedicated ISSG.
4. EVIDENCE, SOURCES AND QUALITY
This IA is based on an extensive desk review carried out by the European Commission and, for the
cost-benefit analysis and public consultation synopsis report, an external study was tendered. The
desk research covered approximately 140 documents, including previous Impact Assessments, mid-
term evaluations for 2021-2027 and ex-post evaluations for 2014-2020, for all 14 programmes within
the scope of this initiative. These documents served as the primary source of evidence for the analysis.
For a comprehensive list of sources used for the proposes of this IA, please see the table below.
Finally, a series of relevant policy and scientific reports and papers have been consulted and cited
throughout the analysis.
The desk review was further completed by economic modelling carried out by Joint Research
Centre (JRC) for quantifying selected impacts (for additional details and the methodology, see Annex
5).
Programme Main sources of evidence used
InvestEU • Impact assessment of InvestEU Programme 2021-2027 (2018)
• EFSI 2.0 ex-post evaluation (2022)
• Interim evaluation of the InvestEU Programme 2021-2027 (2024)
• Evaluation of the ELENA facility (EIB, 2019)
Horizon Europe • Ex post evaluation of Horizon 2020 (2024)
• Impact assessment of Horizon Europe 2021-2027 (2018)
• Evidence of the interim evaluation of Horizon Europe (2021-2027) –
forthcoming 2025; shared by DG RTD on 1/4/2025
• Align, Act, Accelerate Research, technology and innovation to boost
European Competitiveness (Heitor, M., 2024)
53
Programme Main sources of evidence used
• Evidence Framework on monitoring and evaluation of Horizon
Europe (2023)
• Study to support the monitoring and evaluation of the Framework
Programme for research and innovation along Key Impact Pathways
- Baseline and Benchmark Report (2022)
• Country Participation in the EU R&I Framework Programmes - A
retrospective on the first three years of Horizon Europe (2021-2023)
(2024)
• Keeping our eyes on the Horizon – Monitoring flash series (2020)
• Opportunities and Challenges in Targeted Funding of Research and
Innovation: Lessons learnt from the Horizon 2020 Focus Areas and
implications for Horizon Europe Missions (2021)
• Monitoring the open access policy of Horizon 2020 (2021)
• Study on the proposal evaluation system for the EU R&I framework
programme (2021)
• Evaluation study on the European Innovation Council (EIC) pilot
(2022)
• Evaluation study on the external coherence and synergies of Horizon
2020 within the European research and innovation support system
(2022)
• Evaluation study on the relevance and internal coherence of Horizon
2020 and its policy mix – Final Report (2023)
• Evaluation study on the implementation of cross-cutting issues in
Horizon 2020 (2022)
• Evaluation study of the European Framework Programmes for
Research and Innovation for a Resilient Europe (2023)
• Evaluation study on the European Framework Programmes for
Research and Innovation for addressing Global Challenges and
Industrial Competitiveness – Focus on activities related to the Green
Transition – Final Report Phase 1 (2023)
• Evaluation Study on the European Framework Programmes for
Research and Innovation for Addressing Global Challenges and
Industrial Competitiveness – Focus on Activities for the Digital and
Industrial Transition – Phase 1 Final report – Horizon 2020 (2023)
• Evaluation study on Excellent Science in the European Framework
Programmes for Research and Innovation – Horizon 2020 - Phase 1
Final Study report (2023)
• Evaluation study of the European Framework Programmes for
Research and Innovation for an Innovative Europe – Final Report:
Phase 1 (2023)
54
Programme Main sources of evidence used
• Evaluation study of the European framework programmes for
research and innovation for excellent science (2023)
• Evaluation study of the Eurostars-2 programme (2023)
• Contribution of the framework programmes to IPCC (2023)
Digital Europe • Impact assessment of the Digital Europe programme for the period
2021-2027 (2018)
• 2030 Digital Compass: the European way for the Digital Decade
(2021)
Innovation Fund • NER 300 lessons learnt (ICF, 2018)
• Impact assessment of the Innovation Fund 2021-2027 (2019)
• Annual knowledge sharing report of the Innovation Fund (2024)
• on the implementation of the Innovation Fund in 2022 (2023)
• on the implementation of the Innovation Fund in 2023 (2024)
• Innovation Fund Progress Report (2022, 2023)
LIFE • Impact assessment of the Programme for the Environment and
Climate Action (LIFE) 2021-2027 (2018)
• Ex-post evaluation of the Programme for the Environment and
Climate Action (LIFE) 2014-2020 (2022)
• Contribution of LIFE to environmental improvement Support to the
ex-post evaluation of LIFE 2014-2020 (2024)
• LIFE 2014-2020 contribution to resource efficiency, climate change
adaptation & mitigation (2024)
• Contribution of LIFE 2014-2020 to the enforcement of EU
environmental legislation (2024)
• Contribution of LIFE 2014-2020 in supporting dissemination of
information and governance of environmental and climate aspects
(2024)
• LIFE 2014-2020 contribution on the implementation and
management of the Natura 2000 network (2024)
• Contribution of LIFE 2014-2020 on triggering replication or transfer
and interventions achieving synergies with or mainstreamed into
other Union funding programmes (2024)
Connecting Europe
Facility
• Impact assessment of the Connecting Europe Facility 2021-2027
(2018)
• Mid-term evaluation of the Connecting Europe Facility (CEF) 2014-
2020 (2018)
• CEF Energy 2023 - Latest achievements and way forward (2023)
55
Programme Main sources of evidence used
• CEF Energy 2022 - Spotlight on supported actions (2022)
• Transport investment under the Connecting Europe Facility (CEF)
(2022)
• Scope of the CBA in the framework of the CEF-transport (2022)
European Defence Fund • Impact assessment of the European Defence Fund 2021-2027 (2018)
• Indicative multiannual perspective 2024-2027 (2024)
European Defence Industry
Reinforcement Through
Common Procurement Act
(EDIRPA)
• Commission implementing decision on the financing of the
instrument for the reinforcement of the European defence industry
through common procurement (EDIRPA) established by Regulation
(EU) 2023/2418 of the European Parliament and of the Council and
the adoption of the work programme for 2024-2025 (2024)
• Proposal for a regulation of the European Parliament and of the
Council establishing the European Defence Industry Programme and
a framework of measures to ensure the timely availability and supply
of defence products (EDIP) (2024)
• EU boosts defence readiness with first ever financial support for
common defence procurement (Press Release, 2024)
Act in support of
Ammunition programme
(ASAP)
• Report from the Commission to the European Parliament and the
Council on the implementation of Regulation (EU) 2023/1525 of the
European Parliament and of the Council of 20 July 2023 on
supporting ammunition production (ASAP) (2024)
• Proposal for a regulation of the European Parliament and of the
Council establishing the European Defence Industry Programme and
a framework of measures to ensure the timely availability and supply
of defence products (EDIP) (2024)
IRIS² • Impact assessment of Union Secure Connectivity Programme for the
period 2022-2027 (2022)
• Regulation (EU) 2023/588 of the European Parliament and of the
Council of 15 March 2023 establishing the Union Secure
Connectivity Programme for the period 2023-2027 (2023)
• The Upcoming of IRIS2: Bridging the Digital Divide and
Strengthening the Role of the EU in International Space Law (Tricco,
G., 2023)
European Space
Programme
• Impact assessment of the space programme of the Union and the
European Union Agency for the Space Programme 2021-2027
(2018)
• Interim evaluation of the EU Space Programme and on the
performance of the European Union Agency for the Space
Programme 2021-2027 (2024)
56
Programme Main sources of evidence used
• EUSPA Annual Activity Report 2023 (2023)
EU4Health • Impact assessment of the European Globalisation Adjustment Fund
(EGF) – Annex 5: Programme specific annex on the Health
Programme (2018)
• Final evaluation of the third Health Programme 2014-2020 (2023)
• 2024 EU4Health Work Programme (2024)
• 2024 EU4Health Stakeholders' Consultation (2024)
• Performance Monitoring and Evaluation Framework (2024)
SME pillar of the Single
Market Programme
• Impact assessment of the Programme for single market,
competitiveness of enterprises, including small and medium-sized
enterprises, and European statistics and repealing Regulations (EU)
No 99/2013, (EU) No 1287/2013, (EU) No 254/2014, (EU) No
258/2014, (EU) No 652/2014 and (EU) No 2017/826 (2018)
• Final evaluation of the programme for the competitiveness of
enterprises and small and medium-sized enterprises (COSME) 2014-
2020 (2024)
• Mid-term evaluation of the Single Market Programme – forthcoming
2025.
Strategic Technologies for
Europe Platform (STEP)
• Interim evaluation of STEP – forthcoming 2025
Annex 2: Stakeholder consultation (Synopsis report)
1. Introduction
In the framework of preparing for the next Multiannual Financial Framework (MFF) starting in 2028,
the European Commission conducted a public consultation to gather views on EU funding for
competitiveness. The consultation targeted a wide range of stakeholders, including citizens,
businesses, SMEs, public authorities, recipients of EU funding, civil society organisations, academia,
and international stakeholders.
This synopsis report summarises the results of the consultation and informed the impact assessment
process for a potential competitiveness fund under the next MFF.
The public consultation was conducted over a 12-week period, from 12 February 2025 to 7 May
2025. It included an online questionnaire and the option to submit position papers. The questionnaire
covered both general aspects of EU competitiveness funding and more technical issues related to
specific challenges and measures. It consisted mainly of closed-ended questions, with several open-
ended questions allowing respondents to elaborate on their views. In total, 2 034 survey responses
and 462 position papers were received.
Contributions received in the context of the public consultation published on the ‘Have Your Say’
portal do not represent the official position of the Commission or its services and thus do not bind
the Commission, nor do they constitute a representative sample of the EU population.
2. Methodology
This section outlines the approach used to analyse the public consultation responses and position
papers received. It also provides an overview of identified campaign submissions.
Quantitative analysis of closed questions
The statistical analysis of closed consultation questions combined high-level aggregation with
disaggregated insights by stakeholder group. Cross-tabulations were used to explore variations in
responses by stakeholder type. This enabled the identification of emerging trends within particular
groups and helped contextualise broader patterns across responses. While all stakeholder group
breakdowns have been systematically reviewed and collected in an Excel file, this report focuses on
the most relevant divergences and trends to ensure a focused and concise presentation of findings
within the available space.
Qualitative analysis of open-ended responses and position papers
The analysis of open-ended responses and position papers has followed a hybrid approach,
combining Large Language Model (LLM)-driven topic modelling with expert human
validation. This ensured a structured, consistent, and robust synthesis of stakeholder input. To
support multilingual responses, the Commission’s eTranslation tool was used to process non-English
contributions.
Responses were mapped according to a set of key issue areas defined in the analytical framework
developed during the inception phase. These categories were initially based on inputs from the
Commission and refined through desk research. The framework was operationalised, tested on a
sample of responses, and iteratively adjusted to ensure accuracy and consistency.
To enhance the reliability and nuance of the analysis, the study applied a layered validation process.
Contributions were first mapped to issue areas using LLM-driven topic modelling. The initial
classifications were tested against a human-coded sample, which showed a high level of alignment.
A second model was then used to cross-check the outputs, with any discrepancies manually reviewed.
58
Following categorisation, the study analysed responses to identify stakeholder perspectives,
particularly regarding the challenges to EU competitiveness, their underlying causes, and proposed
measures. The choice of methodology and approach was discussed and validated with the European
Commission’s Joint Research Centre, which supported the robustness and credibility of the analysis.
As the consultation relied on self-selected respondents who were not required to comment on every
issue area, the qualitative analysis is not statistically representative. Instead, it complements the
quantitative results by illustrating stakeholder perspectives through specific examples and identifying
recurring themes across position papers and open-text responses.
Information on identified campaigns
Submissions have been reviewed to identify organised campaigns among position papers and open-
ended responses. In total, 12 campaigns with at least five contributions were identified. These account
for 130 responses overall, representing approximately 6% of all submissions. The table below
provides an overview of the number of responses per campaign, the stakeholder groups involved,
their positions and their countries of origin.
Table 1. Preliminary overview of identified campaigns
Campaign
number
Number
of
responses
Stakeholder
type
Countries of
origin
Positions
#1 27
Local and
regional public
authorities
Belgium,
Finland, France,
Germany,
Netherlands
Importance of local and regional
authorities in EU
competitiveness funding
#2 23
Businesses,
public
authorities
(transport
sector)
Austria,
Belgium, France,
Germany, Italy,
Spain
Transport as a strategic priority
requiring strong and coordinated
funding
#3 14
Academic/Res
earch
Institutions
Belgium,
Germany,
Netherlands
Importance of a dynamic
knowledge cycle and the role of
universities
#4 13
Academic/Res
earch
Institutions
Denmark,
France,
Germany,
Netherlands,
Spain
Critical role of national research
infrastructures and need for
dedicated funding
#5 13
Non-
governmental
organisations
Germany
Simplification and accessibility
of EU funding for civil society
and non-profits
#6 8
Academic/Res
earch
Institutions
Germany
Increased funding for
fundamental science
#7 7
Academic/Res
earch
Institution
(aviation)
Belgium, France,
Germany,
Netherlands,
Romania
Strategic importance of aviation
for European leadership and
comprehensive support
59
Campaign
number
Number
of
responses
Stakeholder
type
Countries of
origin
Positions
#8 5
Academic/Res
earch
Institution
Ireland
Enhanced investments in
research and technology
infrastructures
#9 5
Non-EU
Citizens
Norway Independence of Erasmus+
#10 5
Local public
authorities
Germany
Simplification of state aid rules
and digital transformation of
grant processes
#11 5
Regional
public
authorities
Netherlands
Flexible funding and balanced
performance criteria for regional
innovation
#12 5
Businesses
(aviation)
Belgium,
Germany, Italy
Strategic importance of airports
for economic growth and climate
goals
3. Analysis of public consultation results
The following sections present the analysis of key findings from the public consultation. The analysis
combines both quantitative and qualitative findings, covering responses to closed and open-ended
questions as well as submitted position papers. It highlights key trends, patterns, and divergences
across stakeholder groups, providing an overview of stakeholder views most relevant to the impact
assessment.
3.1. Background of respondents
The public consultation was answered predominantly by EU citizens (26%, 520 out of 2 034) and
academic/research institutions (22%, 450) (see figure below). Public authorities represented 13%
(259) of the total responses. Companies and businesses contributed 11% (218), of which 105 were
from SMEs. Non-governmental organisations accounted for 10% (204) of the total respondents.
’Other’ stakeholder types (7%, 146) primarily encompassed research and academic networks,
industry and professional platforms, governmental and public sector alliances and other specialised
groups.
60
Figure 1. Stakeholder types
The public consultation gathered responses predominantly from European countries (95%, 1 932),
with Germany leading with the highest number of respondents (354). Belgium followed with 277
respondents, and Italy with 181. Participation from non-EU countries was limited, with a total of
102 responses – led by the Norway (21), followed by the United Kingdom (20) and Moldova (11).
3.2.Respondents’ experience with EU funding
The preliminary results of the public consultation indicate that the majority of respondents are
programme beneficiaries, comprising 56% (1 149) of the total (see figure below). Non-applicants
account for 32% (647) of the respondents. A smaller group, 6% (114) of the respondents are
unsuccessful applicants.
Figure 2. Respondents’ funding status
Note: Respondents’ funding status is based on their answers to questions 2 (whether they applied for EU funding) and question 4 (whether their
application was successful).
When asked which programmes they had applied to since 2021, respondents most frequently reported
Horizon Europe, with 79% (999 out of 1 270) indicating they had submitted an application, while
29% (374) of respondents had applied to the LIFE programme (see figure below). Digital Europe
was the third most commonly selected, with 19% (246) having applied, followed by Connecting
Europe Facility at 12% (149).
