Don’t cut R&D to reduce deficits, Commission tells national governments

Member states are being told not to cut budgets for R&D or education in the European Commission’s New Year prescription for economic recovery, unveiled yesterday (12 January).

Presenting the first Annual Growth Survey, European Commission President Jose Manuel Barroso said, “We face a simple choice: a decade of debt or a generation of growth. All the tools should be used to do the job.”

One such tool is research, and national governments are being encouraged not to cut R&D funding as part of austerity moves to reduce their deficits. “All member states should primarily adjust their expenditure, while protecting growth-friendly expenditure especially education, research and innovation,” said Olli Rehn, Economic and Monetary Affairs Commissioner.

The Annual Growth Survey, touted as, “the first comprehensive response” to the financial crisis, marks the beginning of a new approach to economic governance by the Commission. The Survey sets out actions which the Commission says are essential to promote recovery in the short-term, to keep pace with competitors and prepare the ground for the Europe 2020 objectives. This will include cutting structural deficits and stabilising the financial sector, promoting job creation, and measures to promote economic growth.

Innovation policy is seen as central to efforts to revive economic growth, and this is also reflected in the Innovation Union initiative and the fact that the subject of innovation is high on the agenda of the next European Council on 4 February.

“The Commission is confident that heads of state and government will give a comprehensive and clear endorsement to the Innovation Union package,” at that meeting, Mark English, spokesman for Research and Innovation Commissioner Maire Geoghegan-Quinn, told Science|Business.

The Annual Growth Survey includes a progress report on where the EU stands in implementing the Europe 2020 strategy, and in taking the first steps towards achieving the headline targets. One of these is investing 3 percent of the EU’s gross domestic product (GDP) on R&D, the target also central to the failed Lisbon Strategy that drove the EU’s economic ambitions for the first decade of this century. Member states have now submitted preliminary figures for where they stand in terms of meeting the 3 per cent target, and the Commission’s interim conclusion, announced yesterday, is that, “The EU still has some way to travel,” to meet it.

While many countries say they have reached 3 per cent and Austria, Finland and Sweden have exceeded the target, about half of member states remain below 3 per cent. Overall, EU investment in R&D as a percentage of GDP now stands at 2.7 - 2.8 per cent.

Ireland, the Netherlands and the UK didn’t provide a figure in their draft national reform programmes. “We hope that all member states now specify the national targets as they have committed. That was agreed,” Barroso said.

Member states are to submit their final national reform programmes in April. The Commission will then assess the plans by June and make country-specific recommendations.

Pia Ahrenkilde Hansen, a European Commission spokeswoman, acknowledged that efforts to reach the 3 per cent GDP target during the past decade were not very successful. But she said there is now a renewed commitment, “to support knowledge as a key driver to come out of the crisis and pave the way for future growth”.

“Awareness is today much more acute of how vital this is for Europe’s future competitiveness - the crisis context has pushed this to the top of the agenda,” Ahrenkilde Hansen told Science|Business.

Hungary takes over presidency

The New Year also saw the start of a new six-month term for the rotating EU presidency, with Hungary taking over the reins from Belgium and this week setting out its work programme.

The Europe 2020 strategy is centre-stage and at the next Competitiveness Council on March 10 - 11, national ministers responsible for research, industry and internal market matters will assess and discuss the strategy’s Innovation Union and the Industrial Policy initiatives and start implementing them.

Other priorities for the Hungarian presidency include debating the interim assessment of the 7th Framework Programme to prepare the ground for the 8th Framework Programme. Simplification, “ to leave our researchers more resources for their core activities,” is a key aim. There will also be further efforts to build the European Research Area.

The Hungarians have also pledged to see through the decision to use the enhanced cooperation procedure to push through a Community Patent.