On the proposal for a regulation of the European Parliament and of the Council on establishing the European Competitiveness Fund (‘ECF’), including… the specific programme for defence research and innovation activities, repealing Regulations (EU) 2021/522, (EU) 2021/694, (EU) 2021/697, (EU) 2021/783, and amending Regulations (EU) 2021/696, (EU) 2023/588, (EU) [EDIP]

for the Committee on Industry, Research and Energy on the proposal for a regulation of the European Parliament and of the Council establishing the European Competitiveness Fund (‘ECF’), including the specific programme for defence research and innovation activities, repealing Regulations (EU) 2021/522, (EU) 2021/694, (EU) 2021/697, (EU) 2021/783, repealing provisions of Regulations (EU) 2021/696, (EU) 2023/588, (EU) [EDIP] (COM(2025)0555 – C100165/2025 – 2025/0555(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 European Competitiveness Fund (ECF) entails a substantial increase in investment in innovation, strategic autonomy, resilience, EU companies to enhance their capacity to compete on a global scale and the twin transition, compared to the current multiannual financial framework (MFF); whereas this is still insufficient given investment needs, critical dependencies and the geopolitical context; whereas the proposal consolidates existing programmes, which could reduce transparency and accountability and limit Parliament’s ability to ensure funding for specific policy objectives;

B.whereas the EU should boost spending on strategic priorities, including energy, defence, public health, critical technologies, cybersecurity, sustainable innovation, the decarbonisation of energy systems and the clean transition, and make greater use of risk-sharing instruments that have a higher risk appetite than InvestEU and ensure additionality, in order to mobilise private investments, strengthen EU budgetary impact and competitiveness and foster a better financing environment for fast-growing innovative companies, start-ups, scale-ups and small mid-caps; whereas the implementation of risk-sharing instruments should be kept as simple as possible;

C.whereas small and medium-sized enterprises, start-ups, scale-ups and small mid-caps are the main drivers of economic growth, competitiveness and innovation in the EU and it is important to ensure an adequate level of investment for them; whereas they should be able to access funding more swiftly and readily in order to close the innovation and investment gap with global competitors and contribute to sustainable growth, job creation, competitiveness and strategic autonomy;

D.whereas the European Investment Bank (EIB) is not subject to external banking supervision; whereas the highest standards of oversight should be ensured in the implementation of the ECF InvestEU Instrument; whereas the risk appetite of the EIB and other implementing partners must reflect the provisioning rate;

E.whereas robust expenditure tracking and performance reporting are prerequisites to guarantee value for EU money, ensuring that the ECF’s unprecedented financial scale effectively delivers on its strategic objectives; whereas such a framework is essential for the sound financial management and democratic accountability of the EU budget;

1.Considers that the ECF envelope should be increased from EUR 234.3 billion (EUR 207.4 billion in 2025 prices) to EUR 264.35 billion (EUR 234 billion in 2025 prices) in the light of the EU’s very high investment needs and the geopolitical situation, as highlighted in the Draghi and Letta reports, including with a view to improving access to finance for European companies and promoting private investment, thereby strengthening the ability of European companies to compete successfully on global markets;

2.Considers that sufficient resources, including human, technical and IT resources, must be available from the outset and throughout the entire programming period of the 2028-2034 MFF to ensure an effective implementation of the ECF;

3.Deplores the very limited breakdown of the ECF budget, particularly compared to the situation for the same actions in the present MFF; notes that this would give the Commission great latitude to shift and decide on spending priorities during implementation, while recognising the need for a certain degree of flexibility; stresses that simplification and flexibility must not come at the expense of transparency and oversight by the budgetary authority; recommends, therefore, that the overall envelope be broken down to reflect the various expenditure categories;

4.Deplores the lack of a detailed indicative budgetary nomenclature proposed in the Legislative Financial and Digital Statement (LFDS); considers that this will hamper oversight and the budgetary authority’s ability to accurately steer policy priorities in the annual budgetary procedure; expresses concern that an overly aggregated budgetary architecture would dramatically increase the Commission’s discretion in transferring and reallocating resources without a decision from the budgetary authority, and would severely limit parliamentary oversight; recommends, therefore, a more detailed nomenclature that properly reflects the ECF’s objectives and structure and enhances transparency, accountability and parliamentary control;

5.Recalls that the budgetary nomenclature must be established in line 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; considers, therefore, that the nomenclature should adequately reflect the internal structure of the programme and in particular the specific objectives; recommends that the Committee on Industry, Research and Energy amend the proposal to include an annex establishing the nomenclature of the programme; 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;