520
450
259
218 204
178
146
23 18 16 2
0
100
200
300
400
500
600
N=2 034 EU Citizen
Academic/Research Institution
Public authority
Company/business
NGO (Non-governmental
organisation)
Business Association
Other
Non-EU Citizen
Environmental Organisation
Trade Union
56%
32%
6% 4% 2%
0%
20%
40%
60%
Beneficiary Non-applicant Unsuccessful
applicant
Unknown Applicant (outcome
unknown)
N=2 034
61
Figure 3. Types of EU funds respondents applied to
Overall, respondents reported a positive experience across most stages of the funding process. The
stage of identifying the funding opportunity (N=1 232) received the highest ratings: 88% (1 083)
of respondents rated it (very) positively, while only 7% (93) gave it a (very) negative rating (see
figure below). This stage was followed by the relevance and clarity of the calls (82%, 1 001 out of
1 227), the implementation phase (81%, 999 out of 1 220) and the disbursement of funding (77%,
929 out of 1 208).
The perception of the application procedure (N=1 222) was more mixed – while 66% (806) gave a
(very) positive assessment, more than a quarter (29%, 349) rated it (very) negatively. The timeline
of the process (N=1 227) was somewhat less well-received compared to other aspects: 60% (292) of
respondents reported a (very) positive experience, while 35% (430) viewed it (very) negatively.
These views reflect the complexity involved in accessing, mobilising, and implementing EU
funding for beneficiaries, particularly due to fragmented programme structures, varying criteria and
requirements, and administrative burdens (see also the detailed analysis on this aspect in section Fejl!
Henvisningskilde ikke fundet.). In open-text responses on challenges in the funding process,
respondents frequently noted that lengthy evaluation timelines, unclear call descriptions, and a lack
of transparency create inefficiencies and discourage participation – particularly for SMEs (who were,
on average, least satisfied with the funding process) and newcomers. These difficulties are most
evident in respondents’ lower ratings for the application stage and duration of the procedure and
suggest that simplification efforts – particularly those aimed at greater procedural clarity,
harmonised requirements, and coherence across funding programmes – could improve the overall
user experience and encourage broader participation.
1%
1%
2%
4%
4%
6%
9%
10%
12%
19%
29%
79%
0% 20% 40% 60% 80% 100%
ITER
IRIS
InvestEU
European Space Programme (incl. Cassini Initiative)
Euratom Research and Training Programme
Innovation Fund
European Defence Fund
EU4Health
Connecting Europe Facility
Digital Europe
LIFE
Horizon Europe
Which funds have you applied for? (N=1 270)
62
Figure 4. Respondents’ perception of the funding process
While respondents overall provided positive ratings across most stages of the funding process, some
differences can be observed across stakeholder groups:
• Identifying the funding opportunity received high satisfaction (82-91%) across groups,
with EU citizens (91%, 189 out of 209), member state authorities (91%, 137 out of 150) and
beneficiaries (89%, 975 out of 1 102) most positive. The relevance and clarity of calls, and
the disbursement and implementation phases followed a similar trend.
• The application procedure and duration of the process received more mixed feedback.
Satisfaction with the application stage was lowest among unsuccessful applicants (62%, 69
out of 111) and business stakeholders (63%, 144 out of 229), while academics (69%, 250 out
of 365) and citizens (75%, 154 out of 206) were more positive. A similar pattern was observed
for the duration of the procedure.
• Perceptions of the proposal evaluation phase were highly outcome-dependent, with
beneficiaries (81%, 883 out of 1 089) reporting high satisfaction, while unsuccessful
applicants were comparatively less satisfied (43%, 48 out of 112).
Among beneficiaries, satisfaction levels were similarly high across programmes for identifying
opportunities, relevance and clarity of calls, disbursement, and implementation. The application
procedure (63-73%) and the duration of the process (44-71%) showed more variation, with LIFE
beneficiaries (N=279) overall reporting higher satisfaction compared to those from Horizon Europe
(N=767), EU4Health (N=97), and Digital Europe (N=183).
3.3.EU funding on competitiveness
Challenges and measures to support competitiveness
The following sections combine findings from closed questions, open-ended responses, and position
papers to present key trends across the key issue areas identified in relation to EU funding for
competitiveness. For each area, the analysis explores stakeholder perspectives, underlying causes,
and proposed measures.
As shown in the figure below, underinvestment in research and innovation (91%, 1 795 out of 1
974) and the EU’s innovation and technological gap with global competitors (81%, 1 614 out of
1 973) emerged as the most widely recognised challenges to competitiveness among public
consultation respondents. By contrast, respondents placed the least emphasis on issues related to the
protection of EU funds against illegal activities (45%, 872 out of 1 940) and the fertilisation between
civil and military research (29%, 561 out of 1 943).
11%
11%
20%
14%
20%
17%
24%
49%
55%
57%
63%
61%
65%
64%
30%
25%
6%
13%
5%
14%
7%
5%
4%
5%
5%
16%
8%
14%
4%
5%
0% 20% 40% 60% 80% 100%
The duration of the procedure (N=1 227)
The application procedure (N=1 222)
The disbursement of the funding (N=1 208)
The evaluation of your proposal (N=1 218)
The implementation of the project (N=1 220)
The relevance and clarity of the calls (N=1 227)
Identifying the funding opportunity (N=1 232)
Q6. How would you describe your experience?
Very positive Positive Negative Very negative No opinion
63
Figure 5. Importance of identified challenges
Note: The figure shows the combined share of respondents who selected ‘Important’ or ‘Very important’.
Respondents’ concerns regarding challenges to competitiveness were closely reflected in their views
on potential policy responses (see figure below). The highest levels of support – based on the
combined share of respondents answering to a large extent or somewhat – were expressed for
increasing the focus of funding on key current and future strategic priorities (87%, 1 689 out of
1 951), ensuring continuity of EU funding along the investment journey from research to
manufacturing (83%, 1 618 out of 1 939), and limiting EU dependencies in strategic sectors (82%,
1 583 out of 1 942).
29%
45%
58%
62%
62%
65%
65%
66%
70%
71%
72%
72%
76%
77%
81%
91%
0% 20% 40% 60% 80% 100%
Lack of fertilisation between civil and military research
and development (N=1 943)
Challenges related to the effective protection of EU
funds against illegal activities (N=1 940)
Disparities in innovation and industrial capacity across
Member States (N=1 954)
Insufficient private investment, including by
institutional investors (N=1 951)
Mismatch between skills and labour market demands
(N=1 954)
Access to finance for small businesses and for scale-up
companies (N=1 962)
Attracting world class researchers, skilled workers and
entrepreneurs from abroad (N=1 957)
Insufficient focus of EU funding on EU strategic
priorities (N=1 961)
Insufficient innovation and manufacturing capacity for
strategic technologies (N=1 956)
Lack of coherence between EU, national and regional
policies for competitiveness (N=1 964)
Digitalisation and diffusion of advanced technologies
in key sectors (N=1 946)
Incapacity to translate innovation into marketable
technologies (N=1 963)
Excessive dependence of the EU on non-EU countries
(N=1 957)
Climate resilience and costs associated with
decarbonisation (N=1 971)
The innovation and technological gap for the EU in
strategic technologies (N=1 973)
Underinvestment in research and innovation (N=1
974)
Q10. The Commission has preliminarily identified the following challenges
linked to competitiveness. How important are these challenges in your
view?
64
Figure 6. Impact of possible measures
The following sections provide a detailed analysis of each key issue area, examining stakeholder
perspectives, variations between groups, and proposed measures in response to the identified
challenges.
Fragmented support through the investment journey
Respondents recognised fragmentation in support across the investment journey as a barrier to
competitiveness, particularly in relation to underinvestment in research and innovation. This
emerged as a top challenge across all respondent groups, with 91% (1 795 out of 1 974) of
respondents rating it as (very) important. This issue also closely relates to other challenges, including
scale-up financing gaps, capacity shortages, and fragmented investment in strategic sectors (see
sections below). While somewhat less prominent, a lack of coherence between EU, national and
regional policies for competitiveness was also seen as a relevant concern (71%, 1 391 out of 1 964),
as it can undermine coordinated investment pathways.
To address fragmentation in support, continuity in EU funding from research through to
manufacturing received strong backing as a potential measure. It was the second most consistently
supported option across stakeholder groups, with 83% (1 618 out of 1 939) of respondents overall
indicating that it could have a positive impact to a large extent or somewhat. Aligning industrial
and research policies at EU and national levels received more moderate support, with 77% (1 514
out of 1 948) of respondents overall viewing it as at least somewhat impactful.
15%
24%
23%
33%
43%
43%
40%
35%
45%
40%
50%
52%
50%
28%
33%
37%
32%
33%
34%
38%
44%
34%
40%
32%
31%
37%
23%
23%
23%
19%
11%
9%
13%
11%
12%
12%
8%
6%
7%
26%
5%
6%
9%
7%
5%
8%
15%
11%
7%
6%
12%
7%
7%
4%
5%
9%
9%
0% 20% 40% 60% 80% 100%
Reducing the number of EU funding programmes
(N=1 952)
Preventing and combat fraud and corruption better
(N=1 912)
Strengthen business advisory support services for
successful applicants (N=1 931)
Place greater focus on achieving results, incl. via
performance-based funding (N=1 927)
Applying common rules, timelines and eligibility
criteria to all relevant EU funds (N=1 958)
Aligning industrial and research policies and
investment at EU and national levels (N=1 948)
Better feedback to applicants (N=1 932)
Increase international collaboration with like-
minded non-EU partners (N=1 950)
More flexibility in resource allocation to react to
crises and emerging needs (N=1 932)
User-friendly IT tools (N=1 942)
Targeted tools and measures to limit EU
dependencies in strategic sectors (N=1 938)
Continuity in EU funding from research to
manufacturing (N=1 939)
Increased focus of funding on key current and
future strategic priorities (N=1 951)
Q13. The Commission has identified a number of possible measures for EU
funding to better support EU competitiveness. To what extent do you think
such measures could have a positive impact?
To a large extent Somewhat Very little Not at all Don’t know/ not applicable
65
Open-text responses and position papers linked to this issue area frequently emphasised the
importance of coordinated, continuous, and predictable funding across the entire investment
journey. Respondents frequently noted that gaps in EU budget support, particularly at critical stages
like scale-up and market application, can hinder the translation of research into commercial solutions.
Businesses, in particular, highlighted the need to address funding gaps between early-stage
feasibility and later-stage scale-up, and suggested increasing the use of streamlined funding
instruments, such as cascade funding, and stronger public-private partnerships.
Academic and research institutions, businesses, and public authorities also frequently stressed the
need for closer alignment between EU and national funding frameworks to prevent breaks in the
innovation pipeline. Additionally, some respondents called for more systematic integration of
research, development and innovation components within EU funding programmes to reduce
fragmentation across funding instruments and improve coordination.
Low and fragmented investment in strategic sectors
Low and fragmented investment in key sectors emerged as a key issue area among respondents. The
EU’s innovation and technological gap with global competitors was rated as (very) important by
81% (1 614 out of 1 973) of respondents, making it one of the most frequently cited challenges. This
view was especially strong among businesses (88%, 332 out of 374) and academic or research
institutions (88%, 389 out of 440). The EU’s dependence on non-EU countries for critical inputs
and technologies was also widely recognised (76%, 1 490 out of 1 957), with EU citizens expressing
higher levels of importance (83%, 428 out of 515) compared to other stakeholders. Other related
issues included climate resilience and decarbonisation (77%, 1 514 out of 1 971) and the digitalisation
of key sectors (72%, 1 394 out of 1 946).
Reflecting these concerns, stakeholders showed strong support for targeted measures to limit EU
dependencies in strategic sectors, which was one of the most widely supported measures overall,
with 82% (1 583 out of 1 938) of respondents viewing it at least somewhat impactful. Support was
especially high among member state authorities (88%, 204 out of 231) and EU citizens (87%, 447
out of 511). There was also broad support for increasing the focus of EU funding on key current
and future strategic priorities (87%, 1 689 out of 1 951), with support particularly high among
businesses (93%, 341 out of 370) and member state authorities (92%, 214 out of 231).
In open-text responses and position papers, strategic priorities were among the most frequently
discussed areas. Respondents across stakeholder groups highlighted the need for more coordinated
and sustained investment in areas they considered essential to long-term competitiveness, such as
digital technologies, AI, biotech, clean tech, and critical infrastructure. Contributions frequently
noted that EU and member state investments in these sectors remained fragmented and often lacked
the scale needed to address the capital needs of high-impact sectors.
Business stakeholders frequently emphasised the importance of greater investments in specific
sectors to support long-term research and development, infrastructure modernisation, and
decarbonisation. Similarly, academic and research institutions called for expanded investments in
research and technology infrastructures, noting that advanced facilities and equipment are
essential for scaling innovations and maintaining global competitiveness (see also section below on
capacity gaps). Additionally, respondents from various stakeholder groups frequently highlighted the
importance of increasing investment levels to better support broader sustainability objectives,
including climate resilience, biodiversity, and circular economy goals, in order to enable key
transitions and strengthen Europe’s strategic autonomy.
66
Financing gap at scale-up level and insufficient leverage of private investment
Access to finance for small businesses and scale-up companies was seen as a (very) important
challenge by 65% (1 273 out of 1 962) of respondents, with businesses (73%, 271 out of 373) – in
particular SMEs (84%, 87 out of 103) – and member state authorities (76%, 175 out of 231)
expressing the highest importance. Insufficient private investment was also noted by 62% (1 218
out of 1 951) overall, though this view was more strongly held by member state authorities (75%,
171 out of 230).
In the open responses and position papers, respondents who addressed this aspect frequently
highlighted persistent challenges associated with securing adequate financing at the scale-up
and deployment stages. Respondents frequently pointed to gaps in access to venture capital,
particularly for high-risk, deep-tech sectors. Some contributions also noted that fragmented capital
markets and high levels of investor risk aversion in the EU overall limit the availability of private
capital, which can make it more difficult for innovative firms to reach commercial scale.
In this context, contributions from businesses frequently emphasised the need for more effective de-
risking mechanisms, such as blended finance models or matched equity instruments, particularly to
support start-ups and SMEs. They also highlighted the potential role of strategic public-private
partnerships in attracting private capital by reducing perceived investment risks. This view is also
shared by EU financing institutions that contributed to the consultation, which emphasised the need
to leverage public resources through risk-sharing schemes and blended instruments to increase impact
and crowd in private capital. In relation to a possible competitiveness fund, they advocate for a
structure that combines EU budgetary guarantees with grant funding to maximise the impact and
leverage of public spending. They also emphasised the importance of ensuring access to finance for
SMEs and support the ‘open architecture’ approach for national promotional banks and institutions
and international financial institutions. Some of the respondents, including public authorities and
businesses, also suggested strengthening EU-level structures to mobilise private capital and
creating clearer and more accessible pathways to investment tools.
Capacity gaps (labour and skills shortage, infrastructure, R&I divide)
Capacity-related challenges were generally viewed as moderately important by respondents, though
member state authorities in particular expressed stronger concern than other groups. Insufficient
innovation and manufacturing capacity for strategic technologies was the most commonly cited
issue in this area, rated as (very) important by 70% (1 367 out of 1 956) of respondents, with fairly
consistent views across stakeholder groups. The mismatch between skills and labour market
demands was seen as (very) important by 62% (1 208 out of 1 954) overall but rose to 77% (175)
among member state authorities (N=230). Similarly, attracting world-class researchers, skilled
workers and entrepreneurs received 65% (1 268 out of 1 957) support overall, with higher concern
from academic/research institutions (76%, 336 out of 441) and member state authorities (73%, 169
out of 232) compared to businesses (55%, 201 out of 369). Disparities in innovation and industrial
capacity across member states were considered (very) important by 58% (1 133 out of 1 954)
overall, with fairly consistent views across stakeholder types.
