EU should double, if not triple, the EIC budget, Zaharieva says

The European Commission hopes to at least double the budget of the European Innovation Council (EIC), if not triple it, when the agency can only finance 4% of the projects it receives, research commissioner Ekaterina Zaharieva told MEPs on Thursday.

“We are going to expand the European Innovation Council, hopefully to minimum double the budget,” Zaharieva said at a meeting of the European Parliament’s industry and research committee (ITRE). “I think we even have to triple the budget for innovation because now it’s really unbalanced – the third pillar is very small."

The EIC was launched to help start-ups and small businesses scale up breakthrough technologies and innovations. 

It currently has a budget of €10 billion out of the nearly €14 billion allocated to the third pillar of Horizon Europe over the 2021-2027 period. This represents less than 15% of the total funding for the research Framework Programme.

On the other hand, the first and second pillars have dedicated budgets of €25 billion and €53.5 billion, respectively.

Zaharieva said that the success rate of EIC project submissions was too low, at 4%, and that more money was needed to finance “the excellent projects” that it receives. Her team is working on a proposal to provide the EU’s funding body with “a budget that will fit the purpose [of making] Europe the best place to do innovation,” she told MEPs.

This statement comes after months of speculation over the structure and budget of FP10, which the Commission is set to present on July 16.

In March, the EIC joined forces with the European Research Council and asked for budget increases. MEPs and research lobbies have also insisted that FP10 has a ringfenced budget of at least €200 billion in the next multiannual budget of the EU, due to start in 2028.

Zaharieva has however indicated that more than doubling the next Framework Programme was an “unrealistic” demand.

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The Commission has also announced that it would work with private investors to deploy a Scaleup Europe Fund as part of the EIC to allow direct equity investments in strategic sectors like artificial intelligence, quantum and clean technologies. Meanwhile, the EIC recently raised its ceiling for equity investments to €30 million, and the idea is for this new fund to provide even larger ticket sizes.

“Start-ups and scale-ups need better funding,” Zaharieva told MEPs. “We need a deeper, better integrated EU venture capital market with more involvement from European institutional investors.”