It’s likely the Commission will dip into the research programme’s budget for its new sovereignty fund – and this won’t be the first time money has been diverted to other causes. Flexibility to respond to changing circumstances is important, but when is enough, enough?
Joep Roet is Deputy Director of Neth-ER, the Netherlands house for Education and Research.
In a few days budget commissioner, Johannes Hahn, will unveil plans for the EU sovereignty fund that was announced as part of the Green Deal industrial plan. The fund should “make sure that the future of industry is made in Europe,” European Commission president Ursula von der Leyen said when she first proposed it in her State of the Union address last year.
That is a laudable objective, but at issue is where the money will come from: it seems likely the Commission will end up robbing Peter to pay Paul and take funds from many programmes, including Horizon Europe.
This would not be the first time the budget of the Framework research programme has been dipped into to accommodate shifting political priorities. Nor is it likely to be the last.
The Green Deal sovereignty fund conjures up memories of the Juncker Plan, which took more than €2.2 billion out of Horizon 2020 for the European Fund for Strategic Investments, now InvestEU.
More recently, the Commission has repeatedly used Horizon Europe to fund new priorities, including COVID-19 and pandemic preparedness, as well as the New European Bauhaus and the EU chips act.
Not surprisingly, research advocates have reacted sceptically. Dissenting voices were particularly loud when the added value was unclear, or when a new initiative has taken money out of research budgets for non-research purposes.
Research organisations need stability to plan ahead and endless budget adjustments achieve the opposite. And it is not like Horizon Europe is flush with cash: the Commission calculated in May that it was short of €34 billion that could have been usefully invested in high-quality proposals in 2021 and 2022. That is more than the total budget that was available to be handed out.
A grand budget
The irony is that political relevance must be an indispensable feature of a large research budget.
Indeed, it is the promise of research to contribute to Europe’s broader objectives - including climate neutrality, digital transformation, and open strategic autonomy - that allowed Horizon Europe to secure so much more funding than its predecessor, Horizon 2020.
So it’s not surprising that policymakers occasionally knock on the doors of the research department to see if there are any outputs that will advance their agenda.
The fundamental question however, is how much Horizon Europe can be flexed before it reaches breaking point.
Room for flexibility
The good news is that Horizon Europe is inherently flexible, and can adapt to suit the circumstances.
Least problematic is flexibility within the clusters. Fundamentally, Horizon Europe is a framework for research spending that uses clusters to allocate funding along broad thematic lines, including health, climate and digital. Research on COVID-19 or, in the past, Ebola was easily accommodated within the health cluster, for instance.
Still, each cluster needs to consider the balance between collaborative projects and large initiatives, including partnerships, missions, and the New European Bauhaus. Some clusters can barely afford regular calls for bottom-up research by creative consortia.
In some instances, flexibility within Horizon Europe is sensible, for instance when multiple clusters rally under one banner. The chips act, for example, boosts the existing key digital technologies joint undertaking with additional funding from three clusters, plus an independent contribution by the European Innovation Council for semiconductor-related innovation. The key point here is that all streams are used to fund research.
Reallocation should nonetheless have a health warning. Changing budget allocations directly harms the balance of the programme and undermines the objectives that lawmakers in the European Parliament and the member states had in mind.
Fortunately, the Horizon Europe regulation includes a cap on budgetary changes: spending for each part may only deviate 10% from the original budget at the end of the programme period. Naturally, a proposal to change this cap would be quite distressing.
Where trouble starts
More problematic is flexibility between programmes, or when Horizon’s budget is redirected to other programmes. This is especially concerning if there is no, or only a weak replenishment mechanism.
From this perspective, the ongoing discussion on flexibility in the EU multiannual budget - due for review in 2023 - does not bode well. There is a widespread feeling among lawmakers that the EU budget cannot respond adequately to crises, including the war in Ukraine and rising energy prices.
This is particularly problematic for research because over two-thirds of the EU budget is locked up in the seven-year agricultural and regional plans. Horizon Europe is the largest unearmarked part of the EU budget, hence an attractive - though improper - piggy bank.
Finally, of most concern to researchers are attempts to introduce additional flexibility when drafting the next framework programme. Consider, for example, extensions to the scope of Horizon by stretching innovation to include large-scale implementation, as happens in the Innovation Fund, or by changing the criteria for project selection, that is, excellence and impact. These proposals jeopardise the very purpose of the programme: strengthening Europe’s scientific and technological base.
This is not beyond the realm of possibility. The commissioner for regional policy, Elisa Ferreira, has repeatedly said that she wants to reform the European budget along the lines of cohesion policy, where country envelopes are fixed seven years in advance. In her view, “all policies should undergo ‘regional proofing’, to ensure they obey the principle: ‘do no harm to cohesion’.” That objective can only be achieved by scuppering Horizon Europe as we know it.
Moving forward
The trend towards a more flexible EU budget is clear, and Horizon Europe is no exception. So what principles should guide flexibility in the Framework Programmes?
First, research funding should go to research. This seems obvious, but recent initiatives have tested the limits by concentrating on coordination and support actions, rather than research and innovation.
Second, there should be no adjustment without compensation. Horizon budget may only be reallocated to other programmes if a credible replenishment mechanism is in place.
Third, finally start using decommitments: a larger budget has more leeway. This option has existed for a while now, but the member states in the Council have repeatedly refused to use it, most recently in the chips act.
Fourth, new initiatives should primarily be funded through the flexibilities in the general EU budget, especially the Flexibility Instrument. After all, this instrument is earmarked exclusively for unexpected calamities.
A flexibility instrument within Horizon is uncalled for. The design of the programme already allows for adaptation halfway. Moreover, it is unlikely that member states would resist the temptation to cut an unallocated part of the budget if it reduced their annual EU levy.
With the MFF review around the corner, research advocates must remain vigilant.
Joep Roet is Deputy Director of Neth-ER, the Netherlands house for Education and Research.
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