In open responses and position papers, respondents frequently highlighted perceived gaps in the
EU’s capacity to sustain a competitive research and innovation base. These included skills
shortages, infrastructure deficits, and uneven research and innovation capacity across member states.
Contributions frequently emphasised the need for sustained investments in both physical and digital
infrastructure to support the scaling and commercialisation of new technologies in key sectors such
as energy, transport, and digital technologies. A recurring theme among academic and research
stakeholders was the need for long-term investments in research infrastructures, perceived as
important to safeguard Europe’s technological edge and innovation potential. In parallel, public
67
authorities more frequently pointed to regional disparities in research and innovation capacity,
emphasising the need to invest in local and regional ecosystems through EU funding instruments.
In addition to infrastructure, contributions also frequently highlighted the role of skills and talent in
sustaining Europe’s long-term competitiveness. This includes calls for improved training, skills
development, and early-stage education to support a highly skilled workforce, particularly in the
context of the EU’s green and digital transitions.
Weak translation of research results into marketable outputs
While the broader issue of translating research into marketable outcomes was broadly recognised by
stakeholders, specific aspects such as coordination between civil and military research were
perceived as less pressing. The inability to bring innovation to market and integrate it into the
EU’s industrial base was considered (very) important by 72% (1 419 out of 1 963) of respondents,
with concern especially high among businesses (83%, 309 out of 375) – including SMEs (81%, 83
out of 103) – and member state authorities (80%, 185 out of 231). In contrast, limited interaction
between civil and military research was rated as the least important challenge across all respondent
groups (29%, 561 out of 1 943).
Although translating research into marketable outcomes was rated as important in the survey, it
received relatively limited attention in open-text responses compared to other issue areas, suggesting
broad recognition but fewer concrete proposals. Among those who did comment, contributions
frequently emphasised the need for stronger support mechanisms to bridge the gap between
research and commercial applications. Respondents noted that while the EU has a strong foundation
in research, converting scientific advancements into commercially viable innovations remains a
challenge. This issue, as emphasised by respondents, is compounded by fragmented support
structures, insufficient collaboration between research institutions and businesses, and a lack of
integrated innovation pipelines.
In this context, respondents from academic institutions frequently called for stronger links between
research and market application, highlighting the importance of applied research actors in this
process. Similarly, respondents frequently suggested that existing funding instruments could be
better structured to support the uptake and commercialisation of research results. Respondents
frequently called for clearer pathways and incentives to bring innovations to market, suggesting
dedicated measures for applied research and technology transfer. Others emphasised the importance
of tailored support for sectors with high capital requirements, such as healthcare, clean tech, and
digital technologies.
Complexity to access, mobilise and implement EU funding for beneficiaries
Stakeholder responses pointed to a perceived need for greater simplification and coherence across
funding programmes. In open-text responses and position papers, respondents frequently cited
varying eligibility criteria, templates and documentation requirements, across different funds as key
sources of complexity and inefficiency. Aligning rules and procedures across different funds was
among the most commonly cited measures that could help reduce administrative burden for
stakeholders.
High administrative workload during application and reporting stages was also frequently
mentioned as a challenge in open-text responses. This was seen as particularly challenging for smaller
organisations, civil society groups, and new entrants, making it more difficult for them to access the
EU funding ecosystem. Commonly noted proposals included simplifying application processes,
including the use of two-stage submissions to reduce time spent on unsuccessful proposals. There
were also frequent calls for clearer co-financing conditions, simplified budgeting procedures, and
68
greater flexibility in eligibility and project design to support broader participation, while maintaining
consistency across different funds.
Addressing fragmentation through more integrated rules and governance structures could play a
central role in simplifying access and reducing the overall complexities and administrative
inefficiencies. Greater coherence across programmes is seen to have the potential to improve both
the user experience and the overall effectiveness of funding delivery. In particular, applying
common rules, timelines and eligibility criteria to all relevant EU funds was seen as an impactful
possible measure for EU funding to better support EU competitiveness with consistent results across
stakeholder groups (76%, 1 502 out of 1 958). This view is also shared by EU financing institutions
that contributed to the consultation, which emphasised the need to simplify and harmonise rules,
streamline reporting and eligibility criteria, and reduce administrative burdens, particularly for SMEs
and smaller actors. They also stressed the importance of avoiding duplication across programmes and
creating a unified, more accessible funding framework.
While applying common rules across programmes received strong overall support, a smaller group
of 43% (855 out of 1 952) of stakeholders considered that reducing the number of EU funding
programmes would have a positive effect. Among beneficiaries of the Horizon Europe programme,
47% (370 out of 791) believed that reducing the number of EU funding programmes would positively
impact EU competitiveness. However, views varied across other programmes, with support for
decreasing the number of programmes rising to 58% (109 out of 189) among beneficiaries of the
Digital Europe programme.
In open-text responses and position papers, Horizon Europe beneficiaries frequently expressed
concern that merging FP10 into a consolidated competitiveness fund could risk the reallocation of
research funding to other policy areas. This reflects the broader uncertainty expressed in some
responses, where beneficiaries frequently emphasised the importance of ensuring dedicated
support for scientific excellence and innovation in order to maintain the EU’s global leadership in
research and technology. On the other hand, respondents in favour of a consolidated fund emphasised
the importance of reducing fragmentation and simplifying access by merging multiple funding
streams into a single, more coherent structure. They suggest that this approach could reduce
administrative burdens, enhance financial flexibility, and improve coherence across funding streams
to better support strategic EU goals, while also enabling faster responses to emerging challenges.
Governance, structure and coordination mechanisms of EU funding instruments and their
implementation
Stakeholders overall agreed on the need to better align EU funding programmes with clear
strategic priorities, in order to avoid funds becoming too widely dispersed and losing focus. This
concern was considered (very) important by 66% (1 283 out of 1 961) of respondents, with relatively
consistent agreement across stakeholder groups. Similarly, an increased focus of funding on key
current and future strategic priorities was widely seen as a positive possible measure, with 87%
(1 689 out of 1 951) of respondents believing it would have a positive impact to a large extent or
somewhat. At the same time, some open-text responses expressed caution about introducing overly
complex targets in the process of aligning funding with strategic priorities, warning that this could
potentially increase administrative burden.
Introducing more flexibility into resource allocation to react to crises and emerging needs was
considered impactful by 79% (1 528 out of 1 932) of respondents, with most stakeholder groups
showing consistent support. In open-text responses and position papers, respondents broadly agreed
on the need for greater flexibility in EU funding instruments to address emerging needs and
crises, while ensuring the stability required for long-term strategic priorities. Contributions
frequently highlighted the importance of funding mechanisms that can quickly respond to crises and
69
changing needs and priorities, supporting the idea of more adaptable funding instruments. At the
same time, respondents emphasised the importance of predictable funding frameworks to support
long-term planning, particularly in areas like research and infrastructure where continuity is
important.
The lack of coherence between EU, national, and regional policies for competitiveness was
assessed as a moderately important challenge by all stakeholder groups. Overall, 71% (1 391 out of
1 964) of respondents considered it (very) important, with fairly consistent views across stakeholder
groups. Although relatively few open-text responses and position papers discussed this aspect in
detail, some contributions pointed to the relevance of ensuring an appropriate balance between EU-
level centralised management and member state involvement, particularly in relation to projects with
substantial infrastructure or economic development implications.
Role of the EU budget in addressing challenges
The results suggest varied perceptions of the EU budget’s contribution across different policy
areas, with stronger recognition in more established domains of EU action and less in areas involving
cross-sector collaboration or private investment. The strongest areas of contribution are seen in
facilitating collaboration between research and industry, decarbonisation and sustainability of
strategic sectors, and the digitalisation and diffusion of advanced technologies (see figure below).
The lowest perceived contributions relate to fertilisation between civil and military research and
development. In general, perceptions of the EU budget’s contribution are broadly aligned across
stakeholder groups. Open-text responses on other relevant areas most frequently emphasised that the
EU budget also plays an important role in promoting democratic market regulation, strengthening
regional innovation ecosystems, and enhancing technological sovereignty through investment in
research.
70
Figure 7. Role of the EU budget
Research support
The survey results show that applied research is perceived as the most important stage for support
under the next Multiannual Financial Framework, with 72% (1 411 out of 1 954) of respondents
indicating it should be supported to a large extent (see figure below). This was followed by early-
stage development of technologies (56%, 1 095 out of 1 946) and fundamental research (54%, 1
049 out of 1 936). Open-text responses frequently emphasised the need for EU support across the
entire investment journey – from fundamental research to industrial deployment – with particular
focus on early-stage development, proof of concept, and scaling up.
7%
12%
11%
12%
14%
15%
14%
16%
15%
24%
29%
24%
33%
33%
37%
41%
49%
47%
50%
56%
55%
59%
54%
51%
58%
55%
45%
45%
41%
33%
34%
30%
26%
26%
23%
18%
17%
15%
11%
15%
6%
7%
6%
5%
5%
4%
3%
3%
4%
3%
3%
0% 20% 40% 60% 80% 100%
Fertilisation between civil and military research and
development (N=1 634)
Reducing excessive dependencies in critical inputs, raw
materials and strategic technologies (N=1 748)
Insufficient mobilisation of private financing (N=1 711)
Demand-side public initiatives for innovation and strategic
technologies (N=1 704)
Ensuring continuity in EU funding across the stages from
research to manufacturing (N=1 756)
Support for small businesses and for scale up companies
from research to manufacturing (N=1 737)
Disparities in innovation and industrial capacity and
resources across Member States (N=1 748)
Attracting world class researchers, skilled workers and
entrepreneurs from abroad (N=1 759)
Translation of innovation into marketable technologies
(N=1 781)
Providing world class technological and research
infrastructure across the EU (N=1 806)
Decarbonisation and environmental sustainability of
strategic sectors (N=1 794)
Digitalisation and diffusion of advanced technologies in key
sectors (N=1 751)
Facilitating collaboration between research and industry
(N=1 806)
Q12. To what extent does the current EU budget contribute to addressing the
following challenges?
To a large extent Somewhat Very little Not at all
71
Figure 8. Support for development stages
Differences in the support for various development stages across stakeholder groups reflect their
differing roles within the innovation ecosystem:
• Academic and research respondents (min. N=435) prioritised supporting applied research
(84%, 371) and fundamental research (73%, 319), but only 23% (99) and 11% (48)
emphasised industrial deployment and manufacturing.
• In contrast, business respondents (min. N=359) placed greater emphasis on industrial
deployment (68%, 248) and manufacturing (47%, 168), with less focus on fundamental
research (30%, 108). Similarly, applied research received more moderate support (61%,
225) from businesses compared to other stakeholder groups (71-84%).
Different business stakeholders (business associations (min. N=152), SMEs (min. N=102), large
companies (min. N=105)) all showed strongest support for applied research, scaling up and industrial
deployment, and lower support for fundamental research. Some differences within this group are
evident in their support for later development stages, with large companies showing higher support
for scaling up (78%) and industrial deployment (82%) compared to SMEs (which reported 60% and
53% respectively).
4. Other consultation activities
The public consultation was complemented with other consultation activities for relevant
stakeholders both on the industry and the research and innovation areas.
For industry stakeholders, the 9th plenary meeting of the Industrial Forum held on 19th
March 2025,
focused on the new European Competitiveness Fund. The participants, represented by over 60
members from different industries and business associations as well as Member States were invited
to provide their feedback on the problems outlined in this IA. They were also invited to share ideas
on how to address these challenges.
In addition, Research and Innovation stakeholders have been very engaged in the public debate for
the future role of research and innovation in EU competitiveness, especially since the launching of
the political guidelines in July 2024 and the Competitiveness Compass in February 2025.
28%
38%
48%
54%
56%
72%
38%
36%
36%
33%
35%
21%
17%
12%
8%
5%
3%
4%
3%
13%
11%
7%
7%
6%
6%
0% 20% 40% 60% 80% 100%
Manufacturing capacities (N=1 924)
Industrial deployment (N=1 932)
Scaling up (N=1 942)
Fundamental research (N=1 936)
Early-stage development of technologies (N=1 946)
Applied research (N=1 954)
Q11. Which development stages for technologies and products should be
supported by the next MFF to support EU competitiveness?
To a large extent Somewhat Very little Not at all Don’t know/not applicable
72
Annex 3: Who is affected and how?
1. Practical implications of the initiative
Consolidation of programmes in a new European Competitiveness Fund
The Commission would propose a legislation to establish a single European Competitiveness Fund,
designed to create a unified investment capacity across strategic sectors and technologies, from
fundamental research to deployment and services. The fund would flexibly use the EU’s full financial
toolbox such as loans, grants, equity, blending, guarantees, and procurement, available across all
policy areas. Currently, 14 programmes contribute to EU competitiveness, covering areas like R&I,
defence, space, digitalisation, health, and the green transition.
2. Summary of costs and benefits
I. Overview of Benefits (total for all provisions) – Preferred Option
Description Amount Comments
Direct benefits
Proposal cost
reduction
Cost savings of 10% compared to
the baseline
The costs to prepare the proposal are
expected to decrease by 10% compared to
the baseline scenario, which would
translate into a range of EUR 4 500 and 28
800 per proposal
The time-to-inform
and the time-to-grant
reduction
Reduced by tens of days The time-to-inform and the time-to-grant
is also expected to be reduced by tens of
days for the preferred option as compared
to the baseline scenario.
Success rate Increase by approximately 10–
15% for the most oversubscribed
programmes
Indirect benefits
Social Employment impact in Option C
is 53.58% higher.
The employment impact in Option C is
53.58% higher than in Option A, mainly
due to the larger volume of investment.
Environmental An expected positive impact on
climate.
The environmental impacts of Option C
are closely tied to its prioritization of
decarbonization and clean tech as key
sectors and technologies. This focus
should lead to a positive impact on climate,
as the EU aims to achieve net-zero CO2
emissions by 2050, a target that cannot be
met by solely deploying existing
technologies.
73
I. Overview of Benefits (total for all provisions) – Preferred Option
Economic (GDP) GDP multiplier 15.74% higher The 15-year cumulative GDP multiplier
for Option C is 15.74% higher than the
baseline. This increase can be broken
down into three factors: (1).
Simplification: +3.79% due to additional
supply-side effects; (2) Investment
volume: -0.07% due to larger investment
volumes; and (3) Frontloading of
investment: +12.02% due to earlier
deployment of investment.
Economic (Export) +57.53% export activity An increased GDP and enhanced export
activity (+57.53% for the preferred option
as compared to the baseline
(1) Estimates are gross values relative to the baseline for the preferred option as a whole (i.e. the
impact of individual actions/obligations of the preferred option are aggregated together); (2) Please
indicate in the comments column which stakeholder group is the main recipient of the benefit;(3) For
reductions in regulatory costs, please describe in the comments column the details as to how the
saving arises (e.g. reductions in adjustment costs, administrative costs, regulatory charges,
enforcement costs, etc.;);.
Administrative costs
• Opt 1: Different rules on application processes would be tailored to each programme’s needs
and constituency. For each programme, taken individually, this constitutes a clear and highly
relevant minimisation of cost.
• Opt 2: Harmonisation of the application process can also come with the cost of not reflecting
each sector’s specificities (see above).
