EU announces budget breakdown for Horizon Europe after 14-hour talks

EU institutions reached a deal at 05.11am Friday on the bloc’s next research programme and the breakdown of its budget.

The final agreed budget for Horizon Europe is €95.5 billion, in current prices, which includes €4 billion recently retrieved in a compromise deal with member states and €5 billion to come out of the EU’s new COVID stimulus fund.

The negotiations, which started Thursday at 15.30 and ran for almost 14 hours, saw member states and Parliament duel it out over how to allot these budget top-ups. The general outlines of the giant research programme, which runs from 2021 to 2027, were already well known but a final deal on the budget wasn’t possible without agreement between heads of state over the shape of the EU’s overall budget and COVID-19 recovery package (this finally came Thursday night).

Members of the European Parliament were adamant on the need to rebalance the seven-year Horizon Europe programme among the three main sections or “pillars” of the programme. Before the negotiating session, the budget had been tilting more towards the big industry-academic collaborations in pillar two and innovation-focused research in pillar three.

Pillar one meanwhile, the home of funding for early stage research, training and research infrastructures, was underfunded, MEPs said. One calculation had “frontier science” shrinking from a 32 per cent share of the total budget under the just-ending Horizon 2020 programme to a 25 per cent share of the total budget in the 2021-2027 Horizon Europe scheme.

Negotiators addressed the issue Friday and restored some of the pillar one spending. The most notable winner was the EU’s top science agency, the European Research Council (ERC), which gained an additional €1.1 billion, and saw its budget go just above €16 billion. According to the ERC, the deal repairs some of the "damage" done to the Horizon Europe budget at a summit in July. "This is certainly good news, even though we still consider that more ambitious investments in research were necessary," the ERC said in a statement.

The Marie Skłodowska-Curie research training fellowships gained an additional €314 million, bringing the total to €6.4 billion, and a pot reserved for building new research infrastructures went up by €257 million to €2.4 billion.

In a separate meeting, officials also agreed on a big expansion of the popular Erasmus+ student programme, that would permit widening access to many more types of students of all ages.

The meeting re-confirmed a €26 billion budget for the programme – nearly twice the €14.7 billion budget of 2014-20, and €2.2 billion more than the member states had previously agreed. The budget had been agreed in principle in November, but a Parliament spokeswoman said the meeting 11 December went further in spelling out the “modalities” of how the money will be divided among different actions in the programme.

That includes dedicated funds to create new Centres of Vocational Excellence, moving the programme well beyond its original student-exchange focus to include training people for new professions. Additional funds are provided for people with disabilities, in poverty, in remote locations or with migrant backgrounds. Also, people in adult education programmes will be able to participate in “mobility programmes” – travel grants – from next year.

All budget figures were presented in “current prices” that account for inflation and are therefore higher than the constant prices, which are the relevant ones from a legal point of view and reflect the real changes throughout a period.

Elsewhere, research projects in the creative sector, which had suffered big cuts over a winding year of budget talks, saw a big leap – up by roughly €1 billion to a total of €2.2 billion. The European Institute for Innovation and Technology also saw its budget go up by €279 million to €3.2 billion.

“Victory for research! Victory for Horizon Europe! Finally, we have achieved an ambitious and balanced budget which strongly supports fundamental research as well as thematic research”, Christian Ehler, one of the European Parliament's chief negotiators on the deal, said in a statement.

Irish centre-right MEP Seán Kelly welcomed the boost for cultural industries in particular, which he said was very important for Ireland. “We can look forward for wonderful research over the next seven years that is going to help the quality of life in Europe,” said Kelly.

The overall result sees MEPs claiming the largest ever EU research budget for digital and green-focused research and innovation. Parliament also convinced member states at the last minute to accept a legal clause that makes respect for academic freedom a condition for funding.

Horizon Europe could finally take shape after the Parliament and member state governments agreed on the overall EU budget.

EU heads of state announced on Thursday evening a deal with Hungary and Poland that unlocked the bloc’s overall €1.8 trillion budget and economic recovery fund. The two eastern countries had been holding up the release of the giant pot of money because they opposed a mechanism tying the disbursement of funds to respecting the rule of law. Warsaw and Budapest are under EU investigation for undermining the independence of courts and media.

