On the proposal for a regulation of the European Parliament and of the Council establishing Horizon Europe, the Framework Programme for Research and… Innovation, for the period 2028-2034 laying down its rules for participation and dissemination, and repealing Regulation (EU) 2021/695

for the Committee on Industry, Research and Energy on the proposal for a regulation of the European Parliament and of the Council establishing Horizon Europe, the Framework Programme for Research and Innovation, for the period 2028-2034 laying down its rules for participation and dissemination, and repealing Regulation (EU) 2021/695

(COM (2025)0543 – C100164/2025 – 2025/0543(COD))

The Committee on Budgets has carried out a budgetary assessment of the proposal under Rule 58 of the Rules of Procedure and has reached the following conclusions:

The Committee on Budgets,

A.whereas the Draghi report identifies research and innovation (R&I) as one of the main drivers behind productivity and people’s well-being, able to generate positive externalities and supporting the EU’s strategic autonomy and social model; whereas the report supports the design of a reformed and simpler programme focused on selected priorities and an increased budget of EUR 200 billion; whereas the Draghi report highlights the insufficient focus on breakthrough innovation in the EU’s current innovation system;

B.whereas the interim evaluation of Horizon Europe confirms its high European added value, relevance and effectiveness; whereas the evaluation highlights the fact that, despite the increase in the average success rate, from 12 % in Horizon 2020 to 16.4 % in Horizon Europe (and from 9 % to 14 % in the widening countries), only 30 % of the high-quality proposals could be financed and an additional EUR 81.8 billion would have been needed to fund them all;

C.whereas the Budapest declaration re-states the importance of dedicating 3 % of GDP to research and development (R&D) by 2030; whereas in the 26 years since the Barcelona declaration, only few Member States have achieved this target; whereas the Horizon Europe programme can support the achievement of that target and leverage additional funds from public and private entities;

D.whereas the Letta report proposes a new ‘5th freedom to enhance research, innovation and education in the single market’, which requires a reinforced and fully operational European Research Area (ERA); whereas the Horizon Europe programme should contribute to the implementation of this additional freedom, including through supporting the mobility of researchers within the ERA;

E.whereas it is important to ensure that the mobilisation of resources and the increase in investment in R&I do not come exclusively from the public sector, which should act as a lever for mobilising private investment, making R&I attractive investment areas for businesses, including small and medium-sized enterprises;

F.whereas persistent disparities in R&I performance continue to limit the EU’s overall competitiveness; whereas strengthened convergence within the ERA is necessary to bridge the innovation divide and unlock untapped excellence across all Member States;

G.whereas the ongoing full-scale war in Ukraine is showcasing the importance of dual-use technologies;

1.Considers that the programme envelope should be increased from EUR 154 billion to EUR 200 billion (or EUR 177 billion in 2025 prices) in order to give European competitiveness the required innovation boost in key sectors, support the EU’s research base and foster new solutions for global societal challenges to ensure adequate levels of funding for all priorities and programme objectives, supporting the objective of dedicating 3 % of GDP to R&D expenditure by 2030;

2.Considers that sufficient human, technical and IT resources must be available from the outset and throughout the entire programming period of the upcoming 2028-2034 multiannual financial framework (MFF) to ensure the effective implementation of the Horizon Europe programme;

3.Points out that R&I are the primary drivers of long-term competitiveness; considers, therefore, that interventions under Heading 2 of the next MFF in general, and Horizon Europe in particular, should focus on – among other things – closing the innovation gap between the EU and global competitors in order to make the EU more competitive, ensuring a smooth transition from high-quality research to marketable solutions, and giving EU businesses the technological edge they need to thrive amid open, global competition;

4.Considers that significant resources should be directed towards security, dual-use and defence-related technologies and R&I projects to strengthen technological sovereignty and resilience; notes that the Commission proposed a specific programme for defence-related research as part of the European Competitiveness Fund; welcomes the fact that Horizon Europe continues to be dedicated to supporting civilian and dual-use research;

5.Points out that the breakdown of the budget in Article 6 includes only 7 indicative amounts at item level compared to 15 in the 2021-2027 period; expresses concerns about the lack of a predictable budget for many actions – in particular within Pillar I and Pillar III – where beneficiaries lack a clear financial envelope; notes, with concern, that this would give the Commission great latitude to shift and decide on spending priorities during implementation without any added value for the researchers, innovators and SMEs that benefit from the programme; recommends fixing indicative sub-envelopes for every pillar and for each sub-programme in the basic act to increase long-term predictability, transparency and democratic accountability;