• The programmes in scope cover a broad spectrum of activities. Full harmonisation of the
application process can come with a cost, in light of the very different nature activities to
which it would apply (for instance, funding the manufacturing or construction of physical
infrastructure vs. funding researcher exchanges). Different activities entail different types of
applicants and proposals, and therefore may benefit from accommodating each sector’s
specificities. A common rulebook would also remove the specificities of the different
programmes, affecting the tailored approach / targeted support from which certain groups of
stakeholders currently benefit. In fact, some stakeholders may bear costs moving from a
tailored approach to a consolidated one: for example, researchers (ERC PIs) or startups &
SMEs (EIC) now have specific (shorter) application templates and rules tailored to their
groups, while a single rulebook would bundle together all applicant groups (researchers,
start-ups, SMEs, large companies, universities, etc.).
• Opt 3 A single Fund would mean losing the specificities of the different programmes, as well
as programme parts, affecting the tailored approach / targeted support from which certain
groups of stakeholders currently benefit.
(1) Estimates (gross values) to be provided with respect to the baseline; (2) costs are provided for each identifiable
action/obligation of the preferred option otherwise for all retained options when no preferred option is specified;
(3) If relevant and available, please present information on costs according to the standard typology of costs
(adjustment costs, administrative costs, regulatory charges, enforcement costs, indirect costs;).
74
II. Overview of costs – Preferred option
Citizens/Consumers Businesses Administrations
One-off Recurrent One-off Recurrent One-off Recurrent
Action
(a)
Direct
adjustment
costs
Adjustment
costs would
be high for
applicants
and
beneficiarie
s and would
require a
significant
adaptation.
N/A
Adjustment
costs would
be high for
applicants
and
beneficiaries
and would
require a
significant
adaptation.
N/A
Direct
adjustment
costs would
be high as
administration
s would have
to adapt to
new processes
which would
require high
administrative
capacity.
Majority of
the total
adjustment
costs would
be incurred by
the public
sector.
N/A
Direct
administrative
costs
Negative
(lower) due
to
simplified
funding
processes.
Negative
(lower
than at the
present).
Time-to-
search
would
decrease
for grants
and
remain the
same for
financial
instrument
s.
Negative
(lower) due
to simplified
funding
processes.
Costs to
prepare
the
proposal
would
decrease
by 10%.
Time-to-
search
would
decrease
by up to
20% for
grants, it
would
remain the
same for
financial
instrument
s.
Initial costs
are projected
to be high as
they are
primarily
linked to the
setup of a
single-entry
point and
advisory
service.
Comparabl
e to current
costs for
financial
instruments
, slightly
higher for
grants
because of
increased
managemen
t costs.
However,
time-to-
inform and
-grant
would
decrease.
Direct
regulatory
fees and
charges
Cannot be
estimated at
this time.
Cannot be
estimated
at this
time.
Cannot be
estimated at
this time.
Cannot be
estimated
at this
time.
Cannot be
estimated at
this time.
Cannot be
estimated at
this time.
Direct
enforcement
costs
Cannot be
estimated at
this time.
Cannot be
estimated
at this
time.
Cannot be
estimated at
this time.
Cannot be
estimated
at this
time.
Cannot be
estimated at
this time.
Cannot be
estimated at
this time.
Indirect costs N/A N/A N/A N/A N/A N/A
75
III. Application of the ‘one in, one out’ approach – Preferred option(s)
[M€]
One-off
(annualised total net
present value over the
relevant period)
Recurrent
(nominal values per year)
Total
Businesses
New administrative
burdens (INs)
N/A N/A N/A
Removed
administrative burdens
(OUTs)
Option C would
significantly reduce
administrative costs by
integrating access points
and introducing a common
rulebook, simplifying the
funding process and
creating a more efficient,
business-friendly
environment.
The simplified system will reduce
recurring administrative costs for
businesses by shortening grant
proposal preparation time. This
will save up to 10% compared to
the baseline, equal to EUR
4,500–28,800 per proposal.
A potentially
significant reduction
of administrative
costs through a
common rulebook,
including a 10%
reduction of
recurring costs.
Net administrative
burdens*
Negative burden,
potentially significant
reduction.
Negative burden, 10% reduction
of recurring administrative costs.
Negative burden,
10% reduction of
recurring
administrative costs
combined with a
significant one-off
reduction.
Adjustment costs**
Adjustment costs would be
high for applicants and
beneficiaries and would
require a significant
adaptation by organisations
accustomed to the current
structure. However,
adjustment costs are one-off
costs.
It has the highest impact
among the options, as it
changes the status quo. No
quantified data is available
currently.
N/A
Initially high
adjustment costs as
a result of a need for
applicants to
significantly adapt
to the new structure.
However, those
costs are offset with
the highest impact
of the option.
Citizens
New administrative
burdens (INs)
N/A N/A N/A
Removed
administrative burdens
(OUTs)
N/A
Some administrative burdens for
researchers will be reduced over
time, due to the simplifying
funding process.
Administrative
burdens would be
reduced as a result
of a simplified
funding process.
76
III. Application of the ‘one in, one out’ approach – Preferred option(s)
Net administrative
burdens*
N/A
Negative as burdens would be
removed over time due to a
simpler funding process.
Negative,
administrative
burdens would be
reduced as a result
of a simplified
funding process.
Adjustment costs**
Adjustment costs might be
higher for researchers that
are not supported by
university administrative
departments in the
preparation of proposals
and progress reporting.
N/A
Adjustment costs
might be higher for
researchers if they
are not supported by
university
administrative
departments.
Total administrative
burdens***
The total one-off
administrative burden
would be slightly positive,
as the stakeholders would
need to adapt to new
processes at the start.
The total recurring
administrative burden would
be significantly lowered
(negative), due to a simplified
funding and application
process, which would save up
to 10% of the current
administrative costs.
The total
administrative
burden would be
significantly
lowered (negative),
as the one-off
increase linked to
stakeholders’
adjustment would
be lower than
benefit of the
reduction of
recurring burdens.
(*) Net administrative burdens = INs – OUTs;
(**) Adjustment costs falling under the scope of the OIOO approach are the same as reported in Table 2 above. Non-annualised
values;
(***) Total administrative burdens = Net administrative burdens for businesses + net administrative burdens for citizens.
77
Annex 4: Analytical Methods
RHOMOLO model
The modelling analysis based on three scenarios for the future of the Competitiveness Fund is carried
out with the RHOMOLO model (Barbero et al., 2024).
Option A is assumed to be a continuation of the programmes as they have been implemented in the
current programming period (status quo). In the complete absence of any information regarding the
budget assigned to the Funds for the next programming period, and regarding the geographical and
sectoral distribution of the investments (nor on the nature of the investments themselves), the analysis
presented here builds on the most recent impact assessment of InvestEU carried out with the
RHOMOLO model (European Commission, 2024; Asdrubali et al., 2024).
Therefore, the policy interventions are introduced into the model by reducing the user cost of capital
in order to stimulate private investment. This leads to a temporary accumulation of the private capital
stock. Five supply-side shocks are also introduced to simulate the structural impact of investment.
The financial flows used to finance the operations are also introduced to mimic the repayment of the
loans in each region.
The InvestEU programme is characterised by a private investment multiplier of 14 (every euro of EU
guarantee generates 14 additional euro of private investment in the economy). Assuming such a high
multiplier for a scenario mimicking the impact of 14 different funds would be unrealistic, so a lower
multiplier of 4 is assumed in Option A. The funds are deployed over eight years, and we assume that
the bulk of the funds are deployed between years 5, 6 and 7. The simulation period is 20 years in
order to capture the legacy (long-term) effects of both the supply-side effects of the policy and the
increase in the private capital stock due to the investments made as a result of the policy.
These specific choices are not critical to the results of the analysis, as it is the differences between
the Options that matter, rather than the specific numerical assumptions of what is essentially a
baseline against which the results of Option B and C are compared.
This part of the modelling analysis does not differ between Options and provides the basis for
assessing the impact of the different assumptions behind the three Options.
On this basis, in the modelling analysis carried out with the RHOMOLO model it is assumed that in
Option B 25% more funds are invested thanks to a higher private investment multiplier (which
increases from 4 in Option A to 5, due to the reduced fragmentation brought by this Option) and that
the interventions benefit from an increased supply-side effect of 5% compared to Option A, as a result
of the increased in simplification, which materialises gradually over the investment implementation
period.
In Option C, we assume that the private investment multiplier is 6 (essentially, the policy shock
increases by 50% in monetary terms, again as fragmentation will be lower in this Option), that the
interventions benefit from an increased supply-side effect of 10% compared to Option A, which
materialises gradually over the investment implementation period, and that the investments are
mostly deployed in years 3 to 5 instead of 5 to 7 (as in Option A and B)) to reflect the faster
deployment of the interventions of the single Competitiveness Fund that could be expected in this
Option.
The modelling results presented here are expressed as differences from the values of selected
macroeconomic variables obtained with Option A, namely the cumulative 15-year GDP multiplier,
employment, and EU exports to the rest of the world. The GDP multiplier is a figure that can be
interpreted as the number of euros of GDP generated over a given period for each euro spent on the
policy. For example, a 15-year multiplier of 3 means that 15 years after the start of the policy, GDP
78
has increased by 3 euro for every euro invested in the policy. As Option A represents the status quo,
its specific GDP multiplier is not relevant and may correspond to the multiplier of one of the current
EU policy programmes.
The 15-year cumulative GDP multiplier of Option B is 1.51% higher than that of Option A. The
multiplier is 1.46% higher due to the 5% additional supply-side effects and 0.05% higher due to the
higher volume of investment (higher private investment multiplier). The employment impact of
Option B in year 15 is 28% higher than in Option A (the fact that the amount of funds is increased
by 25% leads to a difference of +24.45% – the rest is due to the additional supply-side effects). The
impact on EU exports to the rest of the world behaves similarly to the one on employment: it is
30.48% higher in Option B compared to Option A, with a difference of +25.56% solely due to the
higher private investment multiplier.
The 15-year cumulative GDP multiplier of Option C is 15.74% higher than that of Option A. There
are three differences between Option A and C, and the difference in the multiplier can be decomposed
according to the three channels: the multiplier is 3.79% higher due to the 10% additional supply-side
effects; it is 0.07% lower due to the larger volume of investment (higher private investment
multiplier); and it is 12.02% higher due to the frontloading of investment.
The employment impact in Option C is 53.58% higher than in Option A, once again mainly due to
the larger volume of investment. The higher private investment multiplier is responsible for a
difference of +48.13% compared to Option A, and the additional supply-side effects for +5.45% (the
different time profile has only a negligible negative impact on the difference of -0.72%, as the peak
effect is reached earlier and the decay starts earlier.). As above, the impact on EU exports to the rest
of the world is similar to that on employment. In Option C, the difference with Option A is equal to
+57.53% (+50.43% due to the higher private investment multiplier; -1.02% due to the different time
profile; and +7.10% due to the larger supply-side effects).
Thus, larger investment volumes have a negligible impact on the differences in cumulative GDP
multipliers between the scenarios (while they would have an impact in the absolute GDP changes).
On the other hand, larger supply-side effects consistently lead to higher GDP multipliers. Finally,
frontloading of investments means that the GDP benefits of the interventions start to materialise
earlier, leading to larger cumulative GDP gains over time. As for the impact on variables such as
employment and EU exports to the rest of the world, larger volumes of investments lead to
substantially higher impacts.
Figure 1 shows the % differences in the cumulative policy shock over the 8 years in which the
investments are deployed. By the end of the deployment period (year 8), the amount of investment
deployed in Option B is 25% higher than in Option A (private investment multiplier of 5 rather than
4), and the amount of investment deployed in Option C is 50% higher than in Option A (private
investment multiplier of 6 rather than 4).
The time profile of policy interventions is the same in Option A and B, so the blue line shows that in
each year the cumulative shock in Option B is 25% higher than in Option A (reflecting the investment
multiplier of 5 in Option B versus the investment multiplier of 4 in Option A). In Option C (orange
line), the frontloading of investments (most of which are deployed between years 3 and 5 rather than
between 5 and 7) leads to a temporarily larger increase in the cumulative policy injection with respect
to Option A in years 4 to 6, which goes back to 50% at the end of the deployment period.
Figure 1: % difference in cumulative shock over time (blue line: Option/Scenario 2 versus
Option/Scenario 1; orange line: Option/Scenario 2 versus Option/Scenario 1)
79
Source: own assumptions.
Finally, the results are robust to sensitivity checks. For robustness purposes, alternative hypotheses
for the Options have been implemented. For example, assuming an additional supply-side effect of
7.5% instead of 5% in Option B would lead to a difference in the 15-year cumulative GDP multiplier
in Option B relative to Option A of 2.25% (instead of 1.51%). Similarly, assuming an additional
supply-side effect of 15% instead of 10% in Option C would lead to a difference in the 15-year
cumulative GDP multiplier of 17.63% (instead of 15.74%).
As for Option C, assuming a private investment multiplier of 5 instead of 6 (higher than in Option A
but the same as in Option B) would lead to a difference in the 15-year cumulative GDP multiplier of
15.71% (instead of 15.74%).
References
Asdrubali, P., Casas, P., Christou, T., García Rodríguez, A., Lazarou, N., Salotti, S., and Weiers, G.
(2024). The RHOMOLO-EIB interim evaluation of InvestEU. JRC139530.
Barbero, J., Christou, T., Crucitti, F., García Rodríguez, A., Lazarou, N.J., Monfort, P., and Salotti,
S. (2024). A spatial macroeconomic analysis of the equity-efficiency trade-off of the European
cohesion policy. Spatial Economic Analysis 19(3), 394-410.
European Commission (2024). InvestEU interim evaluation. SWD(2024) 228 final, Brussels,
30.09.2024.
Cost benefit analysis
An external study focusing on cost/benefit analysis and comparison of the options was carried out by
a consortium led by the Centre for Strategy & Evaluation Services (CSES). The analysis was based
on existing literature as well as public evaluations of existing and previous EU programmes. The
external evaluation also provided analysis of public consultation results, included in this Impact
Assessment in Annex 2, based on systematic mapping and topic modelling using Large Language
Models and interactive dashboards and Power BI.
Despite substantial efforts to make full use of existing evaluation findings, some limitations
constrained the completeness and consistency of the evidence base and the conclusions. These
limitations can be grouped into the following categories:
a. The comparability of findings across programmes was limited. This stems from two
core issues: uneven availability of evaluation documents across the programmes and
0%
20%
40%
60%
80%
100%
120%
140%
1 2 3 4 5 6 7 8
% difference in cumulated shock over time (blue line: scenario
2 versus scenario 1; orange line: scenario 3 versus scenario 1)
Scenario 2 vs 1 Shock difference Scenario 3vs 1 Shock difference
80
varying level of depth of analysis across the different programmes. To address data
gaps, supplementary sources were consulted.
b. The analysis relied predominantly on qualitative comparisons, while quantitative
analysis relied on several assumptions. Given the nature of the policy options under
consideration, which differed primarily in governance structure and coordination
mechanisms, a mostly qualitative approach was a necessary choice. To mitigate this
issue, where feasible, a quantitative assessment of administrative costs was conducted
for applicants, beneficiaries, and the EU public sector.
c. Information on procedures and management structures of the different options was
not fully developed when the IA was drafted. Many impacts depend on details of the
regulatory framework, procedures, and implementation structures.
d. The results from the public consultation cannot be generalised as they refer to a limited
sample (2 000 respondents ca.)
While these limitations restricted the level of quantitative precision that can be achieved, they did not
undermine the general orientation or internal consistency of the conclusions reached.
81
Annex 5: Competitiveness check
1. Overview of impacts on competitiveness of the preferred option
Dimensions of
Competitiveness
Impact of the initiative
(++ / + / 0 / - / -- / n.a.)
