Summer Guide to the Future of European ERA and EEA Policy – ECF
Discover how negotiations on the next Multiannual Financial Framework and the EU's key research and education programmes have evolved over the past year.
In the next instalment of our summer series, we focus on the European Competitiveness Fund (ECF), which is set to cover a significant proportion of European investment in strategic technologies, industry, digitalisation, the green transition, health, security, defence and space during the period 2028–2034.
The ECF is one of the most significant new features of the next Multiannual financial framework (MFF). Its aim is to link European support from applied research and innovation, through the scaling-up of production, to the industrial deployment of technologies and their market application.
Whilst the European Commission’s proposal established the Fund’s basic structure, the Council of the EU and the European Parliament are now presenting their own views on how the ECF should be managed, who should set its priorities, and how closely it should be linked to the future framework programme for research and innovation, Horizon Europe 2028–2034 (FP10).
One Fund instead of several current programmes
The ECF is intended to merge or take over the activities of several existing European programmes and instruments. These include, for example, the Digital Europe Programme, LIFE and EU4Health. The regulation is also set to include a specific programme for defence research and innovation.
The Fund is intended to provide support across the entire “investment pathway”. Funding is therefore not intended to stop at a research result or prototype, but to continue through testing, scaling up production and industrial deployment, right up to the market launch of the technology or product. In this context, the Council of the EU emphasises that the individual phases are not linear and that European support must be able to adapt to the differing needs of projects.
The main objective is to eliminate the fragmentation of European funding and create a clearer system with harmonised rules for businesses and other beneficiaries. The ECF is to make use not only of grants, but also of loans, guarantees, equity investments or a combination of grant support and investment financing.
Four main areas of support
The Commission’s proposal divides the ECF into four policy windows:
- Clean Transition and Industrial Decarbonisation,
- Health, Biotech, Agriculture and Bioeconomy,
- Digital Leadership,
- Resilience and Security, Defence Industry, and Space.
Their final names and content have not yet been definitively established. The European Parliament proposes defining the policy windows in greater detail and, for example, separating the area of critical raw materials from security, defence and space. At the same time, it is advocating a clearer budget structure and, in its report, proposes earmarking 10 billion euro to
support critical raw materials. The Council of the EU is leaving the names and financial allocations of the thematic windows open for the time being, as they form part of the ongoing negotiations on the MFF.
How will the ECF link up with the Horizon Europe programme?
We have already addressed the issue of the link between the European Competitiveness Fund and the future Horizon Europe programme (2028–2034) in our previous article. In short, the Council of the EU and the European Parliament agree on the need for close coordination between the two instruments but differ on how this should be achieved.
The Council advocates closer integration through joint strategic planning and coordination between the relevant committees. The European Parliament, on the other hand, emphasises that Horizon Europe should retain its own governance system based on scientific excellence and independent project evaluation.
Another new feature in the European Parliament’s proposal is the Horizon Europe Pathway Actions, which aim to support the further exploitation of research results funded under the Horizon Europe programme and previous framework programmes. Support could include, for example, the commercialisation of research results, licensing, standardisation or their market introduction.
The European Parliament also proposes the introduction of a new “Competitiveness Seal”, which could be awarded to high-quality projects contributing to the ECF’s objectives but which do not receive funding, for example due to budget constraints. The Seal is intended to facilitate access to further sources of funding whilst confirming that the project has successfully passed the European evaluation process.
Member States or independent experts?
A significant difference concerns the overall management of the Fund. The Council of the EU supports the creation of a ECF General Committee, in which Member States will be represented. The Committee would provide recommendations on strategic direction, the needs of small and medium-sized enterprises, and the preparation of Work Programmes. The Council also proposes a ECF Stakeholders’ Board and at least one platform for each policy window, through which representatives from industry, research, investors, social partners or civil society could submit their proposals.
The European Parliament, on the other hand, proposes strengthening independent expert advice and increasing stakeholder involvement in the management of the Fund. It wishes to establish an Economic and Technological Advisory Council comprising a maximum of fifteen experts in economics, innovation and technological development. This Advisory Council would prepare an annual analysis of the state of European competitiveness and issue recommendations for the implementation of the ECF. It should be independent of the European Commission and should not interfere in the areas of security and defence. Practical input for the preparation of calls for proposals would then be provided by a separate Stakeholder Group.
As with the debates on the future Horizon Europe programme, two approaches are thus at odds. The Council advocates a stronger role for Member States, whilst the European Parliament places greater emphasis on independent expert governance.