6.Recognises that the European Institute of Innovation and Technology (EIT) has nurtured several generations of Knowledge and Innovation Communities (KICs), leveraging the strength of the R&I ecosystem in the EU; believes that the EIT should act as an enabler for the success of the KICs by sharing best practice, supporting the administration of public funds and creating cross-KIC added value; calls for the allocation of adequate financial and human resources to the EIT, ensuring that this decentralised agency has sufficient means to fulfil its future mandate and accomplish the tasks entrusted to it;

7.Points out that Horizon Europe should continue to be a fully autonomous, self-standing programme, while ensuring coherence and complementarity with the European Competitiveness Fund through aligned strategic priorities, without prejudice to its own governance, excellence-based evaluation criteria and independent rules; stresses that it is vital, at the same time, for Horizon Europe to continue to be coordinated with all EU programmes that may have a link to innovation and research, whether it be training, health, attracting investment or nurturing the competitive capacity of EU businesses; takes note of the proposed synergies between Horizon Europe and the European Competitiveness Fund; shares the assessment that the two programmes should work closely together to ensure that the EU budget is fit to support European innovators, from basic research to commercialisation; stresses, in this regard, that any cross-contribution between programmes must be duly reflected in the programme performance statement; stresses that enhanced complementarity between programmes must not lead to disproportionate complexity for beneficiaries; calls for EU funding to be clearer, more accessible and more coherent in order to facilitate uptake and maximise the impact of investments;

8.Highlights, with concern, the persistent structural gap in R&I between Member States and calls for strengthened efforts to bridge this gap within the EU;

9.Recognises that flexibility is an important feature of the 2028-2034 MFF architecture as proposed by the Commission; recalls, however, the need to ensure predictable and sufficient annual resources for the Horizon Europe programme, considering the long-term nature of R&I projects; considers that an indicative budgetary allocation for each item of the programme would ensure predictability for final beneficiaries, without depriving the budgetary authority of its prerogatives;

10.Regrets the lack of a sufficiently detailed indicative budgetary nomenclature proposed in the Legislative Financial and Digital Statement (LFDS), which includes only 5 budget lines, compared to 44 in the 2021-2027 period; considers that this will hamper oversight, predictability and the budgetary authority’s ability to accurately steer policy priorities in the annual budgetary procedure; expresses concerns that the overly aggregated budgetary architecture would dramatically facilitate transfers that are not subject to the decision of the budgetary authority; recommends, therefore, a more detailed nomenclature that properly reflects the objectives and structure of the programme and enhances transparency, accountability and parliamentary control; recalls that the budgetary nomenclature must comply with Article 47(2) of the Financial Regulation, which provides that each title must correspond to a policy area and each chapter, as a rule, to a programme or an activity, in line with the principles of specification, sound financial management and transparency; insists that the budgetary nomenclature forms an integral part of Parliament’s negotiating position and must be discussed in interinstitutional negotiations; considers, in this regard, that the revised LFDS must be part of the final political agreement;

11.Insists that sufficiently detailed and sound legislation, with an appropriate level of governance, is a condition for proper budgetary decision-making and adequate parliamentary oversight during budget implementation; considers that a poorly constructed ‘steering mechanism’ cannot compensate for any loss of Parliament’s legislative or budgetary powers and is not appropriate for steering a programme that supports work at the frontiers of science, technology and innovation, particularly given that innovation cycles in some strategic sectors are measured in weeks or months while the steering mechanism is a procedure taking years;

12.Believes that all substantive policy choices, including spending priorities and financial allocations, must be determined in the Horizon Europe basic act with full respect for Parliament’s prerogatives as a co-legislator and one arm of the EU’s budgetary authority; recalls that any non-essential elements entailing policy choices that are not included in the basic act must be adopted through delegated acts, including work programmes;

13.Underlines that the implementation and development of the programme should be transparent while respecting European values and respect for human rights and international law, backed by democratic institutions;

14.Recalls that the proposal includes the possibility of using a budgetary guarantee; stresses that the budgetary implications of borrowing and lending operations under the Horizon Europe framework programme must be clearly identified, transparently presented and carefully monitored throughout the MFF period; insists that all decisions related to such operations must fully respect the powers of the co-legislators and the prerogatives of the budgetary authority; underlines that such instruments should be used strategically to maximise the impact, efficiency and sustainability of EU funding, while ensuring full transparency, sound risk management and respect for the prerogatives of the budgetary authority; recalls that the EU’s financial interests should be safeguarded by, among other measures, guaranteeing full access to auditable data, investigatory rights for the European Anti-Fraud Office and the European Public Prosecutor’s Office, and audit rights for the European Court of Auditors;

