Berlin: The European Competitiveness Fund reaches its first parliamentary test on 10 November, when the Industry, Research and Energy Committee is expected to approve compromise amendments to the regulation that creates it. Rapporteurs and shadow rapporteurs agreed the text on 22 October, according to Agence Europe. Parliament wants the fund set at 264 billion euros for 2028 to 2034.

Co-rapporteur Christian Ehler, a German member of the centre-right EPP group, has criticised proposals from the Irish presidency of the Council that would cut the fund’s size in the next multiannual financial framework. He described those cuts as disproportionate. The figure of 264 billion euros for the European Competitiveness Fund therefore doubles as an opening bid in the wider budget negotiation, which Council aims to close by the end of 2026.

The compromise also draws a line around research money. It removes the programming of the second pillar of Horizon Europe from the European Competitiveness Fund. Parliament says it will not accept an arrangement that places research and innovation under top-down industrial policy. That position protects the independence of the research programme, but it also limits how far the Commission can steer funds toward its industrial priorities.

Governance receives equal attention. The text adds a proposal for priority-setting mechanisms, so that elected representatives take part in deciding where the money goes. Parliament refuses to grant the Commission seamless and frictionless flexibility over the budget, and offers a flexibility reserve instead. The reserve would let the Commission react to shocks without giving it a blank cheque.

On awards, excellence remains the main criterion, yet the text warns against excessive geographic concentration. That wording speaks to smaller member states, which fear that large economies with deep research systems will absorb most of the European Competitiveness Fund. Technology neutrality lets any solution that contributes to net greenhouse gas reductions compete for support, while a targeted Union preference applies to projects in the essential interest of security, economic security or resilience.

The rules on third countries could prove the most sensitive. Countries in the European Economic Area, candidate countries including Ukraine and Moldova, neighbourhood partners and even the United States could associate to the fund if they meet the conditions. Association would need votes in Council and Parliament, much like a trade agreement. A supply rule would also bar equipment or components from a single third country that provides more than half of EU supply of the product.

After the committee vote, the file moves toward plenary and then toward talks with the Council. The European Competitiveness Fund will only deliver on its promise if the three institutions agree on size, governance and openness before the next budget period begins in 2028.