MEPs back new fund to boost Europe’s competitiveness

European Competitiveness Fund to pool 14 existing EU funding instruments

MEPs raise the overall budget and the InvestEU guarantee ceiling

New dedicated mechanisms to support R&D, housing, defence

On Tuesday, Industry Committee MEPs proposed to reshape the European Competitiveness Fund’s scope, governance and budget, with a focus on industrial and security dimensions.

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

Renamed and restructured policy windows

The ECF consolidates 14 existing EU funding instruments, into four policy windows. In their amendments, committee MEPs want to rename three of them, putting an emphasis on the industrial and economic security dimension of competitiveness. They advocate for a dedicated budget envelope and governance structure for critical raw materials, and for a section dedicated to energy infrastructure.

They propose to increase the overall ECF budget to a €264.35 billion in current prices (from €234.3 in the Commission proposal), with detailed binding minimum allocations per policy window and sub-sections. MEPs suggest introducing a new €10.11 billion flexibility reserve, to allow the Fund respond to unforeseen challenges.

Defence research and innovation

Industry Committee MEPs advocate a specific programme for defence research, development and innovation. They suggest to focus it into three distinct instruments: an agile, upstream defence research programme, a blended-finance instrument for defence start-ups and scale-ups developing disruptive technologies, and an instrument to fund collaborative applied research tied to capability priorities.

MEPs propose a clear definition of the notion of “competitiveness”, centered around the ability of European companies to compete successfully in global markets. They also add definitions of the key concepts of strategic dependencies and resilience.

The committee also propose to replace the Commission’s single “Strategic Stakeholders Board” with several new, independent governance bodies. The text also advocates to create “Horizon Europe Pathway actions”, a dedicated mechanism to translate Horizon Europe research results into market deployment.

Housing, energy communities and social investment

They propose a new article, dealing with the ECF InvestEU Instrument, providing support for sustainable construction and clean tech manufacturing for housing, energy-efficient building renovation, renewable and citizen energy communities, and social investments. Maximum guarantee of this instrument should stand at €150 billion (The Commission proposed to make it €70 billion).

Quotes

“Our position contains significant improvements to the Commission’s proposal, which lacked a functioning governance and political directionality. We supplement a definition of competitiveness grounded in economic realities and propose a governance structure grounded in expertise and enhanced coordination with Member States. Parliament also proposes to reform the link between Horizon Europe and the ECF. Lastly, the restructuring of the policy windows in the compromise clarifies the cost of opportunity. A budget that is so opaque it allows the financing of anything and everything sounds nice in theory but has practical consequences: a Euro spent on one priority cannot be spent on another. Through a flexibility reserve of €10bn, we make flexibility visible and feasible in a modernised budget” said co-rapporteur Christian Ehler (EPP, Germany).

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

“We are also giving the Fund the means to match its ambition: a larger budget, a stronger InvestEU guarantee, a dedicated envelope for critical raw materials and a direct path from European research to European factories. This is how we rebuild our industrial base, reduce our strategic dependencies and ensure the technologies of tomorrow, from clean tech to defence, are made in Europe," he added.

Next steps

MEPs also voted to open negotiations with EU governments by 56 votes to 26, and with four abstentions. The committee position and the mandate for negotiations are expected to be announced for approval at 23-26 November plenary sessions.

Background

The legislation is part of the EU’s 2028–2034 long-term budget (MFF) package. Parliament wants the budget to remain a strong investment tool that supports citizens, regions and businesses, while delivering clear added value beyond national budgets. MEPs propose increasing the size of the draft budget to meet new challenges and they insist on the importance of new revenue sources to fund an ambitious and sustainable budget.