6.Insists that sufficiently detailed and sound legislation, with an appropriate level of governance, is a condition for sound budgetary decision-making and parliamentary oversight during budget implementation; highlights the need for a balanced representation of stakeholders on the ECF Strategic Stakeholder Board, guided by developments in competitiveness and market trends to boost European industry, innovation and investment, with representatives from different sectors of the economy; highlights the essential role of the Investment Committee in ensuring, in particular, that the ECF InvestEU Instrument efficiently addresses market failures or suboptimal investment situations and achieves additionality; stresses that the Investment Committee should remain fully independent in order to guarantee the integrity of the instrument, should have sufficient independent external experts and should be structured in such a way as to fulfil its role; considers that the composition of the Investment Committee should ensure that it has a wide knowledge both of the sectors and policy windows covered by the ECF and of the geographic markets in the EU; highlights the need for the Investment Committee to be supported by a well-resourced secretariat located administratively in the Commission; considers it appropriate for the Commission to conduct a policy check of financing and investment operations before they are submitted to the Investment Committee in order to assess their compliance with EU law and policies, thereby helping to ensure that the Investment Committee’s assessment is independent of policy considerations, in line with its mandate; insists on the need for detailed rules on transparency, participant selection and the absence of conflicts of interest in the governance structure of the InvestEU Instrument; insists that each member of the Investment Committee share with the Commission, without delay and on an ongoing basis, all information and documentation needed to confirm the absence of any conflicts of interest; considers that Parliament should be closely involved in the Competitiveness Coordination Tool; recommends introducing provisions to strengthen control over how the budget is mobilised and spent; considers that the so-called ‘steering mechanism’ can in no way be a substitute for Parliament’s legislative and budgetary powers, and cannot be conceived without a sound governance architecture that ensures the effective exercise of such powers;

7.Believes that all substantive policy choices, such as programme objectives, spending priorities, financial allocations, funding rates, eligibility, selection and award criteria, conditions, definitions and calculation methods, must be determined in the ECF basic act, with full respect for Parliament’s prerogatives as a co-legislator and one arm of the EU’s budgetary authority, and that any supplementing and non-essential elements entailing policy choices that are not included in the basic act must be adopted exclusively through delegated acts;

8.Recalls that the proposal includes the possibility of using a budgetary guarantee, which is an inherently efficient way of leveraging a limited EU budget; stresses that the budgetary implications of borrowing and lending operations must be clearly identified, transparently presented and carefully monitored throughout the MFF period; underlines, in particular, that their potential impact on the MFF headroom or other guarantees must be fully assessed and duly taken into account; insists that all decisions related to such operations must fully respect the powers of the co-legislators and the prerogatives of the budgetary authority; emphasises that is it essential to strengthen the use of budgetary guarantees to catalyse private investment and 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;

9.Considers that the maximum amount of the EU guarantee should be increased to EUR 150 billion, bearing in mind the success of the InvestEU guarantee and the increased emphasis on leveraging the budget; welcomes the 50 % provisioning rate, which should help ensure greater risk-taking than in InvestEU and the European Fund for Strategic Investments;

10.Expresses deep concern that the minimum amount of EU support provided through the InvestEU Instrument is only EUR 17 billion, with a guarantee of only EUR 14 billion; points out that the minimum guarantee is much lower than the InvestEU guarantee of EUR 29 billion; strongly recommends increasing the minimum amount of support to at least EUR 40 billion, in the light of the geopolitical situation, the need for investment in innovation and competitiveness and the need to enhance predictability for implementing partners; recommends increasing the initial amount earmarked for advisory services to EUR 2 billion, given the relevance and high added value of such services in ensuring quality projects, and bearing in mind the services’ importance for successful implementation and the fact that the earmarked amount is just over twice that available for InvestEU, a programme with a smaller guarantee and a more limited range of services;

11.Expresses concern that the proposal contains no policy steer for the InvestEU Instrument, resulting in a lack of predictability for markets and business communities, while giving the Commission great freedom to decide how it should be used; recalls that the InvestEU Regulation sets out an indicative breakdown of the guarantee between the policy windows; recommends establishing an appropriate policy steer, including sufficient minimum amounts for the specific objectives of each policy window;

12.Considers that the ECF InvestEU Instrument should be given priority in implementation, with grants being used only where necessary and primarily to finance actions that lack viable revenue and for which no commercial return is envisaged;

13.Stresses that allocation of resources and award criteria must be guided by the principle of excellence, so that EU funding supports the highest-quality projects across the EU, with measurable results for competitiveness and innovation in line with the ECF’s general and specific objectives, taking considerations of regional balance into account where appropriate;

14.Expresses concern at the possible lack of continuity in allocation of the guarantee from InvestEU to the ECF; recommends that a part of the minimum amount be used to top up guarantee agreements of existing implementing partners for financial products covered by the scope of the ECF InvestEU Instrument to ensure availability from the outset and avoid an implementation lag from one programme to the next, allowing for a smooth transition from this MFF to the next;

15.Considers that implementing the InvestEU Instrument using annual work programmes would hinder efficiency and reduce visibility and predictability; considers that multiannual programming would be more appropriate; recommends, therefore, implementing the ECF InvestEU Instrument in accordance with the investment guidelines, which would give project promoters more time to develop and finance high-quality projects and enable implementing partners to mobilise substantial financing and capital; insists that the investment guidelines be adopted by means of delegated acts to ensure appropriate parliamentary oversight;