References to sub-sections of the main report or
annexes
Cost and price
competitiveness
+ Impact Assessment:
Section 6.3.3
Section 7.2
Assessment of Costs and Benefits
Section 4 .1.1
International
competitiveness
++ Impact Assessment:
Section 6.3.3
Assessment of Costs and Benefits:
Section 5.2
Section 6.3.4
Section 4.1.1
Capacity to
innovate
+ Impact Assessment
Section 6.2.3.1
Section 8.1
SME
competitiveness
++ Impact Assessment
Section 6.2.3
Assessment of Costs and Benefits
Section 4.1.1
Section 5.6
2. Synthetic Assessment
2.1 Cost and price competitiveness
The preferred option is expected to improve cost and price competitiveness by reducing
administrative complexity, harmonising procedures, and lowering participation costs, due to
streamlined applications and simplified rules. Faster processing times will reduce time-to-inform and
time-to-grant by several tens of days for more complex programmes. For instance, this option is
expected to have the shortest proposal preparation time for grants, resulting in the cost savings of
10% compared to the baseline, (in monetary terms, the costs would range between EUR 4500 – EUR
28 800 per proposal. A single access gateway will reduce the effort needed to identify funding
opportunities, especially for smaller actors. A unified framework for applications and reporting will
lessen burdens for both applicants and implementers. Although short-term adjustment costs are
likely, such as updates to internal systems and uncertainty during transition, these are one-off costs.
Once in place, the new structure will offer a predictable and cost-efficient landscape.
82
2.2 International competitiveness
The initiative is expected to strengthen EU international competitiveness by consolidating
fragmented programmes into a single strategic fund capable of supporting large-scale cross-border
projects. This structure will streamline investments and improve productivity, generating spillovers
to adjacent sectors and reinforcing the EU’s global value chain position. Funded technologies may
have applications in other industries, further enhancing innovation. The initiative also allows for
stronger strategic steering and selection of high-impact projects, while ensuring predictability for
investors. Strategic autonomy will be enhanced through support for domestic manufacturing
capacities and reduced dependence on foreign supply chains. The coherent approach will improve
the global market position of EU firms. An increased GDP and enhanced export activity (+57.53%
for the preferred option as compared to the baseline) are both expected to strengthen the EU’s
competitiveness in the international arena by improving productivity, fostering innovation, and
enhancing efficiency, among other factors.
2.3 Capacity to innovate
The initiative will positively impact the EU’s capacity to innovate, despite temporary adaptation
challenges. An appropriate balanced between flexibility and predictability will have to be reached.
Continuous investment from research to deployment will help bridge gaps between knowledge
generation and market application. At the same time, consolidation into one Fund covering the whole
investment journey can facilitate the market uptake of research results and better articulate applied
research with industrial priorities. The preferred option would also entail dedicated policy windows
and policy steer on digital technologies as well as on resilience, defence, and space, enhancing the
deployment of critical technologies from research to market and increasing policy and financing
coherence.
2.4 SME competitiveness
SMEs will benefit significantly from a simplified and unified funding environment. A single access
point and harmonised procedures will lower participation barriers and reduce administrative costs.
The time-to-inform and the time-to-grant is also expected to be reduced by tens of days for the
preferred option as compared to the baseline scenario. This is particularly important for SMEs lacking
the capacity to navigate through fragmented programmes. Additionally, the initiative ensures
continuous support across the investment journey and improves access to capital and advisory
services. Streamlined rules will reduce application complexity and expand access to funding tools,
enhancing project bankability. Although the removal of some programme-specific features may
reduce tailored support, the long-term gains from simplified access, increased visibility, and a more
predictable framework are expected to outweigh these drawbacks. With appropriate transitional
measures, SMEs will be better positioned to scale and compete.
3. Competitive position of the most affected sectors
Since the budget allocation has not yet been determined for specific windows, it is currently
impossible to specify which sectors are most affected, and this therefore falls outside the scope of
this impact assessment. The preferred option is expected to support strategic sectors and a seamless
funding path from fundamental research to market deployment thus reshaping the EU’s industrial
base into a more resilient and globally competitive system. By focusing resources on fewer high-
impact areas, the initiative aims to maximise returns and catalyse innovation. Positive spillover
effects are expected, as technologies developed under the fund may benefit adjacent sectors. Demand
generated by beneficiaries is also expected to raise productivity in supplier networks. As innovations
mature, they may disrupt market structures and enhance competition within the Single Market. The
fund positions the EU to act as a coherent industrial actor, coordinating investment with long-term
policy objectives and reinforcing competitiveness across sectors
83
Annex 6: SME check
Overview of impacts on SMEs
Relevance for SMEs
Based on SME filter and the ISG discussion, this initiative is relevant/highly relevant for SMEs1
(1) Identification of affected businesses and assessment of relevance
Are SMEs directly affected? (Yes/No) In which sectors?
The European Competitiveness Fund would be structured along a few policy windows
corresponding to the strategic priorities crucial for the EU competitiveness and resilience (from AI
and digital to space, from clean tech to biotech, from defence and resilience to health). Since the
budget allocation has not yet been determined and falls outside of the scope of this IA, it is currently
impossible to specify which sectors will be most affected.
SMEs operate across key strategic sectors, including advanced manufacturing, clean technologies,
blue economy, digital transformation, biotechnology, professional services, defence and space.
Defence and Space sector is very meaningful to illustrate the magnitude of SME’s involvement in
the strategic sectors. SMEs constitute there around 80% of that sector including innovative startups,
often with strong links to other ecosystems (such as electronics). SMEs and startups serve as key
collaborators, providing expertise, niche technologies and agile, disruptive solutions. They play a
critical role in the supply chain, contributing with components, subsystems, software, engineering
services and research to the broader ecosystem. Their agility and innovation prowess often result in
groundbreaking advancements, especially in areas like avionics, materials, propulsion and satellite
technology. Despite their crucial role, SMEs operating within the defence sector face higher barriers
to accessing finance compared to companies active in other sectors (50% of SMEs refrained from
seeking debt financing in the defence sector, compared to 6.6% average among SMEs in the EU
during between 2021-2022)189
. The initiative is also relevant for SMEs from traditional sectors, who
can innovate.
The consolidation of 14 existing EU funding tools into a single Competitiveness Fund is expected
to facilitate SMEs access to funding throughout the investment journey, from research to
deployment. It helps stimulate the participation of SMEs and help opening up the supply chains,
linking large companies with SME ecosystems across the EU.
SME specific support could be built in the architecture of the Competitiveness Fund to allow SMEs
to use the funding more efficiently than under the previous MFF.
Estimated number of directly affected SMEs
Although a total number of SMEs participating in all the programmes under the scope of this
initiative is not available, scale of SME’s involvements can be illustrated by the participation number
of SMEs in programmes for which this data is available: Based on the collected data, 332 236 SMEs
benefitted from the 9 programmes over different timeframes between 2020 and 2025. This figure is
obviously an underestimation of the total number of SMEs supported by the programmes over a
programming period. It refers, approximately, to half a programming period, does not cover all
189
A new European Defence Industrial Strategy: Achieving EU readiness through a responsive and resilient European
Defence Industry.
84
programmes under scope, and only refers to beneficiaries (i.e. excluding applicants). Based on this,
a rough estimate can be put forward (but to be interpreted with caution) about the total number of
SMEs affected by the introduction of the Competitiveness Fund (option 3): it is estimated that this
number is approximately one million SMEs.190
Estimated number of employees in directly affected SMEs
According to the European Commission, Europe has 24.3 million SMEs, providing jobs to more
than 85 million European citizens, i.e. with a ratio of about 3.5 jobs per SME. As such, the estimated
number of employees in directly affected SMEs is 3.5 million.
Are SMEs indirectly affected? (Yes/No) In which sectors? What is the estimated number of
indirectly affected SMEs and employees?
Positive spillover effects are expected, as technologies developed under the fund may benefit
adjacent sectors. Demand generated by beneficiaries is also expected to raise productivity in supplier
networks. While a precise number is not available, SMEs are also indirectly affected. The creation
of a single fund is expected to stimulate broader market activity by simplifying funding access,
which can generate spillover effects in supporting sectors—such as consulting, supply chains, legal
services, and skills.
2. Consultation of SME stakeholders
How has the input from the SME community been taken into consideration?
The Commission gathered SME input through open public consultations, where more than 100191
SMEs and SME associations contributed. SMEs highlighted difficulties with fragmented funding
instruments and administrative burdens. Additionally, stakeholders including SME association
represented by SMEUnited were consulted in a targeted manner through the 9th
plenary meeting
of the Industrial Forum of 19th
March 2025, which was specifically dedicated to the
Competitiveness Fund initiative.
During the exchange session, members, including representative SME associations, raised similar
challenges, particularly the lengthy processes to access funding. They called for simpler, leaner,
and faster procedures, emphasising the need for a ‘one-stop-shop’ for funding opportunities to
streamline access. Members of the Forum highlighted the importance of supporting all
Technology Readiness Levels (TRLs), both for deep tech and traditional sectors, and stressed that
more funding should be dedicated to deployment, manufacturing and scaling up (high TRLs).
Capacity building and advisory support must go hand in hand with financing. They also expressed
a strong need for robust funding to support long-term competitiveness and prosperity,
underscoring the importance of mobilising private funding alongside national and regional
resources. State aid framework should be simplified and revised to allow support for high TRLs.
Strategic projects should be prioritised (IPCEIs), with clear conditionalities to de-risk the value
chain. Concerns were raised about the risk of losing advanced manufacturing to global
competitors and the need for clearer frameworks and tailored support for SMEs. They also
emphasised the importance of supporting clean industries, welcoming the new Clean Industrial
Deal, and ensuring strategic investment across the value chain.
190
European Commission (2025): Competitiveness Fund: Assessment of costs and benefits and comparison of options
191
Synopsis report.
85
Through an interactive survey, members were asked about which key priorities the
Competitiveness Fund should address. Simpler, leaner and quicker processes to access funding
were voted for as the main priority, followed by funding for scale-up, manufacturing and
deployment, the need for de-risking private investments, and a ‘one-stop-shop’ for funding
opportunities.
Are SMEs’ views different from those of large businesses?
While large companies can manage complexity of different requirements per programme and
scattered funding information due to greater resources, SMEs often find the current system
fragmented and difficult to navigate. They are more dependent on streamlined processes, and thus
more supportive of the consolidation into one funding tool. SMEs favoured stronger guidance,
simpler eligibility rules, and faster access to funding—all of which have been integrated into the
Competitiveness Fund. The time-to-inform and the time-to-grant is also expected to be reduced
by tens of days, especially helping SMEs.
3. Assessment of impacts on SMEs3
What are the estimated direct costs for SMEs of the preferred policy option ?
Qualitative assessment
The direct costs for SMEs under the Competitiveness Fund relate mainly to transitional efforts—
adjusting to the new rules and learning the consolidated application system. However, these are
expected to be temporary. Over time, SMEs will face significantly lower costs due to reduced
administrative and compliance burdens.
Quantitative assessment
Current proposal is expected to have the shortest proposal preparation time for grants, expected
to decrease by 10% compared to the baseline, translating into monetary costs in the range of EUR
4500 – EUR 28 800 per proposal. With the streamlined procedures in the Competitiveness Fund,
this is expected to fall.
What are the estimated direct benefits/cost savings for SMEs of the preferred policy
option4?
Qualitative assessment
Qualitatively, SMEs will benefit from easier access to funding, and lower reporting and
compliance burdens. The consolidation will enhance predictability, reduce overhead, and allow
SMEs to focus on their core activities, and create innovation and growth.
Quantitative assessment
There are no current quantitative numbers on the estimated cost savings for SMEs. But when
reduced documentation and harmonized rules are applied across 1 million of SMEs, this could
result in high savings across the EU. The time-to-inform and the time-to-grant is also expected to
be reduced by tens of days for the preferred option as compared to the baseline scenario.
86
What are the indirect impacts of this initiative on SMEs?
Indirectly, SMEs will benefit from a stronger, more coherent investment ecosystem that fosters
innovation, enables scale-up, and integrates EU funding across the value chain. These changes
reduce transaction costs, improve coordination, and expand access to finance.
4. Minimising negative impacts on SMEs
Are SMEs disproportionately affected compared to large companies? (Yes/No)
If yes, are there any specific subgroups of SMEs more exposed than others?
No
Have mitigating measures been included in the preferred option/proposal? (Yes/No)
SMEs will benefit through:
• Single-entry application portal
• Simplified, harmonized rules
• Streamlined advisory services. These will make funding more accessible and reduce cost
and complexity for SMEs.
• One Stop for advisory services
Contribution to the 35% burden reduction target for SMEs
Are there any administrative cost savings relevant for the 35% burden reduction target for
SMEs?
The expected administrative cost savings under the Competitiveness Fund are supported by the
simplification measures proposed, such as a single-entry point and harmonised procedures. These
are designed to reduce the complexity and administrative burden for SMEs, contributing to the
EU’s 35% burden reduction target.
87
Annex 7: Synergies between Horizon Europe and other EU programmes
External evaluation support studies for Horizon Europe192
have found evidence of synergies with 18
programmes out of the 20 identified in the Horizon Europe regulation – to a varying extent. Based
on interviews, financial data and text analysis, the strongest synergies were identified with the
LIFE programme, Erasmus+ and the Digital Europe programme, while the weakest evidence
concerns synergies with the Common Agricultural Policy (with the exception of Cluster 6), the
Creative Europe programme and InvestEU.
Despite Commission efforts to create synergies, 64% of beneficiaries surveyed (4 045 out of 6
280 respondents) reported that they had not sought additional funding for their research
projects. Among unsuccessful applicants, 29% of survey respondents (2 587) applied for alternative
sources of funding. Over half of the beneficiaries also stated that the project they were working on
was not a continuation of previous or other funding schemes193
.
The Seal of Excellence (SoE) is a quality label which shows that a proposal exceeded all of the
evaluation thresholds but could not be funded due to lack of budget. With this label the Commission
recognises the value of project proposals and encourage other funding organisations to take advantage
of the high-quality Horizon Europe evaluation process. This quality label, which was awarded to 7
166 high quality proposals that could not be funded between 2021 and 2024, is a relevant instrument
to strengthen synergies in Horizon Europe. The largest proportion was awarded to researchers who
applied under the Marie Skłodowska-Curie Actions, followed by the EIC Accelerator and the ERC
Proof of Concept scheme.
Around half of unsuccessful applicants who responded to the evaluation survey (45% of the 129
respondents) reported that the SoE did not make it easier to secure alternative funding. In open
question responses, applicants specifically mentioned a lack of follow-up funding opportunities in
their respective Member States that recognise their SoE. Nevertheless, Member States have seized
the opportunity of creating synergies between Horizon Europe and the Recovery and Resilience
Facility by supporting SoE projects.
Regarding European Partnerships, it has been reported in the Biennial Monitoring Report survey that
their synergies mostly consist of strategic exchanges, communication and dissemination of
results and networking with project partners in the same area of research or a similar one.
Only one third of BMR partnership respondents indicated joint calls for research and/or innovation
proposals (together with other partnerships)194
. Nevertheless, five partnerships reported that the share
of budget covered by regional and national funds is above 50%: Risk assessment of chemicals – 50%,
Global health EDCTP3 – 59%, Metrology – 56%, and Biodiversa – 79.4%.
Several JUs are co-funded by other EU programmes, including the EuroHPC JU, which receives
most of its funding from the Digital Europe programme and the Connecting Europe Facility; the
Clean Hydrogen JU, co-funded by REPowerEU; and Chips JU, which is co-funded by the Digital
Europe Programme. Among the co-programmed partnerships, only ‘Clean Steel - Low Carbon
Steelmaking’ has received a commitment of funding from other EU funds.
192
Excellent Science:, Resilient Europe: Digital & Industrial Transition:, Green Transition:, Innovative Europe (2024)
193
Reaching as high as 60% of respondents in Pillars I and III. Source: Survey of beneficiaries, May-July 2023.
