What’s an R&D programme for? How Horizon Europe negotiations show mounting east-west tensions

One of the clichés of Brussels is the negotiation that goes into the wee hours of the morning. On the night of March 19th to 20th, just such a meeting dragged past 2:30am over a few key issues – chief among them: how much a scientist in Romania or Slovakia is worth to Europe.

The dispute – still far from over – involves the way the European Commission pays researchers when they join European Union projects. In most cases, the Commission reimburses universities and others for whatever they normally pay scientists in their countries. Given the economic disparities around the EU, that leads to some striking pay imbalances: on average, €3,240 a month in its poorer, mostly eastern countries, against €5,260 in the richer north and west.

Unfair, some say. “I think the principle of equal pay for equal work is something which just cannot be denied,” argues Dan Nica, a Romanian member of the European Parliament who was in that late-night bargaining session and proposed a 25 per cent pay boost for grantees from poorer countries.

He offers a hypothetical: “You have a team of five researchers (in a project). Three are from the (rich) EU-15, and two are from the (poor) EU-13. These five researchers deliver the same quality of work… So how can you justify that three of them are paid twice the other two?”

“It’s not about the money,” Nica adds. “It’s about the respect.”

The counter-argument, advanced by the Commission and others: The east-west pay gap is a shame, but you can’t use a European science programme to fix a national economic problem. That’s an issue for another EU programme, “cohesion” funding for regional development.

“What is the purpose” of R&D funding? asks Janez Potočnik, former EU research Commissioner, and a Slovenian economist. “The purpose is to strengthen science and the competitiveness of the EU. It’s not a cohesion policy.”

‘A two-speed Europe’

And there you have the two sides of what has become a looming question over the future of EU R&D money: What’s it for, and who should benefit? In an effort to understand the conflict, Science|Business has been piecing together what happened in the negotiations so far – speaking to dozens of participants at various stages of the talks. The turn of events concerns many EU R&D supporters. Says Robert-Jan Smits, former EU director general for research and now president of Dutch university TU Eindhoven, “There was a lot of divide and conquer between these countries. It shows again a rift in Europe. It polarises the debate. It’s unfortunate.”

Europe’s dominant R&D players – Germany, France, UK, the Netherlands, the Nordics – see their overriding mission as boosting European science, technology and competitivity; and they have helped structure the Framework Programme to that end. The fact that their universities and companies are also the main beneficiaries is the product of decades of heavy R&D investment nationally – or, as Potočnik puts it, “the Framework Programme is about excellence and competitiveness. By default, those with the most excellent institutions will have an advantage. That’s a no-brainer.”

By contrast, many east European countries – such as Slovakia, Romania, Poland and Hungary – see the pay gap as worsening the brain drain from east to west, and say their researchers are often shut out of the lucrative bidding for grants. Collectively, the 13 mostly eastern countries that joined the EU since 2004 get just 4.8 per cent of total Framework funding – yet they represent 17 per cent of the EU population.  Further, in a post-Brexit EU, they may face cuts in their cohesion and agriculture funding. That will further deepen east-west tensions. Says one east European official, “One part of Europe is more advanced; another is less advanced. There’s a two-speed Europe, de facto.”

These tensions have been underlying the past year of bargaining in Brussels over the next Framework Programme, Horizon Europe.  A tentative deal was reached at that March all-nighter in Brussels and last month the European Parliament blessed it.  Further negotiations over the next 18 months will determine outstanding questions such as how big the budget will be: €120 billion as the Parliament wants, €94.1 billion as the Commission proposes, or something less if political stalemate ensues. The current seven-year programme, Horizon 2020, costs €77 billion.

But many bemoan the political histrionics. Negotiators for the richer countries banded together in an informal club they called “Friends of Excellence” – a reference to their policy that the top quality projects, as judged by expert evaluators, should get the money. The poorer countries united in their demand for more money, but not in how to get it. For some, the pay gap mattered most. For others, it was the overall budget allocations, or access to the western project consortia.

The outcome so far: a bit of a muddle, with both sides claiming wins and the Commission relieved simply to be able to get on with its work of planning the programme.

EU democracy in action: At the 30 November 2018 EU Council meeting, delegations debated possible solutions to East-West tensions over Horizon Europe. This edited video shows some of the key eastern viewpoints – and the conclusion.

Where’s the UK?

Of course, there are other difficult factors in these negotiations besides east-west tensions. One problem is Brexit. The UK was focused on making sure the programme would still be open and attractive to it after leaving the EU – and it largely succeeded. But in contrast to past negotiations, when the UK took a strong hand in shaping programme details large and small, this round found the British atypically cautious. Says one official: “In the past it was often the Brits that found the solution wishy-washy enough for everybody to accept. But they didn’t speak much now. I guess they felt they wouldn’t be heard.”