16.Highlights the special role of the EIB Group, which, given its experience, Treaty-based mandate and horizontal approach in the implementation of InvestEU, is particularly well placed to deliver under the ECF InvestEU Instrument; considers it appropriate to allocate 70 % of the EU guarantee under the EU compartment to the EIB Group, which allows more room for other implementing partners, recognising their role in the implementation, while also supporting a targeted expansion of the open architecture of implementing partners; considers that the ECF should – like the InvestEU Regulation – fix the amount of the EIB’s aggregate financial contribution to the implementation of the InvestEU Instrument;

17.Recommends including provisions on the content of guarantee agreements, in particular on the remuneration of the budgetary guarantee and on what it can cover, with a view to ensuring clarity and facilitating the negotiation process to enable implementing partners to begin work as soon as possible;

18.Highlights the importance of the risk management framework; recommends that the Commission set at 90 %, for internal and external policies, the confidence level of the value at risk with which it estimates the amount of provisioning required to cover future lifetime losses, as proposed in the interim evaluation report on the InvestEU programme;

19.Takes note of the proposed complementarity between the ECF and other programmes, such as Horizon Europe and the proposed national plans regulation; stresses that enhanced complementarity between instruments must not come at the expense of traceability of expenditure or the prerogatives of the budgetary authority; underlines that the contribution of the ECF to operations financed jointly with other instruments must be explicitly identifiable at all stages of the budgetary cycle; stresses, in this regard, that any such contribution must be duly reflected in the programme performance statement for the ECF; insists that the budgetary authority retain full control over how resources are combined across instruments and over the effective contribution of each programme to EU priorities, specifically through detailed budgetary nomenclature; 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;

20.Stresses that the use of external assigned revenue under the ECF must be clearly circumscribed, fully transparent and subject to effective parliamentary scrutiny; takes note, in that regard, of the provisions relating to additional contributions to the ECF; recalls the importance of ensuring the traceability of external assigned revenue; underlines that, should the Committee on Industry, Research and Energy consider amending provisions relating to external assigned revenue, this should be done in coordination with the Committee on Budgets and the other committees in order to ensure a consistent approach;

21.Recalls the proposal for a regulation on establishing a budget expenditure tracking and performance framework and other horizontal rules for the Union programmes and activities (the performance regulation), which establishes a single streamlined list of performance indicators alongside robust monitoring and evaluation provisions, some of which are relevant for the ECF; underlines that any change to the architecture, objectives and eligible actions under the programme will need to be appropriately reflected in the monitoring provisions under 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;

22.Recalls that under Article 6(2) of the Financial Regulation, the establishment and implementation of the budget must comply with a general regime of conditionality in cases of breaches of the rule of law; underlines, furthermore, that Article 6(3) of the same regulation requires the Member States and the Commission, in the implementation of the budget, to ensure compliance with the Charter of Fundamental Rights of the European Union and respect the values on which the EU is founded, as enshrined in Article 2 of the Treaty on European Union;

23.Considers that revenue, surplus provisioning and defence research decommitments should be kept within the ECF to provide further funding;

24.Calls for consistent and harmonised requirements regarding the prevention, detection, reporting, and correction of fraud from the outset of the implementation period; stresses, furthermore, that robust control and audit frameworks must be established to protect the EU’s financial interests across all funds, programmes and financial instruments of the 2028-2034 MFF.

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

Amendment 1

Proposal for a regulation

Recital 15

Amendment 2

Proposal for a regulation

Recital 16

Amendment 3

Proposal for a regulation

Recital 41 a (new)

Amendment 4

Proposal for a regulation

Recital 43 a (new)

Amendment 5

Proposal for a regulation

Recital 43 b (new)

Amendment 6

Proposal for a regulation

Recital 47 a (new)

Amendment 7

Proposal for a regulation

Recital 51 a (new)

Amendment 8

Proposal for a regulation

Recital 67 a (new)

Amendment 9

Proposal for a regulation

Recital 72

Amendment 10

Proposal for a regulation

Recital 83 a (new)

Amendment 11

Proposal for a regulation

Recital 89 a (new)

Amendment 12

Proposal for a regulation

Article 4 – paragraph 1

Amendment 13

Proposal for a regulation

Article 5 – paragraph 3

Amendment 14

Proposal for a regulation

Article 5 – paragraph 4

Amendment 15

Proposal for a regulation

Article 5 – paragraph 5

Amendment 16

Proposal for a regulation

Article 5 – paragraph 5 a (new)

Amendment 17

Proposal for a regulation

Article 21 – paragraph 3

Amendment 18

Proposal for a regulation

Article 21 – paragraph 7

Amendment 19

Proposal for a regulation

Article 21 – paragraph 7 a (new)

Amendment 20

Proposal for a regulation

Article 23 – paragraph 1

Amendment 21

Proposal for a regulation

Article 24 – paragraph 1 a (new)

Amendment 22

5

Proposal for a regulation

Article 24 – paragraph 1 b (new)

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur for budgetary assessment declares that she included in her budgetary assessment input on matters pertaining to the subject of the file that she 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 for budgetary assessment.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteurs declare that they have 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.