194
European Commission, Biennial Monitoring Report (BMR), 2024, p. 37
88
Annex 8: Summary of the 14 programmes under scope
InvestEU
Regulation
Regulation (EU) No 2021/523 of the European Parliament and of the Council
Legal base: Article 175(3) of the Treaty on the Functioning of the European Union
Period
2021 – 2027
Impact assessment
Carried out in 2018: https://europa.eu/!jV77BQ
Mid-term evaluation
Carried out in 2024: link
Budget
The InvestEU programme’s budget is EUR 10.189 bln for the 2021-2027 period. This includes EUR
6.074 bln from NextGenerationEU to provide crucial support to companies in the recovery phase. The
budget underpins a nominal EU Guarantee of EUR 26.2 billion (at a provisioning rate of 40% of the
nominal EU Guarantee amount). EUR 430 million is foreseen for InvestEU Advisory Hub and InvestEU
Portal.
Focus
The InvestEU programme aims to ensure an additional boost to investments fostering recovery,
resilience, green growth and employment in the EU over the 2021-2027 period. This goal is achieved
by mobilising public and private financing sources, in order to provide long-term funding and support
to companies and projects in line with the EU priorities in the current challenging economic and social
context. Furthermore, InvestEU is an important vehicle to implement the REPowerEU Plan as well as
the Green Deal Industrial Plan, aiming to accelerate clean tech and industrial innovation to reach the
EU’s 2030 clean energy targets.
The InvestEU programme consists of: the InvestEU Fund; the InvestEU Advisory Hub; the InvestEU
Portal.
Delivery mode
InvestEU is implemented in indirect management through the European Investment Bank (EIB) Group
and other implementing and advisory partners. DG GROW is in the lead for the Commission.
Predecessor
The InvestEU Fund brings together 13 EU financial instruments (CEF Equity, COSME EFG, EaSI
Capacity Building IW, Innovfin Equity, EaSI Guarantee, Student Loans GF, COSME Loan Guarantee
Facility, Private Finance for Energy Efficiency, Innovfin Debt, Cultural and Creative Sector GF) and
an EU budgetary guarantee (the European Fund for Strategic Investments - EFSI) into a single EU
investment support programme. Similarly, the InvestEU Advisory Hub acts as a central entry point for
advisory requests and aggregated 13 existing advisory initiatives from the previous MFF, including the
European Investment Advisory Hub (EIAH), Island Facility, City Facility, EEEF technical assistance,
PF4EE Expert Support Facility, Smart Specialisation Platform for Industrial modern, InnovFin
89
Advisory, H2020 (EE11 PDA), European Local Energy Assistance (ELENA), CEF (through
JASPERS), NCFF support facility, EaSI Technical Assistance, CEF Programme Support Actions.
Type of recipients
Public and private investors and project promoters, small and medium-sized enterprises and mid-caps,
service providers and recipients of microfinance.
Forms of EU support
EU guarantee; grants; loans; advisory.
Third countries associated to the programme
The EU compartment of the InvestEU Fund and each of the policy windows may receive contributions
from the following third countries for the purpose of participation in certain financial products:
members of the European Free Trade Association (EFTA) which are members of the EEA; acceding
countries, candidate countries and potential candidates; European Neighbourhood Policy countries;
other third countries, based on a specific agreement (Reg. (EU) No 2021/523, Art. 5).
Application
For support from the InvestEU Fund, project promoters apply directly to implementing partners on
suitable financing solutions based on the financial products supported by the EU guarantee.
Implementing partners select financial intermediaries through procedures such as calls for expressions
of interest.
To apply for advisory support, the InvestEU Advisory Hub is the central entry point for project
promoters and intermediaries seeking advisory support and technical assistance related to centrally
managed EU investment funds. Managed by the European Commission, the InvestEU Advisory Hub
connects project promoters and intermediaries with advisory partners, who work directly together to
help projects reach the financing stage. Within the InvestEU Central Entry Point, a set of questions
helps identify advisory needs and the potential advisory partner most suitable to address them.
Applicants are also invited to provide details about support needs (e.g. location, area of activity sector,
type of advisory support needed, maturity of the proposal and beneficiary contact details).
Horizon Europe
Regulation
Regulation of the European Parliament and of the Council establishing Horizon Europe – the
Framework Programme for Research and Innovation, laying down its rules for participation and
dissemination COM(2018) 435.
Legal base: Article 173(3), Article 182(1), Article 183, and the second paragraph of Article 188
(procedure for adoption, TBD)] of the Treaty on the functioning of the European Union
Period
2021 – 2027
Impact assessment
Carried out in 2018: link
Mid-term evaluation
Forthcoming
90
Budget
EUR 93.5 bln. This includes EUR 5.4 bln from NextGenerationEU to boost recovery and make the EU
more resilient for the future, as well as an additional reinforcement of EUR 4.5 bln.
Focus
Horizon Europe is the EU’s largest funding programme for research and innovation activities. Its
general objective is to ‘deliver scientific, technological, economic and societal impact from the Union's
investments in R&I so as to strengthen the scientific and technological bases of the Union and foster
the competitiveness of the Union in all Member States including in its industry, to deliver on the Union
strategic priorities and to contribute to the realisation of Union objectives and policies, to tackle global
challenges, including the Sustainable Development Goals by following the principles of the 2030
Agenda and the Paris Agreement, and to strengthen the European Research AreaHorizon Europe is also
implemented through its Specific Programme and through the European Defence Fund and
complemented by the Euratom Research and Training Programme.
Delivery mode
Implemented directly by the Commission (DG RTD coordinating the co-design process with relevant
policy DGs) or via funding bodies designated by it (in particular executive agencies). The association
of policy DGs allows strong policy steer on R&I priorities and stronger consideration of the relevant
stakeholders needs.
Predecessor
Horizon 2020. As a result of the interim evaluation of the Horizon 2020 programme, some changes
were made that are continued under Horizon Europe for example the European Innovation Council pilot
launched in 2017 to support breakthrough innovation. In addition, novelties have been introduced in
Horizon Europe, notably:
• EU missions, to deliver targeted solutions to societal challenges together with citizens;
• Streamlined approach to European Partnerships, to rationalise the funding landscape;
• Extended association possibilities, to strengthen international cooperation;
• Open Science policy, to reinforce openness;
• Widening participation and spreading excellence, to decrease the R&I gap in Europe;
• Synergies with other EU programmes and policies, to increase the R&I impact; and
• Simpler rules, to reduce administrative burden.
Type of recipients
Private-for-profit entities, higher or secondary education establishments, research organisations, public
bodies, and others.
Forms of EU support
Grants, prizes, procurement and financial instruments.
Third countries associated to the programme
There are four categories of countries eligible for association with the programme:
• Members of the European Free Trade Association (EFTA) which are members of the
European Economic Area (EEA)
• Acceding countries, candidate countries and potential candidates
• European Neighbourhood Policy (ENP) countries
91
Other third countries and territories that fulfil a set of criteria related to their economic, political and
research and innovation systems
The association of third countries also implies a substantial financial input. The combined annual
financial contribution of the associated countries is close to EUR 3 billion.
Application
For most collaborative projects funded under Horizon Europe, the application process is the following:
• Horizon Europe work programmes announce the specific research and innovation areas that
will be funded.
• The European Commission publishes calls for proposals based on the work programmes. The
calls for proposals are grouped by subject areas – so-called “destinations”. The destinations
are based on the EU’s policy priorities.
• All calls for proposals, the specific call topics, the deadlines and application forms can be
found on the one-stop-shop Funding and Tenders Portal.
• .After the call for applications for funding has closed, the process moves to the evaluation
phase.
Digital Europe Programme (DEP)
Regulation
• Regulation (EU) 2021/694 of the European Parliament and of the Council of 29 April 2021
establishing the Digital Europe Programme and repealing Decision (EU) 2015/2240.
• Regulation (EU) 2023/1781 of the European Parliament and of the Council of 13 September
2023 establishing a framework of measures for strengthening Europe’s semiconductor
ecosystem and amending Regulation (EU) 2021/694 (Chips Act)
• Regulation (EU) 2024/903 of the European Parliament and of the Council of 13 March 2024
laying down measures for a high level of public sector interoperability across the Union
(Interoperable Europe Act)
Legal base: Article 172 of the Treaty on the functioning of the European Union
Period
2021 – 2027
Impact assessment
Carried out in 2018: link
Mid-term evaluation
Not publicly available (planned for fourth quarter 2025)
Budget
The Digital Europe programme’s original budget was EUR 7.588 bln covering five specific objectives
over the 2021-2027 period. For the implementation of the new specific objective 6 (semiconductors),
EUR 800 mln were transferred to Digital Europe programme. On the other hand, EUR 270 mln were
transferred from the Digital Europe programme to the Secure Connectivity Programme. Further changes
through the Chips Act brought the programme’s total budget to EUR 8.168 bln.
92
Focus
The Digital Europe programme (DEP) aims to deploy pan-European digital infrastructures and
capacities, and bring digital technology to businesses, citizens and public administrations. It provides
strategic funding to face challenges in the area of digital technology and infrastructure, supporting
projects in six key capacity areas: supercomputing, artificial intelligence, cybersecurity, advanced
digital skills, interoperability, and the wide use of digital technologies across the economy and society,
including through digital innovation hubs, and semiconductors. The specific objective on
semiconductors was integrated into the Digital Europe Programme with the adoption of the Chips Act
Regulation, which promotes Europe’s leadership in semiconductor technologies and applications.
Delivery mode
Three specific objectives (artificial intelligence, advanced digital skills, deployment and best use of
digital capacities and interoperability) are managed directly by the Commission, with support in some
areas from the Executive Agency for Health and Digital (HaDEA). The other three specific objectives
(high-performance computing, cybersecurity and trust, semiconductors) are implemented respectively
through the EuroHPC joint undertaking, the European Cybersecurity Industrial, Technology and
Research Competence Centre, and the Chips Joint Undertaking. Some activities are implemented via
Contribution Agreements with the European Space Agency (ESA), the European Centre for Medium-
Range Weather Forecasts (ECMWF) and the European Operational Satellite Agency for Monitoring
Weather, Climate and the Environment from Space (EUMETSAT) for Destination Earth, with the
European Union Agency for Cybersecurity (ENISA) for cybersecurity and the European Union Agency
for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and
Justice (eu-LISA) for the digitalisation of justice. The financial instruments, the Investment Platform
for Strategic Digital Technologies and the Chips Fund, are implemented through indirect management
with the European Investment Fund under InvestEU.
The lead DG is DG Communications Networks, Content and Technology (DG CNECT), with other
DGs also involved (DG DIGIT, DG FISMA, DG JUST, DG GROW).
Predecessor
None
Type of recipients
Public and private organisations, industry and small and medium-sized enterprises, scientists and
academics, universities, etc.
Forms of EU support
Grants and procurements.
Third countries associated to the programme
• Iceland, Liechtenstein, and Norway are fully associated as members of the European Free
Trade Association (EFTA) and the European Economic Area (EEA). Additionally, Ukraine,
Montenegro, North Macedonia, Serbia, Albania, Kosovo, Turkey, Moldova, and Bosnia and
Herzegovina are associated countries. Switzerland can also participate under transitional
arrangements as of January 1, 2025, but with specific limitations.
Application
• Calls for proposals are published on the Funding & Tenders Portal, based on the annual work
programme set by the European Commission. Applicants must submit their proposals
93
electronically via the portal, following the specific guidelines and templates provided for each
call.
Innovation Fund
Regulation
Commission Delegated Regulation (EU) 2019/856
Legal base: Article 10a(8) of Directive 2003/87/EC
Period
2021 – 2030
Impact assessment
Carried out in 2018: link
Mid-term evaluation
Not publicly available (planned for 2025)
Budget
The revised EU emissions trading system directive stipulates that the Innovation Fund will be endowed
with the revenues from the auctioning of around 530 million allowances from 2020 to 2030 and any
unspent revenues from the second call of the predecessor programme, the NER 300, which translates
into around EUR 40 bln (at a carbon price of EUR 75 per tonne of carbon dioxide). The budget
programming for 2021-2027 amounts to EUR 8.3 bln.
Focus
The Innovation Fund aims at catalysing funding for highly innovative technologies and flagship projects
in all Member States that can yield significant emission reductions. The Innovation Fund is the EU fund
for climate policy, with a focus on energy and industry. It aims to bring to the market solutions to
decarbonise European industry, scale up clean tech manufacturing and support its transition to climate
neutrality while fostering its competitiveness.
Delivery mode
The Innovation Fund is implemented in direct management by the Commission (DG Climate Action)
with the assistance of the European Climate, Infrastructure and Environment Executive Agency, to
which the implementation of the grant component of the programme is delegated. Some activities are
implemented in indirect management, through the European Investment Bank (EIB), for the
management of the project development assistance support, and the channelling of Innovation Fund
resources via financial instruments. The monetisation of the Innovation Fund allowances and the
management of the Innovation Fund revenues have also been delegated to the EIB.
Predecessor
The Innovation Fund builds on its predecessor, the NER 300 programme (which was an off-budget
fund, thus not part of the 2014-2020 MFF), but it is open also to projects from energy-intensive
industries, has a larger grant coverage, provides support in more flexible ways, and – following
94
recommendations from the European Court of Auditors – has a streamlined governance and simplified
decision-making.
Type of recipients
Any legal entity (private company, public body, consortium) registered in countries in the European
Economic Area that participate in the EU ETS.
Forms of EU funding
Grants, prizes, and procurement. Innovation Fund grants can be combined with funding from other
support programmes. For example, its resources may contribute to InvestEU financial instruments, to
provide debt or equity financing to innovative clean-tech projects. Also, the programme may award
project development assistance in the form of technical assistance
Third countries associated to the programme
Liechtenstein, Iceland, and Norway.
Application
The Innovation Fund awards grants through regular calls for proposals and competitive bidding
procedures (auctions). The application procedures follow the following steps:
• Call issuance & requirements: CINEA (under DG CLIMA) publishes open calls, either single-
stage or two-phase (Expression of Interest + Full Proposal), detailing project scope, eligibility,
evaluation criteria, and deadlines
• Proposal submission via portal: Project promoters can apply via the EU Funding and Tenders
portal by submitting their proposals when there is an open call for projects.
Evaluation and award criteria: Proposals are evaluated externally based on effectiveness of
greenhouse gas emissions avoidance, degree of innovation, project maturity, replicability, cost
efficiency. Small-scale projects may follow simplified evaluation.
LIFE
Regulation
Regulation (EU) 2021/783 of the European Parliament and of the Council
Legal base: Article 192(1) of the Treaty on the functioning of the European Union
Period
2021 – 2027
Impact assessment
Carried out in 2018: link
Mid-term evaluation
Not publicly available (planned for third quarter 2025)
Budget
The current LIFE programme (2021-2027) has a total budget of EUR 5.45 bln (compared to EUR 3.4
bln for previous programme 2014-2020).
95
Focus
The programme for the environment and climate action (LIFE) aims to facilitate the shift towards a
sustainable, circular, energy-efficient, renewable energy-based, climate-neutral and climate-resilient
economy. LIFE contributes to reduce greenhouse gas emissions and our vulnerability to the harmful
effects of climate change, to protect, restore and improve the quality of the environment – including air,
water and soil – and to halt and reverse biodiversity loss. Moreover, it tackles the degradation of
ecosystems, including through supporting the implementation and management of the Natura 2000
network, thereby contributing to sustainable development.