Uphill battle

The outcome finds campaigners and science advocates relieved, if not still a little disappointed. Research organisations had lobbied hard for more generous research funds.

“Confronted with a European Council where nobody champions research and innovation, it has been an uphill battle,” the League of European Research Universities (LERU) said in a statement. “It is strange that even in times like these, heads of states and governments are so reluctant to fund research, innovation and education in a proper way.”

Research has taken some heavy knocks during an intensive, multi-year negotiation over the bloc’s future funding, with €13.5 billion diverted out of the Horizon Europe budget in July to other areas, such as cohesion funding and the COVID-19 recovery fund. The European Commission had previously proposed a €94.5 billion budget for the programme, back in 2018, but an urgent need this year to find stimulus funding for COVID-19 altered the appetite for spending this much on science.

The talks Friday morning were bogged down on the question of how to funnel the recently reclaimed €4 billion throughout the programme. This money is cobbled together from different sources, such as fines issued to companies by the EU’s main competition authority and money euphemistically located “within the margins” of EU coffers.

LERU called the top-ups announced on Friday “modest” and said the extra ERC money “only avoids that [its] budget is frozen for the next seven years. A small consolation, disregarding the impressive track record that ERC funding can present,” its statement read.

The ERC’s scientific council this week warned that its €14.8 billion budget – which under the new deal has risen to just over €16 billion – would see the agency continue to turn away “absolutely brilliant” applications for its much sought-after grants.

Finishing touches

The deal will go for formal approval by Parliament and Council before the end of the year. The saga won’t end there – there’s still chunky elements like the big public-private “joint undertakings” to finalise, as well as the big new idea in the programme: the ‘missions’, which will see heavily financed collaborations try make a measurable impact on big societal challenges like cancer and climate change.

Another bit of unfinished business is how international the programme will be. The Commission wants Horizon Europe to open up to other big science countries, such as Australia, Canada and Japan, to join as associate partners.

But so far, the other big negotiation in Brussels – Brexit – has prevented the Commission from making a formal offer to anyone. If the EU strikes a trade deal with the UK before the end of the year, it can move on to negotiate with distant, non-EU countries like Canada and Japan on a pay-as-you-go system for Horizon Europe that could see further funds added to the pot.

This last push on these bits will come from Portugal, which takes over the presidency of the EU Council in January and will aim to broker the final arrangements.

The Commission says the programme will start “as soon as possible in 2021”. As a practical matter, a few months’ delay in the start won’t have a big impact on potential grantees because the Commission had already been making contingency plans, and will still be spending money left over from Horizon 2020 over the next few years.

Standoff ends

Friday’s science deal was made possible after Hungary and Poland dropped their vetoes on the EU’s big budget and recovery package.

The deal allows Brussels to deploy €1.8 trillion in funding, including €1.1 for the EU’s normal seven-year budget and the rest for stimulus spending in economies cratered by the COVID-19 pandemic. It also brings the EU to a new fork in its history, with the bloc agreeing for the first time to issue joint debt to finance the recovery funding.

“Europe moves forward,” tweeted European Commission president Ursula von der Leyen on Thursday.

The compromise reached with Hungary and Poland will still tie the funding to respecting the rule-of-law, but now any country that disagrees with this mechanism will be able to challenge it in the European Court of Justice.

In Parliament, where there is strong support for checking Hungary and Poland’s democratic backsliding, members called said the deal a step forward.

Green leader Ska Keller called the agreement “a success in the defence of the rule of law and the start of Europe's recovery from the COVID-19 pandemic. EU funds must not be open to abuse by oligarchs and corrupt politicians. The last-minute agreement is a compromise that keeps the legal text on the rule of law mechanism unchanged and it must remain this way,” she said in a statement.

Keller added her “regrets” that the EU could have to wait a long time for any rulings from the EU’s highest court.

EU officials had threatened to go ahead and spend the money among 25 member states if Poland and Hungary didn’t drop their vetoes – a politically explosive option that many were keen to avoid.

Another scenario would have seen Brussels forced to finance itself through a provisional and much reduced budget in 2021 that would halt spending on new projects like Horizon Europe.