15.Highlights that the European Innovation Council (EIC), in particular through the EIC Fund including the Scaleup Europe Fund, serves the objective of supporting European deep-tech start-ups and scale-ups that deliver long-term strategic value for the EU, in line with the objectives of the Draghi report; recalls that the EIC is a one-of-a-kind instrument, which brings together funding from the EU budget and private investors to enable companies to access significant capital at the start-up, growth and scale-up stages; strongly calls for the Scaleup Europe Fund to continue its mission within the EIC in the next MFF; stresses that safeguards need to be in place to ensure sound budgetary control and to avoid reputational damage to the EU budget; in this context, notes that, given the EIC’s unique nature and its need to operate in a fast-moving global venture capital market where significant capital losses are inevitable, targeted exemptions from the Financial Regulation could be provided where needed, in coordination with the Committee on Budgets and the Committee on Budgetary Control; underlines that these exemptions have to be thoroughly justified and should not undermine the prerogatives of the Parliament as budgetary authority; recalls the importance of investing in European strategic sectors, including artificial intelligence, quantum technologies, dual-use, defence and clean technologies in order to boost competitiveness and European strategic autonomy;

16.Stresses the need to support scale-ups and assist European start-ups in navigating the ‘valley of death,’ where a lack of commercialisation often leads to failure or relocation outside the EU; stresses that Horizon Europe should place R&I at the heart of the EU’s economy and investment strategy, while the European Competitiveness Fund should focus on accelerated development, implementation, and industrial competitiveness and turning Europe’s strongest R&I into scale-up and deployment on a European scale;

17.Recalls that Horizon Europe should incorporate both an ‘open’ (bottom-up) and a ‘public policy’ (top-down)-driven approach, in close coordination and synergy with the European Competitiveness Fund and its policy windows, particularly in dual-use technologies that could be scaled up within the ECF framework; highlights that such synergy and focus on efficiency and effectiveness are indispensable to comply with the principle of sound financial management;

18.Recalls that administrative procedures must be simplified for all applicants, in particular for smaller or medium-scale projects, in order to ensure better participation of SMEs and start-ups, including reduced application burdens and faster grant disbursement; stresses, in this regard, that the programme should facilitate the participation of all types of stakeholders, especially newcomers, SMEs, innovative start-ups and scale-ups, academia, and new target groups, in particular through the National Contact Points, which must interact with relevant support structures under other EU programmes;

19.Stresses that the use of external assigned revenue under the Horizon Europe programme must be fully transparent and subject to effective parliamentary scrutiny; takes note, in this regard, of the provisions relating to financial contributions by any participating third country and other donors; underlines that, should the lead committee consider amending provisions relating to external assigned revenue, this should be done in coordination with the Committee on Budgets and the other committees to ensure a consistent approach;

20.Recalls the proposal for a regulation on establishing a budget expenditure tracking and performance framework and other horizontal rules for EU programmes and activities (the ‘performance regulation’), which establishes a single streamlined list for performance indicators and monitoring and evaluation provisions, some of which are relevant for the Horizon Europe programme; recalls that the application of horizontal principles should, where feasible and appropriate, be in accordance with sector-specific rules, as provided for in the recast of the Financial Regulation, in order to ensure that they are applied in a manner that duly takes into account the specificities of sectoral programmes; underlines that any change in the architecture, objectives and eligible actions under the programme will need to be appropriately reflected in the relevant provisions and in Annex I of the performance regulation, as part of the process of amending and negotiating that regulation; points out that, while sectoral legislation can supplement the performance regulation, for instance as regards programme evaluations, it should remain consistent with the provisions of that regulation;

21. Considers that research decommitments should be fully re-used to help strengthen the EU’s research capacity, without artificially capping the amounts, which the Financial Regulation does not provide for; considers also that reflows from financial instruments should stay available within the Horizon Europe programme.

As part of its budgetary assessment, the Committee on Budgets also submits the following amendments to the draft proposal.

Amendment 1

Proposal for a regulation

Recital 34

Amendment 2

Proposal for a regulation

Recital 36 a (new)

Amendment 3

Proposal for a regulation

Recital 37 b (new)

Amendment 4

Proposal for a regulation

Recital 37 c (new)

Amendment 5

Proposal for a regulation

Recital 38 a (new)

Amendment 6

Proposal for a regulation

Article 6 – paragraph 1

Amendment 7

Proposal for a regulation

Article 7 – paragraph 2 a (new)

Amendment 8

Proposal for a regulation

Article 7 – paragraph 2 b (new)

Amendment 9

Proposal for a regulation

Article 10 – paragraph 3

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur for budgetary assessment declares that he included in his budgetary assessment input on matters pertaining to the subject of the file that he received, in the preparation of the budgetary assessment, prior to the adoption thereof in committee, from the following interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register, or from the following representatives of public authorities of third countries, including their diplomatic missions and embassies:

The list above is drawn up under the exclusive responsibility of the rapporteur.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur declares that he submitted to the natural persons concerned the European Parliament’s Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.