Other surprises: Spain and Italy dug in their heels to defend thousands of small grants that their little companies excel at winning from Brussels. France, Spain and Portugal teamed up to push some extra money towards their remote territories, such as Martinique and Madeira. Greece got a small gift in the form of eligibility for money to help its scientists network better across Europe, while Luxembourg lost that eligibility. And a messy legal feud broke out among the Parliament, Council and Commission over control of the programme.

Even so, the east-west dispute generated an intensity of emotion during this first stage of negotiation, from June 2018 through April 2019, that surprised many. Of course, how much a distinguished professor at an elite university gets paid is hardly a burning concern for voters anywhere, but the issue does play into broader eastern feelings of discontent with Brussels. In Romania, Nica – a former deputy prime minister – cites other examples: unhappiness that some companies sell lower-quality products in the east than in the west, under the same brand name. Another complaint is Romania’s continuing exclusion from the visa-free Schengen area.

Such complaints need attention, Nica argues. In the upcoming European elections, “We want to strengthen the pro-European feelings among Romanians.”

PART 1: How to pay a scientist

When András Báldi, a prominent Hungarian ecologist, first joined a European Union research project, he got a bit of a surprise.

As is routine in these big, multinational consortia, the participating researchers send their salary information to the leader of the group for reimbursement out of the Brussels grant. In his case, the leader, “wrote back that I probably mistyped something.” He was being paid far less than his west European partners.

He didn’t make a fuss. Being a scientist, “Isn’t something you do if you want to earn a lot of money. I’m in ecology. Most people are here for the love of nature. Salary is a secondary issue,” Báldi said.

That was 15 years ago, when Hungary and many other former East Bloc countries joined the EU, but the issue hasn’t gone away. In Horizon 2020, the general rule is that the Commission reimburses whatever a researcher’s institution says is their normal salary, within limits - since February 2017, up to whatever a comparable R&D project in his or her home country would pay. So because Swedish government projects pay better than Romanian, a post-doc in Stockholm gets, on average, €7,540 a month (the highest in Europe.) By contrast, lowest paid are researchers in Warsaw or Zagreb: on average, €2,610. Yet in almost every country, Horizon generally pays better than average national salary levels – private and public sector combined. And it isn’t just the east that is affected, salaries are lower in Portugal and Greece, too; it just hasn’t become as big an issue there.

The whole pay question intensified, however, when the Commission proposed Horizon Europe on 7 June. Under the standard EU legislative system, after the Commission proposes, its draft legislation is chewed over by the 28-member Council of ministers and by the European Parliament. Then all three come together at the same meeting to reconcile their different drafts.

Nica, as one of the lead negotiators for the Parliament, proved adept at raising the east’s complaints. He called for Horizon Europe to bridge the “innovation gap” between east and west, speaking out in Brussels and at home on Romanian television.  He proposed that researchers from poorer countries get a top-up to their regular Horizon pay rates, initially asking for 50 per cent, but he later lowered the demand to 25 per cent. At that rate, the Commission calculated it would add about €700 million to the programme costs, but also have the unintended effect of enriching the elite. Because the pay rise would be a percentage of existing salary, the proposal would give the biggest cash benefit to the highest-paid researchers. Instead, the Commission proposed a minimum pay rate across the EU of €3,025, costing less overall, but preferentially benefitting young, underpaid scientists. The effect of all these options – a minimum wage, a percentage rise, or no change – varied greatly around the east, depending on national pay systems. Finding a common eastern position would be difficult.

And in the 28-member Council, meanwhile, a parallel drama was unfolding – not just on pay, but on all the eastern complaints.

PART 2: The networking gap

When Hungary and several neighbours joined the EU on May Day 2004, many had a distinguished scientific history – Copernicus, Mendel, Tesla, Marie Curie, to name a few luminaries – but a poor present. None had the money or policies to matter much in global science or technology. For most, their EU accession negotiations opened with the R&D programme among the first on the agenda. With no major economic interests at stake, it was deemed an easy win to set the tone for more-difficult treaty issues. 

Since then, the new members have made economic progress but most are still laggards in science and technology. The Commission’s annual Innovation Scoreboard rates Slovenia today as the strongest of the lot, and Bulgaria and Romania as the weakest (“modest innovators”, in the Commission’s diplomatic wording). Since 2010, Lithuania has been the star pupil, with the Commission’s various innovation indicators giving it top marks for fastest progress in the entire EU, east or west; Latvia is close behind. But as a group, the Commission says, their performance in science and technology has risen more slowly than that of most west European countries, “leading to a widening of the performance gap”.

