EU should spend more on Horizon Europe, Macron says

The EU needs to fundamentally change, including the way it invests in research and innovation, or it might die. That was the gist of a speech by French president Emmanuel Macron at Sorbonne University today.

But there is hope, he said – at least as long as member states agree to reform the EU single market and rewrite the rules for state aid, allocate a lot more money to the EU budget, and invest more in research and innovation.  

According to Macron, the EU should at least double its budget including by introducing new European levies on multinationals and from cross-border carbon adjusting schemes. That would enable the EU to spend more on things that would help the bloc reinvent its economy. That extra spending would include  bigger budgets for research and innovation programmes.

“Horizon Europe must be reinforced by focusing on the most effective programmes such as the European Research Council,” he said.

His comments, politically, were revisiting one of his first and most influential speeches on EU affairs after becoming president of France – and that was also at the Sorbonne. At that time, in September 2017, he forcefully advocated for the creation of what became the European Innovation Council, giving the idea a strong boost in Brussels policy circles. With his latest speech, he appears to be pushing again on other EU leaders to move faster and bolder.

In today’s speech, he said member states should once again renew their efforts to achieve a target of spending 3% of gross domestic product on  expenditure in research and development.

This goal was first set more than two decades ago and, on several occasions, EU policymakers – including former research commissioner Mariya Gabriel – tried to breathe new life into the long-standing political commitment, but it never materialised.

According to Eurostat, only a handful of member states surpassed that threshold, with the EU R&D investment average still hovering around 2.2% of GDP. The 3% target “is a priority,” Macron said.

Another change that needs to happen, according to Macron’s macroeconomics handbook, is a change in the way the EU sees risks. He praised the work of the European Innovation Council (EIC) so far; but with a budget of only €10 billion euros for seven years, its impact is limited, and the EU could go even further in supporting breakthrough innovations.

Europe should become “a continent that invests in breakthrough innovation and advanced fundamental research,” Macron said.

According to him, the EU’s economic power is dwindling as the US and China are rehashing the rules of international cooperation in trade, digital, space and energy.

But this view is not that new. In a flurry of reports, policy papers and speeches, EU thought leaders have been advocating for a fundamental paradigm shift, otherwise the bloc will be unable to secure its strategic autonomy in an increasingly volatile world.

Last week, a high-profile policy report by former Italian Prime Minister Enrico Letta called for a revamped single market that includes a “fifth freedom” dedicated to the free movement of research, innovation, knowledge and education.

Another report published earlier this year by the University of Bocconi also called on the EU to revamp its research and innovation strategy and adapt it to new geopolitical challenges.

Another former Italian Prime Minister, Mario Draghi, is expected to publish another report on how the EU can regain its competitiveness.