Commission puts forward €13.6B research budget for 2024, with €12.8B for Horizon Europe

The European Commission wants the EU to spend a total €13.6 billion on research and innovation next year, with €12.8 billion going to Horizon Europe. That is €400M more for the research programme than 2023, but in the face of rampant inflation the European Parliament doesn’t see this as a major increase.

Under the Commission’s proposal for the 2024 EU budget, in addition to €12.8 billion for Horizon Europe, a further €800 million for research would come from other programmes, such as €281 million for the Euratom nuclear research programme.

The largest chunk of the Horizon Europe money, €6.4 billion, will go to collaborative projects under pillar II. Funding for fundamental research amounts to €3.4 billion, of which €2.1 billion is to be distributed through European Research Council grants. The innovation pillar gets €1.66 billion, including €1.1 billion for the European Innovation Council.

All parts of the EU’s research and innovation landscape would get more money - if not more spending power - apart from ITER, the magnetic fusion device under construction in France. The project will see a €250 million cut to €556 million, “due to a slowdown of the budget implementation.” Of this, €50 million will be transferred to energy initiatives in the EU infrastructure programme, the Connecting Europe Facility.

Inflation is combining with challenges ranging from ushering in a net-zero future, to cushioning the blows from Russia’s war in Ukraine, leaving MEPs with the sense that the €189.3 billion overall budget for 2024 put forward by budget commissioner Johannes Hahn, cannot sustain the union’s ambitions.

The budget has also been hit by an increase in interest rates, with Hahn telling MEPS the cost of borrowing “almost doubled from the amount initially forecast for 2024.” This is a new type of budgetary headache for the EU, which only began borrowing in its own right two years ago, before rising inflation led the European Central Bank to increase interest rates. Based on 2020 numbers financing costs for 2024 were expected to be €2.1 billion. The latest forecast is €4 billion.   

The European Parliament has been calling on the Commission to revamp the budget to ensure it is fit to deliver on policy promises. The Commission may deliver – a review of the long-term EU budget is scheduled for 20 June. While it’s unclear whether it could spell major changes, MEPs hope for the review to shake up what they see as an unsatisfactory proposal.

“For us, this is a decoy budget for next year, because the actual budget is going to come later on, in a couple of weeks,” said centre-left MEP Victor Negrescu in a discussion at the Parliament’s budget committee. “We want to see not only a review but an actual improvement that would allow us to meet people’s expectations.”

The Commission’s doesn’t see it this way. Hahn insisted the review and the 2024 proposal are separate matters. But Jan Olbrycht, chair of the budget committee, said the review and next year’s budget are “more or less two sides of the same coin.”

The member states and the Parliament will now start working on their respective positions on the budget before they convene to negotiate the final numbers in late October. But the Commission’s review of the long-term budget may shake up the budget talks and will be weighed in the negotiations.

Last year’s battle

Each year, the European Parliament and EU member states fight over the size of the EU budget with research and innovation always a contentious point. MEPs usually want a higher budget than the Commission’s proposal, member states want to cut it.

Last year, the Commission wanted to see €12.3 billion spent through Horizon Europe, topped up by an extra €1.8 billion in grants from the EU recovery fund, NextGenerationEU.

To save money, member states wanted to slash it by €663 million. The budget battle, like each year, was long and full of disagreements. The Parliament managed to defend the programme from the cuts proposed but failed to get much more money, beyond an extra €10 million for the research mobility programme Marie Skłodowska-Curie Actions. The final result was €12.4 billion, 1.1% more than 2022 spending, and similar in its shape and form.

There was also a long fight over returning unspent money from previous years to the EU budget, which is likely to play out again. Member states don’t want the money to go back in, the Parliament does. Negrescu hinted the Parliament may again fight the member states on the so-called research decommitments.

Other spending

In addition to the total proposed EU budget for next year of €189.3 billion, an estimated €113 billion will come from NextGenerationEU.

The education mobility programme Erasmus+ will get a 2% increase to €3.7 billion. But MEPs say the increase isn’t big enough. Much of this money funds scholarships for students across Europe, and with sky-high inflation across the bloc, the extra 2% is likely to have little impact in real terms.

There’s also €2.7 billion for the Connecting Europe Facility to improve cross-border infrastructure; €1.3 billion for Digital Europe to continue the bloc’s digital transition; and €348 million for InvestEU funding for research and innovation, and green, digital and health sector technologies.

Sector-specific programmes also continue to get millions in funding. The EU space programme gets €2.1 billion under the Commission proposal; EU4Health €754 million; and the defence R&D programme, the European Defence Fund (EDF), €1.6 billion under the Commission’s proposal.