EU programmes are supposed to help. About €60 billion is earmarked in the EU’s current seven-year budget for “cohesion” investments to improve the poorer regions’ innovation performance. This is being invested in new labs, university buildings, computer networks and other infrastructure. Further aid comes from the EU’s Erasmus+ programme, permitting thousands of students to move around Europe – including between east and west. But the core money for scientists and engineers is in the Framework Programme. In much of that, the thinking goes, researchers from Estonia or Croatia are to join with colleagues from Germany or the UK in project consortia, competing against other teams for EU research grants. In addition, under the current Horizon 2020 programme, about €800 million is set aside for them to network better with western institutions, so they can win more Horizon grants. 

The result is that the EU-13’s participation in Framework has risen slowly, and from a very low level. From 2007 to 2013, the poorer countries got 4.2 per cent of all Framework funding; from 2014 to mid-2018, it was 4.8 per cent, the Commission reports. These countries account for about 10 per cent of all Horizon 2020 applications; but their success rate is 11.8 per cent, compared to 14.9 per cent in the EU-15. They do especially poorly in the toughest competitions, such as the European Research Council and its frontier research grants. They do better in broad research consortia – usually as junior partner to a western institution - and in communications projects.

How you interpret these numbers depends on where you come from.  In the east, officials point out that the EU-13 get even less from Horizon 2020 than non-EU members: their 4.8 per cent compares to 8 per cent going to a group of 16 non-EU countries associated with Horizon, such as Israel, Switzerland and Norway (those countries also pay into the programme’s common funding pot.)

 And they complain that they’re often shut out of the bidding networks of the west’s top institutions – what a meticulous report last year from the European Parliament called an “oligarchic core” of dominant grant-winners. Several times a year, the Commission announces a call for grant applications in various fields and immediately, researchers in the strongest universities and research organisations contact one another and start planning. They include France’s state research agency, Germany’s Fraunhofer, and the universities of Cambridge and Oxford. They form bidding consortia, and generally pick the strongest partners possible. Often, that doesn’t include the east.

There are other factors, too. The stronger organisations know the programme very well, and have grant departments that help write up a convincing case to get the money. That kind of support is usually weaker in eastern institutions, for lack of experience and investment. Plus, applications are in English. Some parts of Horizon, such as the prestigious European Research Council, generally require impressive publication records, often in western journals.

There’s little dispute about the scope of the problem, but the remedy is in contention. In the west, officials argue that the EU-13 simply isn’t investing enough of its own money in its science base. They may be getting just 4.8 per cent of the Horizon money, but their combined national R&D budgets amount to only 4.4 per cent of total member-state spending. They don’t provide enough support to their grant-seeking scientists. Their industries are too low tech to compete for R&D money against the likes of Germany’s Siemens or France’s Sanofi. In short, there are scores of reasons why they have difficulty getting Horizon grants and it is argued, most involve their own government policies.

“They say the EU-13 get less (from Horizon) than Switzerland or Israel, but if you look at where these countries stand, it’s a fair picture,” says Smits, TU Eindhoven president. “These countries are investing (a small percentage) of their GDP in science and innovation. They often don’t allocate funds competitively, or have differentiations in salaries between a mediocre researcher and a good researcher. Reforms are needed. Charity starts at home.”

These issues came up “big time” in 2011, in negotiations over the current Horizon 2020 programme, when Hungary and then Poland held the chair of the EU Council, Smits recalls. Intent on preserving the principle that the best project should win the grant, he initially opposed including any special measures to “widen” the distribution of money to the poorer countries.

But as the negotiations dragged on, Smits and the then-Polish science minister Barbara Kudrycka – resting pool-side in Cyprus after a difficult Council meeting – worked out a compromise: Some money in Horizon 2020 would be dedicated for EU-13 researchers to network in depth with western counterparts,  increasing their odds of winning grants. Separately, the Commission made changes to innovation funding in its regional development programmes to help the east. And on the very last day of Horizon 2020 negotiations in 2013, the pot was sweetened further to include certain kinds of national bonuses in the researcher-pay calculations for poorer countries, up to a limit of €8,000 a year.

As Horizon 2020 got under way in 2014, some of these changes worked, and some didn’t. Eastern participation in the programme actually fell in the first few years, but then recovered and grew slightly. The regional development, or “cohesion” funding, did some good but its administration proved complex and, besides, most poorer countries care more about building hospitals and roads than universities and wafer-fabs. On pay, very few eastern researchers knew about or could take advantage of the bonus-pay system; it was too complex to administer.

PART 3: Getting to yes

The whole east-west discord over pay, budget, networking and more, was on public display at a Brussels meeting of the EU Council on 30 November 2018.  “Lithuania cannot accept the current proposal” for Horizon Europe, the Lithuanian representative announced. “Our first priority was the problem of unequal participation of the member states in Horizon. For us to be able to support [it], we would need first a political acknowledgement that this is a problem, and, second, concrete proposals.” In short order, he was joined by the Hungarian, Polish, Slovakian and Croatian delegations in a joint statement urging further measures to help the east.

