European Competitiveness Fund (ECF) – a BusinessEurope position paper

With the European Competitiveness Fund (ECF), the European Commission has created a centralised instrument that aims to help relaunch economic competitiveness and the resilience of European strategic industries within the framework of the next Multiannual Financial Framework (MFF) 2028-2034.

The ECF is designed to provide a package of financial incentives based on 14 existing programs (Innovation Fund, Digital Europe Program, Connecting Europe Facility – for its Digital component, European Defence Fund, European Defence Act in Support of Ammunition Production, Horizon Europe, Industry Reinforcement through the Common Procurement Act, European Defence Industry Program, EU4Health, European Space Program, Iris, InvestEU, Single Market Program – for its SME Strand, and LIFE), articulated across four policy windows:

• The Clean Transition and Industrial Decarbonisation,
• Health, Biotech, Agriculture, and the Bioeconomy,
• Digital Leadership,
• Resilience and Security, the Defence Industry and Space.

The proposed ECF aligns with the calls included in Mario Draghi’s Report to direct more public-private investments towards industrial sectors deemed strategic for the EU’s competitiveness and resilience.

The merging of 14 existing programmes into a single rulebook and a central digital portal offers an opportunity to reduce fragmentation and create a more efficient and strategic funding framework. The proposed framework aims to improve transparency, efficiency, and user-friendliness in the application process, award criteria, disbursement, and tracking. At the same time, it aims to enhance the combinability of funding instruments to support projects throughout the different phases of the investment lifecycle and to assist companies, particularly SMEs, not only through financial support but also through complementary non-financial instruments, such as advisory and capacity-building services.

However, the ECF’s impact on competitiveness will depend on whether these modifications translate into genuinely streamlined and faster procedures in practice.

It is crucial that ECF funding be allocated through open competition, prioritising projects by following the criteria of excellence and highest relevance for European competitiveness. This principle should serve as the cornerstone for all funding decisions. In limited cases, exceptions to this principle may be justified and could be implemented through targeted calls. For example, through capacity building or resilience actions, as well as synergies with cohesion policy, to ensure a minimum degree of geographical balance. Funding under Pillar II of Horizon Europe should be assigned solely according to the principle of excellence.

BusinessEurope strongly welcomes the creation of the ECF and supports many of the elements included in the Commission proposal; however, several aspects remain unclear. As significant information is still missing, it is difficult to provide a comprehensive assessment at this stage.