Richer EU states gain upper hand in €400bn competitiveness fund battle

The document, prepared by Cyprus as holder of the rotating EU presidency, places a “commitment to excellence” at the core of the fund, the EU’s post-2027 long-term budget, or Multiannual Financial Framework (MFF), designed to revive the bloc’s slowing economy.

The language marks a win for richer capitals such as Germany and France, which have pushed for funding to be awarded primarily on merit-based criteria. Poorer states have argued that allocation should also reflect geographical balance, warning that a strict excellence test would favour countries with stronger innovation ecosystems and deeper institutional capacity.

“With the commitment to excellence at its centre, ECF will ensure equal opportunities to access funding, enhance business development, strengthen collaboration and capacity building to unlock the innovation potential across the EU,” the paper says. EU ambassadors are due to discuss the proposal in Brussels on Friday.

The emphasis on excellence is reinforced elsewhere in the text. The draft says the principle should also apply “across all pillars of Horizon Europe,” the EU’s flagship research programme, in wording highlighted in bold alongside a clause stating that Horizon will be “guided by the principle of excellence.”

The issue has become one of the most contentious in negotiations over the next seven-year EU budget.

In a non-paper circulated earlier this year, a group of wealthier countries including Germany, France and Spain argued that ECF money should be awarded “based on criteria that ensure that only the best projects are funded in terms of their quality and impact.”

By contrast, a rival paper from poorer countries including Bulgaria, Romania and Poland called for the fund to promote “geographical balance” and the “inclusive participation of member states in strategic industrial value chains.”

The Cyprus text also underlines that cohesion policy, long the main redistributive arm of the EU budget, but set to be scaled back under the next MFF, remains responsible for supporting “overall competitiveness” and “resilient regional economies.”

(cz)