Work programmes: implementing acts or delegated acts?
This difference is also reflected in the way Work Programmes are approved. The Council of the EU supports the standard comitology procedure, which allows Member States, through their representatives on Committees, to influence the content ofWwork Programmes even before they are adopted by the European Commission.
The European Parliament, by contrast, proposes adopting a significant proportion of the Work Programmes through Delegated Acts. Both the Parliament and the Council would thus be able to scrutinise the Commission’s proposals, raise objections to them, or withdraw the Commission’s power to adopt such acts.
This is not merely a technical legal issue. The final solution will determine whether Member States or the European Parliament will have greater ongoing influence over the shape of the Work Programmes.
Grants, guarantees and private investment
Both institutions agree that the ECF should not be merely a grant programme. Its aim is to make greater use of financial instruments which, through the European budget, will reduce the risk of strategic investments and attract further private capital.
The ECF InvestEU Instrument is expected to play a key role in this regard. It is designed to utilise the EU budget guarantee – a mechanism whereby the European Union assumes part of the investment risk – in order to facilitate the financing of strategic projects and encourage private investors to make larger investments. Both the Council of the EU and the European Parliament recognise the significant role of this instrument; the latter is also advocating for its further strengthening and closer integration with the various policy windows.
Both the Council of the EU and the European Parliament also envisage close links with the European Innovation Council (EIC). Whilst the EIC is intended to support the emergence of breakthrough innovations and the development of early-stage deep-tech start-ups, the ECF should, through the ECF InvestEU Instrument, support their further growth. Funding could be directed, for example, towards expanding production, entering new markets or the commercialisation of technologies.
Skills as a component of European competitiveness
Both the Council of the EU and the European Parliament agree that strengthening Europe’s competitiveness depends not only on investment in research, innovation and technology, but also on the development of skills and talent. The ECF should therefore support not only strategic investment but also the development of human capital. The aim is not only to develop new skills but also to attract and retain the talent needed for strategic sectors of the European economy.
The Council of the EU proposes that the Fund should contribute to the implementation of the Union of Skills initiative through lifelong learning, reskilling, vocational training and apprenticeships. Support could be provided for cooperation between universities, vocational education providers, research and technology organisations, businesses and social partners. It also explicitly mentions the European Universities alliances, in particular its activities focused on innovation, skills development and attracting talent. The European Parliament, too, emphasises the importance of investment in education, lifelong learning and talent development as a prerequisite for strengthening European competitiveness.
Will a network of national contact points for the ECF be established alongside Horizon Europe?
The Council of the EU proposes that Member States should be able to designate their own National Contact Points (NCPs) for the European Competitiveness Fund. These would provide support to potential applicants and beneficiaries, for example through consultations, preliminary checks on project proposals or targeted assistance to organisations participating in European programmes for the first time. The NCPs could specialise in individual strategic areas of the ECF and cooperate with other European support networks. Member States would remain responsible for their organisation and funding.
The European Parliament does not devote particular attention to this part of the proposal and does not propose any fundamental changes to it.
If the Council’s proposal were to be retained, Member States would have to decide how to organise and finance support for the ECF. Given that a similar network of National Contact Points is already in place, for example for the Horizon Europe programme, the question arises as to whether they will create a separate network for the ECF or utilise and expand existing support structures.
What happens next?
On 16 June 2026, the Council of the EU adopted a partial general approach to the proposal for the European Competitiveness Fund. However, questions directly linked to the Multiannual financial framework remain unresolved, in particular the Fund’s overall budget, the allocation of resources among the individual policy windows, and certain provisions relating to the ECF InvestEU Instrument.
The European Parliament is currently debating the draft report by ITRE Committee rapporteurs Christian Ehler and Dan Nica. At the same time, it is considering a number of amendments, on the basis of which the committee will prepare its final negotiating position. According to the current timetable, the report is due to be put to a vote on 10 September 2026.
Following the adoption of the report by the ITRE Committee, a vote will take place at the European Parliament’s plenary session, which is provisionally scheduled for 19–22 October 2026. Only then will interinstitutional negotiations (Trilogues) between the European Parliament, the Council of the EU and the European Commission be able to begin, with the aim of reaching a compromise on the future ECF.
As with the future Horizon Europe 2028–2034 programme, the final form of the ECF will depend on further negotiations between the European Parliament, the Council of the EU and the European Commission. The final text of the regulation will only be known once the Trialogues have been concluded and the final compromise has been approved.