03 May 2018   |   Viewpoint

Viewpoint: Why a big budget for Horizon Europe is not a given

The Commission has proposed a big rise in research funding – but in coming negotiations it will face stiff budget competition from politically stronger interests, from agriculture to regions 

The 'Egg' Council building in Brussels, where government leaders meet, and where the budget will eventually be decided. 

Brussels, ever ambitious, is shooting for a bigger research budget after 2020. On May 2, it proposed €97.6 billion for its flagship Horizon Europe programme – up from €77 billion in the current seven-year plan.

So far, the proposal has met with little resistance from member states, leaving officials in the European Commission cautiously optimistic of a spending boost. 

However, facing the loss of the UK’s significant net budget contribution, an increase in research funding is not a safe bet, not least because the goal competes with many new – and longstanding – priorities for member states. Over – inevitably - tough negotiations on the 2021- 2027 budget, research may have less solid backing among member states than other budget items.

Given this, we think current optimism about getting more money for research when Horizon Europe takes over from Horizon 2020 is premature.

This is mainly because funds for innovation and research (R&I) are distributed on the basis of excellence, and not pre-distributed among member states during budget negotiations. In a standoff between net contributors and net recipients, research could end up a loser.

Conflicting priorities

The negotiations over the next long-term EU budget come at a time of heightened terrorist threats, the migration crisis, intensifying global competition for technology leadership, and Brexit. While some are calling for a more ambitious and expansionary long-term budget, it is not even clear whether Brussels can make up for the loss of the UK’s contribution.

Ahead of talks, member states have remained in their traditional corners. Net contributors, like the Netherlands and Sweden, do not want to increase their contributions to the common budget. The bottom line for net recipients, on the other hand, is to maintain the budget’s current level at least. All countries are defending the parts of the budget from which they benefit most, while advocating cuts and “modernisation” in other “less important” areas.

As a result, the successor to Horizon 2020 will have to battle with controversial and long-standing policies, notably subsidies for farmers in the Common Agriculture Programme (CAP) and for poorer regions in the Regional Development Fund, as well as with other new priorities.

Research: a strong case

Among the many diverging interests, research nevertheless stands a chance of seeing a budget increase. Indeed, we have seen a continuous expansion of EU research spending over the last 30 years.

The importance of research for future competitiveness satisfies the demands of net contributors; it has powerful beneficiaries, such as the European export industry, which makes its views known in national debates; and nine different Commission departments support the large programme. 

So far, lobbying for a higher research budget has faced little opposition, not even from Austria, Denmark, the Netherlands and Sweden, the four countries that have been most vocal about the need for overall budget cuts.

All four are large beneficiaries of Horizon 2020 grants. In total, 12 EU countries, including the four budget hawks, have succeeded in attracting more Horizon 2020 funds than their share of the budget by GDP. 

So the fact that the member states which are most sceptical of increases are also benefitting most from research funding could see the programme shielded from cuts.

Beware pitfalls

However, this simple calculation overlooks several aspects. Most importantly it might underestimate the intensity of the approaching MFF negotiations.

We see several potential pitfalls: First, because research allocations to member states are not pre-defined, the negotiation will not produce political winners and losers. So while Polish or Italian voters will know exactly what they lose if cohesion policy is cut, the relationship between a lower budget for research and the cut that implies at a national level cannot be quantified - and therefore might be easier to accept.

Second, large net contributors, although traditionally supporters of a higher budget for research, might give greater priority to avoiding extra payments in the wake of the UK leaving.

Third, member states have been generally sceptical about giving Brussels new functions in research policy, especially if they are seen to duplicate national policy instruments. The Commission, when presenting its proposal, will have to therefore carefully factor in member state appetite for a wider role for EU research.

Recent history suggests the Commission will get less than it asked for on May 2.

During the last negotiations, pre-2014, the budget eventually passed by member states was reduced by 6 per cent from the Commission proposal. Within that, the allocation for Horizon 2020 dropped by 12 per cent.

Philipp Ständer and Pola Schneemelcher are research fellows at the Jacques Delors Institut – Berlin. This article is based on a blog post published on April 16.

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