Earlier, Hungary had proposed that 20 per cent of all the Horizon money be aimed at the poorer member states, and there should be “national envelopes” of money set aside. Poland suggested the programme have a political target of 7 per cent dedicated to the east, much like targets already planned for climate research and small businesses. Germany, Sweden, France and other western countries balked, there was no way would they accept that kind of earmarking. It would undercut their demand that R&D grants be awarded only to the best, regardless of where they live and work.

The rushed negotiating schedule played into the hands of the west. The Council and Parliament were pushing to get as much of the Horizon legislation agreed as they could before European elections and a new slate of Commissioners later this year. And, for the Austrian government then chairing the Council negotiations, there were lots of other important disputes to be settled besides eastern pay scales or networking clubs.

So, even as some of the eastern delegations were publicly protesting in November, others had already accepted a package of measures, designed by the Commission, to address part of the problem. Introduced by the Austrians as “Advancing Europe,” the package would add more money to help scientists from poorer states network better with richer countries and so win more grants. There would be new matchmaking service to help in finding partners, an advisory service to improve their proposals, and a budget enabling them to join existing western projects in midstream, in a “hop-on” provision. The package didn’t resolve all the eastern complaints; it ignored pay or budget targets. But it could win enough support to move the negotiations forward.

The strategy worked.  When the member states cast votes in December, despite the public speeches, only Hungary actually rejected the deal. Slovakia abstained, and all the others went along. The formal Council position for upcoming negotiations with the Parliament and Commission was set.

As those three-way trilogue sessions began in January, there were scores of difficult issues on the table. Horizon Europe’s new business-focussed technology commercialisation funding programme, the European Innovation Council, was a bone of contention, with the Parliament insisting the money be focused on small companies needing grants, rather than bigger companies looking for fancier debt or equity financing. The definition of several sector-specific “clusters” of funding, affecting how much money would go to aerospace, automotive and other strategic industries, was a major source of disagreement among all member states seeking R&D subsidies for companies back home.

But the pay issue wouldn’t die. Parliament was backing Nica’s proposal to boost poorer researchers’ pay by 25 per cent; the Council opposed it. On budget, Parliament wanted 4 per cent of Horizon dedicated to the Advancing Europe package; the Commission proposed 1.8 per cent and the Council 3 per cent. And Parliament, more sympathetic to the eastern cause, had a laundry list of wording changes in the law that would have the effect of elevating the political importance of the east in the programme.

Getting to a deal took six meetings, including the final session March 19-20 lasting past 2:30 in the morning. In the end, on east-west issues, there simply wasn’t enough political muscle in the room to get everything Nica wanted. As is often the case, the Parliament negotiators themselves weren’t in full agreement on every point; and the eastern member states weren’t acting as a unified bloc.

Pay, while important, simply wasn’t the number 1 issue for everybody in the east. Worrisome to Hungary, for instance, is the threat of a 25 per cent cut in its regional development money under a separate set of legislative negotiations for next year. Poland’s national pay system already aligned well with the Horizon rules; its bigger worries include getting EU money to modernise its coal-burning factories – nothing to do with Horizon. The Romanians, though supporting the eastern positions, had to appear neutral because on 1 January 2019 Bucharest had taken over the rotating chair of the Council meetings. Its job was to broker deals, not insist on its national demands.

The bottom line

So what’s the score? Despite their demands, the eastern states didn’t get much concrete on researcher pay included in the legislation, beyond a requirement that the Commission regularly monitor salary data in future. They didn’t get the non-EU restrictions some wanted to keep the post-Brexit Brits from getting too much money (the UK could join Horizon if it pays an entry fee.) They didn’t get a legal requirement that Horizon’s Europe’s key objectives include bridging the innovation gap; instead, that was left as one of many non-binding “principles” of the programme. And they certainly didn’t get any commitment to ring-fence a big percentage of the budget.

But they did get the Advancing Europe package to improve their odds of winning grants, at a compromise 3.3 per cent of Horizon Europe, or €3 billion to €4 billion depending on final negotiations next year. They also got several subtle changes in the long legal texts, for instance, a provision that if two project applications end up with the same evaluation scores, the Commission will take into consideration geographical distribution in deciding which gets the grant. That provision, it’s argued, will nudge western researchers to invite more easterners into their project applications from the start.

The negotiations are formally on hold for the next half-year, pending the arrival of the new Parliament and Commission. The Commission staff, meanwhile, are busily planning the programme as agreed so far. And it’s getting ready for the next, crucial round of talks to start this winter over the budget, non-EU participation and the links between Horizon Europe and other EU programmes.

But there’s also, some negotiators feel, a strong possibility that the east-west argument restarts this winter. Says one: “This discussion is not over.”

Nicholas Wallace contributed to this article.