Delivery mode
LIFE is implemented through direct management (grants, procurement, prizes and technical assistance
to support investments) and indirect management for specific activities, including with the European
Investment Bank (EIB) to support the mobilisation of investments in line with the objective of the LIFE
programme. Within the Commission, DG Environment is the lead, with support from DG Energy and
DG Climate Action. Each DG is responsible of specific subprogrammes. The European Climate,
Infrastructure and Environment Executive Agency manages the bulk of the grants, few procurement
activities and a technical assistance scheme to support green investment and the greening of other
investments (Green Assist).
Predecessor
The 2021-2027 LIFE programme builds on the strategic integrated projects first launched under the
2014-2020 LIFE programme. Compared to the previous MFF, the number of subprogrammes has
increased from two (environment and climate action) to four (nature and biodiversity, circular economy
and quality of life, climate change mitigation and adaptation, and clean energy transition). The ‘Clean
energy transition’ subprogramme has an incorporated actions for capacity building supporting energy,
efficiency and renewable energy previously funded under Horizon 2020 (until 2020).
Type of recipients
EU national or local authorities, private commercial organisations and private non-commercial
organisations (e.g. non-governmental organisations).
Forms of EU support
Grants, procurements and prizes.
Third countries associated to the programme
Iceland, Moldova, North Macedonia, and Ukraine.
Application
Calls for proposals are published on the Funding & Tenders Portal, based on the annual work
programme set by the European Commission. Applicants must submit their proposals electronically via
the portal, following the specific guidelines and templates provided for each call.
Connecting Europe Facility (CEF)
Regulation
Regulation (EU) No 2021/1153 of the European Parliament and of the Council
Legal base: Article 172 of the treaty on the functioning of the European Union
96
Period
2021 – 2027
Impact assessment
Carried out in 2018: link
Mid-term evaluation
Not publicly available (planned for 2025)
Budget
EUR 31.72 bln (budget programming 2021-2027) – CEF-Digital: EUR 1.8 bln,
Focus
CEF aims to develop and modernize trans-European networks, supporting the 2030 climate and energy
targets, long-term decarbonization goals of the European Green Deal, and fostering sustainable growth
and cohesion. It targets investments in the transport, energy and digital sectors.
Delivery mode
CEF is implemented under direct management by the Commission through Executive Agencies:
CINEA for transport and energy and HaDEA for digital.
Predecessor
For the transport and energy sectors, the CEF continues the successful work of its 2014-2020
multiannual financial framework predecessor, with a focus on new priority actions, such as dual-use
civilian-military infrastructure requirements, new energy infrastructure categories and cross-border
projects in the field of renewable energy. For the digital strand, the CEF departs from the 2014-2020
CEF Telecom by being fully dedicated to supporting the deployment of high-performance digital
communication infrastructures. While building on the experience gained with the previous programme,
CEF Digital represents a step forward in terms of the scope, volume and intensity of the proposed EU
support, in particular concerning new critical infrastructures like 5G corridors and secure backbone
networks.
Compared to its predecessors, CEF introduced improvements such as a unified management structure
(delegated to Executive Agencies), common coordination, better monitoring, diversified funding rates,
and shared financial instruments across transport, energy, and telecommunications.
Type of recipients
Industry, small and medium-sized enterprises, research organisations, other public and private entities
established in a Member State or in a non-EU country associated with the programme, or created under
EU law, and international organisations.
Forms of EU support
Grants and procurements. CEF may also contribute to blending operations.
Third countries associated to the programme
There are four categories of countries eligible for association with the programme:
• Members of the European Free Trade Association (EFTA) which are members of the European
Economic Area (EEA)
• Acceding countries, candidate countries and potential candidates
97
• European Neighbourhood Policy (ENP) countries
Other third countries based on specific agreements.
Application
Calls for proposals under CEF are defined in line with multiannual and annual Work Programmes
adopted by the European Commission. These Work Programmes set the strategic priorities, available
budget per sector (Transport, Energy, Digital), and detailed conditions for funding. Each call specifies
the objectives, eligibility criteria, funding rates, and expected impacts, and may target specific project
types (e.g. cross-border transport links, renewable energy corridors, or 5G infrastructure). Calls are
launched on the EU Funding & Tenders Portal and are typically open for several months. Applicants
submit proposals via the EU Funding & Tenders Portal, using available templates.
European Defence Fund (EDF)
Regulation
Regulation (EU) 2021/697 of the European Parliament and of the Council
Legal base: Article 173(3), Article 182(4), Article 183 and the second paragraph of Article 188 of the
treaty on the functioning of the European Union
Period
2021 – 2027
Impact assessment
Carried out in 2018: link
Mid-term evaluation
Not yet published
Budget
Around EUR 7.95 billion.
Focus
The European Defence Fund aims to promote cooperation between companies, including SMEs and
research actors throughout the Union. It also aims to boost defence capability development through
investments and to help EU companies develop innovative technologies and equipment.
The European Defence Fund, with its instrument EUDIS, will support the Defence Equity Facility, a
component of the InvestEU initiative.
Delivery mode
Implemented directly by the Commission (DG DEFIS), which will be supported by the National Focal
Points (NFPs). On an ad hoc basis, and if justified, specific initiatives may be implemented under
indirect management.
Predecessor
98
The EDF builds and expands on the experience acquired through two precursor programmes
implemented under the 2014-2020 multiannual financial framework, namely the Preparatory Action on
Defence Research (PADR) and the European Defence Industrial Development Programme (EDIDP).
The design of the EDF largely builds on the architecture of these two 2014-2020 programmes, but it
has been implemented as one single fund. The EDF is expected to lead to better exploitation of defence
research results, bridging the gap between the research and the development phases and promoting all
forms of innovation, including support for disruptive defence technologies, and to encourage small and
medium-sized enterprises and entities not yet involved in defence-specific research and development to
participate in the programme and to be involved in cross-border cooperation.
Type of recipients
Industry consortia; companies of all sizes, including small and medium-sized enterprises and mid-caps;
research centres and universities.
Forms of EU support
Grants.
Third countries associated to the programme
Norway.
The Fund is open to the participation of members of the European Free Trade Association which are
members of the EEA.
• For the purposes of an action supported by the Fund, the recipients and subcontractors involved
in an action shall not be subject to control by a non-associated third country or by a non-
associated third-country entity.
Application
Applying for funding requires the creation of a consortium consisting of at least three Member States
or associated countries (currently only Norway). Calls for disruptive technologies allow smaller
consortia (at least two entities from two Member States or associated countries).
Recipients and subcontractors must be EU-based, with their executive management structure in the EU.
They should not be controlled by a non-associated third country, with exceptions possible through
approved guarantees. Entities from non-associated third countries can participate, but under conditions
ensuring the EU security and defence interests, without receiving EDF funding.
Applicants submit proposals via the EU Funding & Tenders Portal, using available templates.
European Defence Investment Programme (EDIP)
Regulation
Proposal for a regulation of the European Parliament and of the Council establishing the European
Defence Industry Programme and a framework of measures to ensure the timely availability and supply
of defence products (EDIP) (2024)
Period
2025 – 2027
Impact assessment
99
An Impact Assessment could not be prepared due to urgency. However, SWD C(2024) 4822
accompanying the proposed regulation provides additional information concerning the proposal’s
underlying rationale, sets out the problems and their drivers, identifies and evaluates the main options
available to address the challenges: link.
Mid-term evaluation
Not applicable.
Budget
EUR 1.5 billion.
Focus
In March 2024, the European Commission has issued a proposal for a Regulation establishing the
European Defence Investment Programme (EDIP) and a framework of measures to ensure the timely
availability and supply of defence products. EDIP’s aim is to start implementing concrete measures
identified in the 2024 European Defence Industrial Strategy (EDIS).
EDIP looks to: provide financial support with EUR 1.5 billion from the EU budget over the period
2025-2027; strengthen the competitiveness and responsiveness of the European Defence Technology
Industrial Base; ensure the availability and supply of defence products; promote cooperation with
Ukraine on the recovery, reconstruction and modernisation of its defence industry. EDIP may also
include the establishment of a Fund for the acceleration of defence supply chain transformation
(‘FAST’). FAST would leverage, de-risk and speed-up investments needed to increase the defence
manufacturing capacities of EU-based SMEs and small mid-caps, in the form of a blending operation
offering support in the form of debt and/or equity.
Delivery mode
EDIP shall be implemented in direct management by the European Commission and in indirect
management (especially for FAST, building inter alia on the experience of the defence equity facility,
established in the context of the European Defence Fund as an InvestEU blending operation).
Predecessor
EDIP aims to bridge the gap after the ending of the short-term emergency measures such as ASAP and
EDIRPA and ensure the EU’s defence industrial readiness for the future. ASAP, adopted by co-
legislators in July 2023, will end on 30 June 2025. EDIRPA, adopted by co-legislators in October 2023,
will end on 31 December 2025.
Type of recipients
Potential applicants are: national procurement authorities, the European Defence Agency or an
international organisation designated to conduct a common procurement (for the follow up to EDIRPA);
Producers of ammunition and missiles in the EU, as well as their supply chain (for the follow up to
ASAP).
Forms of EU support
Grants, prizes, procurement, and financial instruments within blending operations.
Third countries associated to the programme
The Fund shall be open to the participation of members of the European Free Trade Association which
are members of the EEA.
Application
100
Calls for proposals will be published on the EU Funding and Tenders Portal. Applicants must submit
their proposals electronically via the portal, following the specific guidelines and templates provided
for each call.
EU Defence Industry Reinforcement Through Common Procurement Act (EDIRPA)
Regulation
Regulation (EU) 2023/2418 of the European Parliament and of the Council of 18 October 2023 on
establishing an instrument for the reinforcement of the European defence industry through common
procurement (EDIRPA)
Legal base: Article 173(3) TFEU of the Treaty on the Functioning of the EU
Period
2021 – 2027, although the fund was set up in 2023 and will last until 2025
Impact assessment
No impact assessment carried out.
Mid-term evaluation
By 31 December 2026, the Commission shall draw up a report evaluating the impact and effectiveness
of the actions taken under the Instrument (the ‘evaluation report’) and shall submit it to the European
Parliament and to the Council.
Budget
Around EUR 300 mln. All funds have been allocated in November 2024, five selected projects are
receiving EUR 60 mln each.
Focus
EDIRPA aims at incentivising Member States to commonly procure defence products for which there
is an urgent and critical need, especially those amplified following the Russian aggression against
Ukraine. EDIRPA also aims at strengthening the European Defence Technological and Industrial Base
(EDTIB) – and by providing predictability - to increase its manufacturing capacity and face the increase
in demand of defence equipment. It will also lead to increased interoperability between the armed forces
of the Member States.
The fund will achieve its goals by will support cooperation of at least three Member States for the
common procurement of most critical and urgent defence products from the EDTIB.
EDIRPA and ASAP are complementary initiatives, on the demand and supply side respectively.
EDIRPA aims at incentivising Member States to commonly procure urgently needed defence
capabilities and products.
Delivery mode
The Instrument shall be implemented under direct management in accordance with the Financial
Regulation. Grants implemented under direct management shall be awarded and managed in accordance
with Title VIII of the Financial Regulation.
Predecessor
101
EDIRPA is a new programme agreed by the co-legislators during the current MFF and in the context of
the Russian aggression against Ukraine. It does not build on previous MFF programmes as support for
common procurement of defence products is a new area for the EU.
Type of recipients
Potential applicants are national procurement authorities, the European Defence Agency or an
international organisation designated to conduct a common procurement.
Forms of EU support
Grants
Third countries associated to the programme
Norway.
The Fund is open to the participation of members of the European Free Trade Association which are
members of the EEA.
Member States can make Ukraine and Moldova a recipient of quantities of the defence products
concerned by the collaborative procurement action.
Application
Calls for proposals are published on the EU Funding and Tenders Portal. Applicants must submit their
proposals electronically via the portal, following the specific guidelines and templates provided for each
call.
Regulation on Supporting Ammunition Production (ASAP)
Regulation
Regulation (EU) 2023/1525 of the European Parliament and of the Council of 20 July 2023 on
supporting ammunition production (ASAP)
Legal base: Article 114 and Article 173(3) of the treaty on the functioning of the EU
Period
2021 – 2027, although the fund was set up in 2023 and will last until 2025
Impact assessment
No impact assessment carried out.
Mid-term evaluation
As per Article 23 of the ASAP regulation, the Commission shall draw up a report evaluating the
implementation of the measures set out in this Regulation and their results, as well as the opportunity
to extend their applicability and provide for their funding, particularly with regard to the evolution of
the security context.
Budget
Around EUR 500 mln. An amount of EUR 30 mln may be allocated to actions under a Ramp-up Fund.
Focus
102
ASAP is part of a larger effort of the European Union to ramp-up production of ammunition production
capacity to 2 million per year by the end of 2025. ASAP in particular focuses on identifying and funding
production facilities in the European Union and EFTA countries for a total of EUR 500 mln. The funds
have already been fully allocated in 2024, according to the following breakdown:
• EUR 124 mln in explosives
• EUR 248 mln in powder
• EUR 90 mln in shells
• EUR 50 mln in missiles
• EUR 2 mln in testing
ASAP constitutes track 3 of the three-track approach of the ammunition plan agreed by the council.
While ASAP constitutes the supply-side part of the intervention, EDIRPA represents the demand-side.
EDIRPA, ASAP and the fourth Work Programme of EDF all work towards the reinforcement of the
European defence technological and industrial base, in the wake of the adoption of the European
Defence Industrial Strategy (EDIS)
Delivery mode
Implemented directly by the Commission (DG DEFIS). Meanwhile, the Ramp-up fund will be
implemented under indirect management in the form of a financial instrument as a blending operation.
Predecessor
As this programme was adopted in 2023 to respond to urgent operational needs originated in 2022, there
is no direct link to the 2014-2020 Multiannual Financial Framework. The ASAP budget resulted from
a partial deployment of the budget of the European Defence Fund (EUR 260 mln) and of the proposed
budget for the European Defence Industry Reinforcement through common Procurement Act (EUR 240
mln), within the 2021-2027 Multiannual Financial Framework.
Type of recipients
Producers of ammunition and missiles in the EU, as well as their supply chain
Forms of EU support
Grants, financial instruments
Third countries associated to the programme
The Fund is open to the participation of members of the European Free Trade Association which are
members of the EEA.
Only entities, whether public or privately owned, which are established and have their executive
management structures in the Union or in associated countries should be eligible for support.
Application
Calls for proposals are published on the EU Funding and Tenders Portal. Applicants must submit their
proposals electronically via the portal, following the specific guidelines and templates provided for each
call.
Infrastructure for Resilience, Interconnectivity and Security by Satellite (IRIS2
)
Regulation
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Regulation (EU) 2023/588 of the European Parliament and of the Council of 15 March 2023
establishing the Union Secure Connectivity Programme for the period 2023-2027
Legal base: Article 189(2) of the Treaty on the functioning of the EU
Period
2021 – 2027, although the programme was established in 2023
Impact assessment
Carried out in 2022: link
Mid-term evaluation
Not yet carried out.
Budget
Around EUR 10.6 bln. This includes EUR 2.4 bln from the EU budget, EUR 685 mln from the European
Space Agency, while the rest will be covered by the private sector.
Focus
The IRIS2 programme focuses on establishing a secure, resilient, and autonomous satellite-based
communication system for the European Union. Its core aim is to provide uninterrupted, high-speed,
and low-latency connectivity for government-authorised users, while also enabling commercial services
that help bridge the digital divide across Europe and beyond.
Horizon Europe, the Neighbourhood, Development and International Cooperation Instrument (NDICI)
and the EU Space Programme (through GOVSATCOM) will all allocate some funds to the programme,
thus contributing to its development.
Delivery mode
The delivery mode combines direct Union implementation (for the governmental infrastructure) and a
public-private partnership through concessions and procurement contracts.
