On the proposal for a regulation of the European Parliament and of the Council on establishing the European Competitiveness Fund ('ECF’), including the specific programme for defence research and innovation activities, repealing Regulations (EU) 2021/522, (EU) 2021/694, (EU) 2021/697, (EU) 2021/783, and amending Regulations (EU) 2021/696, (EU) 2023/588, (EU) [EDIP]
CONT-AD-784350
Committee on Budgetary Control · Rapporteur: Ondřej Knotek
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The Committee on Budgetary Control gives its opinion on the proposed regulation establishing the European Competitiveness Fund (ECF), including a defence research and innovation programme.¶¶ It supports the aim of boosting Union competitiveness but raises concerns about heavy reliance on financial instruments, budgetary guarantees, financing not linked to costs, accelerated procedures, derogations from the Financial Regulation and broad Commission discretion. Its amendments strengthen transparency, accountability and sound financial management, and reinforce protection of the Union's financial interests across all implementation modes.¶¶ They require conditions and annual reporting on derogations, safeguards against double funding, traceability to final beneficiaries, justification and auditability for financing not linked to costs, and conflict-of-interest rules for advisory boards.¶¶¶ They also require balanced geographical distribution of support, targeted technical assistance for less experienced entities, and reporting on the geographical spread of ECF funding.¶
Committee position. The Committee on Budgetary Control supports the ECF's objective but proposes amendments to strengthen transparency, accountability and sound financial management, protect the Union's financial interests across all implementation modes, and ensure flexibility and speed are matched by democratic oversight.¶¶¶
Key points
- The amendments require that OLAF, the European Court of Auditors and the European Public Prosecutor's Office can investigate, audit and prosecute across all ECF implementation modes.¶
- Implementing partners, intermediaries, final recipients and, where applicable, third-country counterparts must meet equivalent obligations on access, information and cooperation.
- Derogations from the Financial Regulation must meet clear conditions, with annual reporting to Parliament and the Council on their legal basis, justification, financial impact and beneficiaries.¶
- The amendments require adequate geographical balance and focus technical assistance on less experienced entities, with reporting on the geographical distribution of ECF support by Member State, policy window and funding instrument.¶
- Safeguards against double funding are reinforced and traceability of Union funds down to final beneficiaries, including subcontractors, is enhanced.¶
- Simplification measures must not undermine transparency or accountability, and the single gateway's transparency function is strengthened, with public access to information in line with data protection rules.
- Financing not linked to costs requires robust justification, clear methodologies for setting and verifying milestones and targets, safeguards against overcompensation and double funding, and effective auditability.¶
- Advisory boards and stakeholder consultations must comply with rules on conflict of interest, transparency and integrity.¶
- New definitions are added for 'less experienced applicants' and 'first-time applicants', with targeted support and monitoring of their participation and success rates.¶¶¶
- A new article on competitiveness across Europe requires supportive measures for start-ups, first-time and less experienced applicants and applicants from less developed regions, plus a European Competitiveness Scoreboard and an ECF Dashboard.¶
- A Competitiveness Coordination Tool is established, with Parliament involved as observer, informed regularly and receiving analytical reports and strategic guidance.¶¶¶
- New articles require annual Commission reporting to Parliament and the Council on ECF implementation, and interim and ex-post evaluations.¶¶
Who is affected
- Businesses, research organisations and public entities across all Member States, who must be able to participate effectively in the programme.¶¶
- Start-ups, first-time applicants, less experienced applicants and entities in less developed and transition regions, who receive targeted support and advisory services.¶¶¶
- Implementing partners, financial intermediaries and final recipients, who must meet obligations on access, information, cooperation and due diligence.¶¶
- Third countries associating to ECF activities, which must grant audit and investigatory rights to OLAF, EPPO and the European Court of Auditors.¶¶
- Members of advisory boards, who must comply with conflict-of-interest, transparency and integrity rules.¶¶¶
Figures and deadlines
- By 31 December 2030, the Commission may take measures if funding to Transition and Widening countries remains significantly low.¶
- Beneficiaries must inform the granting authority of variations greater than 10% between the amount granted and the estimated expenditure.¶
- 30% of the budget allocated to the Project Advisory shall be used for actions targeted to start-ups, first-time and less experienced applicants.¶
- The Commission shall transmit an annual report on ECF implementation to Parliament and the Council by 30 June each year.¶
- An interim evaluation is due no later than four years after the start of programme implementation, and an ex-post evaluation no later than four years after the end of the period in Article 4(1).¶
- A notice on each action financed under Article 20 must be published within 60 days of signature of the legal commitment.¶
- Members of the ECF Strategic Stakeholders Board serve a term limited to two years, renewable twice.¶