Opinion on the form of a letter on the general budget of the European Union for the financial year 2025-all sections

12.9.2024

Mr Johan Van Overtveldt

Chair

Committee on Budgets

BRUSSELS

Subject: Opinion on the form of a letter on the general budget of the European Union for the financial year 2025-all sections (2024/0176(BUD))

Dear Mr Chair,

Under the procedure referred to above, the Committee on Industry, Research and Energy has been asked to submit an opinion to your committee. At its coordinators meeting of 24 July 2024, the committee decided to send the opinion in the form of a letter.

The Committee on Industry, Research and Energy considered the matter at its meeting of 12 September 2024. At that meeting, it decided to call on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions into its motion for a resolution.

Yours sincerely,

Borys Budka Christian Ehler

Chair Rapporteur

SUGGESTIONS

1. Recalls the ITRE committee opinion on the guidelines for the 2025 EU budget, and calls for an ambitious budget that focuses on strengthening Europe’s competitiveness in the global economy, supporting the open strategic autonomy of the Union and reducing dependencies on unreliable non-EU countries in key industrial sectors; fully supports the twin digital and green transition and the pathway to climate neutrality by 2050 as set out in the European Green Deal; calls for sufficient and reliable resources for the ramp up of renewable energy sources, reinforcement of electricity grids and boosting interconnections of the EU energy market in order to ensure the secure supply of affordable energy security and the achievement of our climate and energy targets; stresses that providing sufficient funding to implement all EU programmes set up under the MFF will be paramount in achieving these goals in the fields of industrial, digital and energy policy; emphasises the need to provide strong funding to Ukraine as it continues to suffer from the Russian war of aggression, and with a view to its post-war reconstruction and EU integration;

2. Strongly rejects the approach taken by the Council in its position (17 July 2024) on the Commission’s draft EU budget for 2025 and its focus on cutting funds for strategic EU programmes; believes these latest cost cutting attempts directly contradict the Strategic Agenda 2024-2029 and the Political Guidelines for the new Commission, which has to implement the 2025 Union budget; maintains that the Council position does not reflect the growing challenges facing Europe from an economic, social, environmental and geopolitical perspective, and is dismayed that the proposed cuts focus once again on Heading 1 of the MFF (Single Market, Innovation and Digital), which is the part of the EU budget most crucial to Europe’s global competitiveness, the twin digital and green transition and our road to climate neutrality;

3. Opposes the Council position to further reduce funding for EU Research and Innovation (R&I) by 450 million Euros in commitments, with the bulk of the proposed reductions (400 million Euros) hitting the budget for Horizon Europe; reminds that the Strategic Agenda sets out the objective to “close our growth, productivity and innovation gaps with international partners and main competitors” through “a significant collective investment effort, mobilising both public and private funding” and that the conclusions of the April 2024 Special European Council meeting included a commitment to increase “investment in research and development to meet the 3% GDP expenditure target” as part of the new European competitiveness deal; notes that even with the originally agreed budget for Horizon Europe, the Union is not reaching the level of contribution needed to achieve the 3% expenditure target; notes that the Political Guidelines for the new Commission include a commitment to “increase our research spending”; believes therefore that these proposed cuts will not only do serious long term damage to Europe’s R&I capacity, they also undermine the credibility of the Union’s research policy ambitions, may contribute to brain drain of leading European researchers and will slow down the EU in the global race for scientific and technological leadership; is convinced that much greater investment in research and innovation is necessary for Europe to advance its technological leadership in those sectors most impacted by the green and digital transitions; finds that the proposed cuts are particularly incomprehensible now as they come on top of a reduction of 2.1 billion euros in funding for Horizon Europe concentrated in the last three years of the current MFF, as agreed by the Council during its recent revision of the MFF; reminds of the importance of allocating sufficient resources to support the priorities covered by the STEP in order to boost investment in critical technologies in Europe; believes the Parliament should take the opposite approach and support an increase in European R&I, through a judicious reallocation of decommitments and the remaining margins under the EU budget to ensure a higher level of funding than was proposed in the Commission’s draft budget for 2025; restates its fervent believe that any decommitments stemming from the research programmes should directly be reused in the research programme and believes that the use of research decommitments for the interest payments through the EURI Instrument is not acceptable.

4. Firmly opposes the Council position to reduce funding for European Strategic Investments by over 147 million euros in commitments, most notably a drastic and completely unjustifiable reduction of 110 Million Euros for the Connecting Europe Facility - Digital, which represents an almost 50% cut to this programme and is following a historically low budget for this programme in 2024; reminds that the Strategic Agenda outlines the need for “cutting-edge digital infrastructure” and the Political Guidelines identify the need for “cutting-edge digital infrastructure” to make the Data Union work, including the urgent need for the rollout of Gigabit infrastructure networks to enable more innovative services for citizens, businesses and public sector in order to respond to the demand for faster, more reliable, data-intense connectivity; concludes therefore that through this cut, the Council is wilfully undermining the future of Europe; further underlines its objection against the proposed reduction of almost 7 million euros to the Digital Europe programme, and the proposed reduction of over 30 million Euros for InvestEU; reminds that the Strategic Agenda sets out the need for “a significant collective investment effort, mobilising both public and private funding” in order to bolster competitiveness; in this regard believes that the Parliament should as a minimum support restoring these budget lines to the levels originally proposed in the Commission’s draft budget for 2025;

5. Strongly opposes the Council position to reduce funding for the EU Single Market by over 10 million euros, including cuts of 5.5 million euros to the Single Market programme (including SMEs) and close to 5 million euros of cuts in funding for the related decentralised agencies; likewise opposes the proposed reduction of close to 35 million Euros in funding for the EU Space Programme, overwhelmingly focused on drastic cuts to the crucial Union Secure Connectivity programme; believes that the Parliament should as a minimum support restoring these budget lines to the levels originally proposed in the Commission’s draft budget for 2025;

6. Highlights that the proposed cuts by the Council will also negatively affect our horizontal spending target on climate, given that these programmes and in particularly Horizon Europe contribute more than most other parts of the Union budget to this target;

7. Calls on the European Commission and the Council to provide adequate funding and staff for all Union agencies and bodies in the policy areas of industry, research, space, energy and cybersecurity, in the light of new regulatory obligations, increasing workloads and operation costs, including those arising from need to ensure the high level of cybersecurity protection invites the Commission to thoroughly consider new regulatory obligations and increased workloads following from legislation in its distribution of resources and staff across its services.

8. Firmly condemns the continued lack of progress and the absence of concrete new ideas on how to develop EU ‘own resources’, which would make the annual EU budget less reliant on contributions from Member States and in a position to repay the common borrowing agreed for NGEU; highlights with grave concern that this lack of progress comes, again, at the expense of research investments considering that in the MFF revision it was agreed to use research decommitments as first source to fund any uncovered interest payments related to the RRF;

9. Requests the Commission to step up its work to simplify Union Programmes from the perspective of the final users, aiming to lower the administrative complexity of applying for and managing Union funds; believes simplifications should be supported by clear evidence of the benefits they will have for the final users of Union funds; underlines that simplifications are about better and smarter ways of working, while maintaining all standards agreed to in the Interinstitutional Agreement on Budgetary Matters as well as the Financial Regulation for the implementation of the Union budget is necessary.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The rapporteur declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.