Amendments to the Competitiveness Fund and Horizon Europe

This paper offers amendments to the legislative proposals for a European Competitiveness Fund (ECF) and revised Horizon Europe programme (HEU). The recommendations reflect DIGITALEUROPE’s design principles for the next Multiannual Financial Framework (MFF).

Prioritise critical technologies across all four funding windows 

What to change: Critical technologies like AI, connectivity and semiconductors should receive funding from all ECF windows, not exclusively through the “Digital Leadership” window. At least 25 per cent of the overall EU budget should be dedicated to the development and deployment of critical technologies. 

• Article 3 ECF: Add language to ensure all funding windows support the development and deployment of critical technologies. 

• Article 6 HEU: Rebalance Horizon Europe funding towards Pillar II to support commercialisation of research outputs, especially in the Digital Leadership and Security funding windows. 

Why it matters: EU funding is limited and must focus on areas with the greatest impact. This means prioritising digital and critical technologies essential to Europe’s security, sustainability and competitiveness. 

Strengthen support for commercialisation and deployment 

What to change: Funding should be allocated across all Technology Readiness Levels (TRLs), from early research to industrial scaling and market uptake. 

• Article 39 ECF – Within the digital leadership window, explicitly include the requirement to build a coherent, end-to-end innovation pipeline from early research to industrial deployment. To this end, the ECF and Horizon need to be closely aligned to ensure funding is available across all TRLs, to reinforce public-private partnerships, and to strengthen support for industry-led collaborative projects in critical technologies. 

• Article 11 HEU: Preserve attractive conditions for public-private partnerships, by taking in-kind contributions into account. 

Why it matters: Fragmented programmes and funding cliffs faced by innovators prevent ideas from reaching the market and European companies from competing globally. 

Simplify and align rules across ECF and Horizon Europe 

What to change: Create a true one-stop-shop for EU funding, with a single rulebook across Competitiveness Fund and Horizon, harmonised eligibility criteria, faster procedures and greater predictability for applicants. 

• Article 6 and 7 ECF: Clarify the alignment of funding instruments, including with other relevant funding offers led by actors like the European Investment Bank Group. 

• Article 10 and 26 HEU: Limit the use of lump sums, which reduce funding flexibility, and be more ambitious about the time from application to funding decision by setting it at three months. 

Why it matters: Complex and fragmented rules discourage applicants, especially SMEs, waste resources and delay investments. 

Take a balanced and proportionate approach to EU preference 

What to change: EU preference rules should be risk-based, proportionate and clearly defined, avoiding the introduction of vague and potentially wide-ranging restrictions that undermine innovation and competitiveness. 

• Article 10 ECF: Clarify the requirements of EU preference and specify the conditions for their use. 

• Article 20 HEU: Align the rules for Pillar II with a merit-based, open and collaborative approach. 

Why it matters: Overly restrictive or unclear EU preference conditions deter private investment, reduce participation in collaborative research and weaken Europe’s global competitiveness. 

Strengthen governance and industry involvement 

What to change: Ensure meaningful industry participation in governance structures and the design of work programmes. 

• Article 14 ECF: Specify the governance structures to ensure strong representation of strategic technology leaders, scaleups and industry associations in the Strategic Stakeholders Board. 

Why it matters: Industry expertise is essential to identify market failures, guide strategic investments and ensure funding delivers real economic impact. A more flexible funding approach requires better involvement of recipients to identify real market needs and respond to opportunities in an agile manner 

DIGITALEUROPE has identified projects ready for investment. Our AI & Tech Declaration outlines investment projects across critical sectors to boost the rapid development and deployment of digital infrastructure. The Copenhagen project4 explains funding needs for resilience, defence, dual-use and security-relevant technologies, highlighting the need to support rapid deployment, scaling of industrial capacity and cross-border implementation of such initiatives.