Predecessor
GOVSATCOM, an EU Space Programme initiative focused on providing satellite communication, can
be regarded as a precursor, as it will be complemented by IRIS2
. The programme builds also upon
existing EU space initiatives like Galileo, a satellite navigation system and Copernicus, an Earth
observation programme.
Type of recipients
The contract’s recipient is the SpaceRISE consortium, composed of three European satellite network
operators (SES SA, Eutelsat SA, and Hispasat S.A.). The consortium relies on a Core Team of European
subcontractors from all segments of the satcom ecosystem for the delivery of the scope of the concession
contract (Thales Alenia Space, OHB, Airbus Defence and Space, Telespazio, Deutsche Telekom,
Orange, Hisdesat and Thales SIX).
Forms of EU support
Grants, prizes, procurement, financial instruments within blending operations.
Third countries associated to the programme
There are four categories of countries eligible for participation in the programme:
104
• Members of the European Free Trade Association (EFTA) which are members of the European
Economic Area (EEA)
• Acceding countries, candidate countries and potential candidates
• European Neighbourhood Policy (ENP) countries
Other third countries based on specific agreements.
Application
The call for tender for a Concession Contract for the Implementation of the Union Secure Connectivity
Programme was published in March 2023 on the TED eTendering platform.
A first phase of the procurement procedure for a concession contract to design, develop and operate the
IRIS² took place in March/April 2023. The Commission invited the industry to submit their proposals.
During this phase, eligibility and participation conditions of the tenderers were evaluated.
In May 2023, a second phase started: the selected consortium is asked to submit initial proposals
addressing the scope of the concession contract, in particular in terms of design, cost, schedule and
private sector investment. In order to ensure the security and autonomy of IRIS², the Commission
continuously monitored throughout the procurement process any changes in the structure of
participating companies, so as to ensure that the eligibility and participation conditions were respected.
The third and final phase consisted in the request of a best and final offer. This “optimised best-and-
final offer” (OBAFO) was received in September 2024.
The contract was awarded in October 2024 and in December 2024, the Commission announced the
signature of the concession contract for IRIS².
EU Space Programme
Regulation
Regulation (EU) 2021/696 of the European Parliament and of the Council
Legal base: Article 189(2) of the Treaty on the Functioning of the EU
Period
2021 – 2027
Impact assessment
Carried out in 2018: link
Mid-term evaluation
Carried out in 2024: link
Budget
Around EUR 14.67 bln.
Focus
The EU Space Programme aims at providing:
• state-of-the-art, robust and secure positioning, navigation and timing services
• accurate and reliable Earth Observation data, information and services
• enhanced Space Surveillance and Tracking (SST) capabilities
105
• long-term availability of reliable, secure and cost-effective satellite communications services
• support to an autonomous, secure and cost-efficient capability to access space
• the development of a strong Union space economy
The EU Space programme has been planned in synergy and coherence with Horizon Europe and
InvestEU. Research and development activities are an essential component for the development of the
Programme, covering both upstream and downstream segments
Delivery mode
Implemented mainly through indirect management by the newly established European Union Agency
for the Space Programme (EUSPA) and the European Space Agency (ESA) (as well as some additional
entrusted entities like EUMETSAT). A small part of the budget is implemented through direct
management by the Commission (DG DEFIS).
Predecessor
The EU Space Programme builds on the success of its predecessor programmes (i.e. Copernicus,
EGNOS, Galileo) which will all continue with a greater focus on synergies with other EU policy areas.
GOVSATCOM and Space Situational Awareness are instead new initiatives.
Type of recipients
The EU space industry, manufacturers, businesses and start-ups; scientists and academics; etc.
Forms of EU support
Grants and procurements.
Third countries associated to the programme
Galileo, EGNOS and Copernicus, as well as the sub-components on SWE (space weather events) and
NEO (near-Earth objects), but excluding the SST subcomponent, are open to the participation of:
members of the European Free Trade Association (EFTA) which are members of the European
Economic Area (EEA); acceding countries, candidate countries and potential candidates; European
Neighbourhood Policy (ENP) countries.
Third countries and international organisations may have access to GOVSATCOM and SST services
provided that they conclude an agreement and comply with Art. 43 about classified information in Reg.
(EU) 2021/696.
Application
Calls for proposals are published on the EU Funding and Tenders Portal. Applicants must submit their
proposals electronically via the portal, following the specific guidelines and templates provided for each
call.
EU4Health
Regulation
Regulation (EU) 2021/522 of the European Parliament and of the Council.
Legal base: Article 168 (5) of the Treaty on the functioning of the European Union
Period
106
2021 – 2027
Impact assessment
Carried out in 2018. It is included in the Annex 5 of the SWD(2018) 289 final.
Mid-term evaluation
Not publicly available (planned for fourth quarter 2024)
Budget
The EU4Health programme had an initial EUR 5.3 bln budget for the 2021-27 period, reduced to EUR
4.4 bln following the revision of the 2021-2027 MFF.
Focus
The EU4Health programme is a key instrument for delivering a comprehensive response to the health
needs of EU citizens, reflecting the implementation of priority EU legislative proposals and acts,
flagship initiatives such as the Europe Beating Cancer Plan, preventing non communicable and
communicable diseases, lessons learned from the COVID-19 crisis, the consequences of Russia’s
unjustified and unprovoked war against Ukraine, and previous health programmes. The EU4Health
programme supports health crisis preparedness, health systems, healthcare digitalisation and disease
prevention.
Delivery mode
The programme is implemented in direct and indirect management mode and in synergies and
complementarities with other EU programmes and instruments. The European Health and Digital
Executive Agency implements the part on direct management as delegated by DG Health and Food
Safety and by HERA. The funds under indirect management are disbursed by DG Health and Food
Safety or HERA.
Predecessor
The EU4Health programme if the continuation of its 2014-2020 predecessor: the Third Health
Programme.
Type of recipients
Legal entities, health organisations and NGOs from EU countries, or non-EU countries associated to
the programme. The EU4Health Annual Work Programmes specify the eligible entities for each topic
together with the objectives, scope, activities, expected results and impact. The detailed rules and
requirements to apply for the specific topics are specified in the calls.
Forms of EU support
Grants, prizes and procurements.
Third countries associated to the programme
Norway, Iceland, Ukraine, Moldova, Montenegro and Bosnia and Herzegovina are associated to the
EU4Health Programme.
Application
HaDEA manages funding through action and operating grants (via open calls), direct grants to
designated entities (e.g. European Reference Networks), joint actions with national health authorities,
107
and procurement via open or framework contracts. Each EU4Health Annual Work Programme outlines
eligible entities, objectives, and detailed requirements for applications. Calls for proposals are published
on the Funding & Tenders Portal, based on the annual work programme set by the European
Commission. Applicants must submit their proposals electronically via the portal, following the specific
guidelines and templates provided for each call.
SME Pillar of the Single Market Programme
Regulation
Regulation (EU) 2021/690 of the European Parliament and of the Council of 28 April 2021 establishing
a programme for the internal market, competitiveness of enterprises, including small and medium-sized
enterprises, the area of plants, animals, food and feed, and European statistics (single market
programme) and repealing Regulations (EU) No 99/2013, (EU) No 1287/2013, (EU) No 254/2014 and
(EU) No 652/2014 (OJ L 153, 3.5.2021, p. 1).
Period
2021 – 2027
Impact assessment
Carried out in 2018: link
Mid-term evaluation
Supporting study assessing the programme’s performance over 2021-2023 has been reviewed, despite
not publicly available yet (planned for 2025)
Budget
An indicative amount of EUR 1 billion is allocated by the SMP Regulation to Pillar 2, relates to
strengthening the competitiveness and sustainability of SMEs. The overall budget allocated to the SMP
amounted to EUR 4.2 billion over the period of 2021-2027.
Link with other programmes
None
Focus
The Single Market Programme (SMP) is implemented in six pillars, the second of which (Pillar 2)
relates to strengthening the competitiveness and sustainability of SMEs. The overall programme aims
to improve the functioning of the internal market and helps protect and empower citizens, consumers
and businesses by designing, implementing and enforcing EU legislation underpinning the proper
functioning of the single market.
Delivery mode
The European Innovation Council and SMEs Executive Agency (EISMEA) is entrusted with the
management and implementation of the vast majority of the SME Pillar’s activities. Overall, the SMP
is mainly implemented under direct management, in particular, but not exclusively, using grants and
procurement. The participating directorates-general are DG Internal Market, Industry, Entrepreneurship
and SMEs, DG Competition, DG Financial Stability, Financial Services and Capital Markets Union,
108
DG Taxation and Customs Union, DG Health and Food Safety, DG Justice and Consumers and
Eurostat. The programme is coordinated in accordance with the memorandum of understanding signed
by the seven participating DGs, with the support of a coordination team based in DG Internal Market,
Industry, Entrepreneurship and SMEs.
Predecessor
The SMP brings together six predecessor programmes from various policy areas. The main components
of Pillar 2, especially its flagship initiatives build on earlier actions implemented for many years under
the predecessor programmes COSME (2014-2020) and partly the Entrepreneurship and Innovation
Programme (EIP) (2007-2013). Drawing from the lessons of the impact assessment, this integrated set-
up is expected to constitute a more flexible and agile financing framework, which will allow the
exploitation of synergies, the prevention of duplication and fragmentation, and prioritisation to be
improved across all 14 industrial ecosystems. An important change in the support provided to SMEs
with the introduction of the SMP is the establishment of multiannual initiatives to provide medium-
term continuity to flagship initiatives that had already demonstrated their impact upon SMEs, such as
the Enterprise Europe Network, actions for clusters and Erasmus for young entrepreneurs. In addition,
the financial instruments for SMEs that were previously included in the COSME programme are now
part of the InvestEU framework.
Type of recipients
SMEs, clusters, business network organisations, and business support organisations.
Forms of EU support
Grants, prizes, procurements, advisory.
Third countries associated to the programme
Iceland, Norway and Liechtenstein
Application
Calls for proposals for actions supporting EU businesses under the Single Market Programme are
advertised on the website of the European Innovation Council and SMEs Executive Agency and
published on the European Commission’s Funding and tender portal. Applicants can submit their
proposals electronically through the Funding and tender portal. Information including the legislation
and rules for participation, templates for proposals, evaluations and project reporting can be accessed
on the Funding and tender portal.
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Annex 9: Overview of the current time to inform and time to grant per programme
Programme Relate
d MFF
Reference
period
TTI
(Number of
days)
TTI target
(Number of
days)
Source
Horizon 14-20 14-20 112 153 Ex-post evaluation of Horizon 2020
Horizon 21-27 21-24 130
(range: 108
Pillar II to 148
Pillar III w/o
EIC)
153 Interim evaluation of Horizon Europe
Digital Europe 21-27 2023 110** 183 HaDEA - Annual Activity Report 2023
Innovation Fund 21-27 2021 132 183 CINEA - Annual Activity Report 2023
Innovation Fund 21-27 2022 122 183 CINEA - Annual Activity Report 2023
Innovation Fund 21-27 2023 113 183 CINEA - Annual Activity Report 2023
LIFE 21-27 2021 94 183 CINEA - Annual Activity Report 2023
LIFE 21-27 2022 146 183 CINEA - Annual Activity Report 2023
LIFE 21-27 2023 144 183 CINEA - Annual Activity Report 2023
CEF 14-20 2016 141 183 Mid-term evaluation of CEF 2014-20
(2018)
CEF – Transport
+Energy
21-27 2021 116 183 CINEA - Annual Activity Report 2023
CEF – Transport
+Energy
21-27 2022 134 183 CINEA - Annual Activity Report 2023
CEF – Transport
+Energy
21-27 2023 150 183 CINEA - Annual Activity Report 2023
CEF – Digital 21-27 2023 110** 183 HaDEA - Annual Activity Report 2023
EU4Health 21-27 2023 110** 183 HaDEA - Annual Activity Report 2023
SMP – SME
Pillar
21-27 21-23 86 183 Mid-term evaluation SME pillar of SMP
COSME 14-20 14-20 115 183 Mid-term evaluation SME pillar of SMP
Programme Related
MFF
Referen
ce
period
TTG
(Number of
days)
TTG target
(Number of
days)
Source
FP7 07-13 07-13 313 270 Ex post evaluation H2020 (2024)
Horizon 2020 14-20 14-20 187 245 Ex post evaluation H2020 (2024)
Horizon Europe 21-27 21-24 240195 245 Interim evaluation of Horizon Europe
195
According to the Horizon Europe Interim Evaluation, the average TTG in Horizon Europe is currently 240 days,
with 77% of grants signed on time. The annual TTG figures for Horizon Europe over the last three years show a
progressive improvement: 135 days in 2021 (for 18 grants), 249 days in 2022 (4 092 grants), 239 days in 2023 (3
641 grants), and 229 days in 2024 (3 122 grants).
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Programme Related
MFF
Referen
ce
period
TTG
(Number of
days)
TTG target
(Number of
days)
Source
Horizon Europe 21-27 2021 135 245 Interim evaluation of Horizon Europe
Horizon Europe 21-27 2022 249 245 Interim evaluation of Horizon Europe
Horizon Europe 21-27 2023 239 245 Interim evaluation of Horizon Europe
Horizon Europe 21-27 2024 229 245 Interim evaluation of Horizon Europe
Digital Europe 21-27 2023 229** 274 HaDEA - Annual Activity Report 2023
Innovation Fund 21-27 2021 268 274 CINEA - Annual Activity Report 2023
Innovation Fund 21-27 2022 270 274 CINEA - Annual Activity Report 2023
Innovation Fund 21-27 2023 263 274 CINEA - Annual Activity Report 2023
LIFE 21-27 2021 237 274 CINEA - Annual Activity Report 2023
LIFE 21-27 2022 212 274 CINEA - Annual Activity Report 2023
LIFE 21-27 2023 242 274 CINEA - Annual Activity Report 2023
CEF 14-20 2016 249 274 Mid-term evaluation of CEF 14-20
CEF – Transport
+Energy
21-27 2021 234 274 CINEA - Annual Activity Report 2023
CEF – Transport
+Energy
21-27 2022 257 274 CINEA - Annual Activity Report 2023
CEF – Transport
+Energy
21-27 2023 259 274 CINEA - Annual Activity Report 2023
CEF – Digital 21-27 2023 229** 274 HaDEA - Annual Activity Report 2023
EDF 21-27 2021 342 274 DG DEFIS - Annual Activity Report
2022
EDF 21-27 2022 354 274 DG DEFIS - Annual Activity Report
2023
EDF 21-27 2023 374 274 DG DEFIS - Annual Activity Report
2023
EU4Health 21-27 2023 229** 274 HaDEA - Annual Activity Report 2023
SMP – SME Pillar 21-27 21-23 218 274 Mid-term evaluation SME pillar of SMP
COSME 14-20 14-20 226 274 Mid-term evaluation SME pillar of SMP
Programme Related MFF Reference
period
Success
rate
(%)
Source
Horizon 2020 14-20 Total 12 Ex post evaluation of Horizon 2020
Horizon Europe 21-27 Total 16 Interim evaluation of Horizon Europe
Digital Europe 21-27 2023 66 HaDEA - Annual Activity Report 2023
Digital Europe 21-27 2022 72 HaDEA - Annual Activity Report 2023
CEF 14-20 Total 51 Mid-term evaluation of CEF 14-20
111
CEF-Energy 14-20 Total 64 Mid-term evaluation of CEF 14-20
CEF-Digital 21-27 2023 76 HaDEA - Annual Activity Report 2023
CEF-Digital 21-27 2022 78 HaDEA - Annual Activity Report 2023
EU4Health 21-27 2023 57 HaDEA - Annual Activity Report 2023
EU4Health 21-27 2022 75 HaDEA - Annual Activity Report 2023