Competitiveness and innovation strengthening the Horizon Europe and European Competitiveness Fund combination in the MFF – a BusinessEurope position paper

Introduction

Innovation and competitiveness are inherently interconnected; one cannot thrive without the other. BusinessEurope welcomes the proposed structure under the next Multiannual Financial Framework (MFF) for 2028-2034, which closely links Horizon Europe with the European Competitiveness Fund (ECF). This integration represents a significant step forward, providing a promising foundation to link innovation with other means of improving competitiveness.

Equally significant is the stand-alone Horizon Europe (10th Framework Programme for Research and Innovation), with a proposed ring-fenced budget of €154.9 billion in 2025 prices (= 175.3 bn in current prices) — a substantial 73.1% increase compared to its predecessor (article 6 HE). This ambitious proposal reflects a strong political commitment to advancing Europe’s global leadership in innovation. In the context of the ongoing negotiations, there should be no cuts to the budgets for the next Framework Programme for Research and Innovation, and the European Competitiveness Fund. Instead, the total budget of €177 bn in 2025 prices (= 200 bn in current prices) for research and innovation proposed in the Draghi report should be targeted for FP10.

BusinessEurope welcomes that Pillar II of Horizon Europe remains the largest recipient of funds within the programme, with an increase of €22.4 billion (article 6 HE). However, its overall budget share has declined to 43.3% from 56% in the previous framework programme. This underemphasises the importance of transferring knowledge into industrial applications thereby undermining competitiveness and sending the wrong signal. Only by joining forces with industry and research can Europe´s innovation gap be effectively closed. BusinessEurope therefore calls for a reinforced budget for Horizon Europe in order to achieve a corresponding increase of €22.1 bn in 2025 prices (= €25 bn in current prices) in Pillar II and to complement it with money from the ECF. In the R&I context, notwithstanding the fact that the ECF will serve other projects beyond R&I, the four policy windows of the ECF should be complementary, seamless funding instruments of Horizon Europe that reinforce the innovation–deployment continuum, providing targeted support to accelerate the uptake of research results across sectors. It is therefore essential to ensure strong and coherent interconnections between the ECF and Pillar II
of Horizon Europe, particularly in terms of governance, and implementation.

While these proposals are a good foundation for a stronger and more coherent R&I policy, attention must be paid to other key aspects to see whether they can truly deliver a breakthrough for Europe’s research and innovation landscape.