Opinion in the form of a letter on the Guidelines for the 2026 budget - Section III

19.2.2025

Mr Johan VAN OVERTVELDT

Chair

Committee on Budgets

BRUSSELS

Subject: Opinion in the form of a letter on the Guidelines for the 2026 budget - Section III (2024/2110(BUI))

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. On 19 February 2024, the committee adopted an opinion in the form of letter during its regular meeting.

The Committee on Industry, Research and Energy calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions into its motion for a resolution.

Yours sincerely,

Borys BUDKA

ITRE Chair

SUGGESTIONS

1. Recalls that the Union Budget for 2026 should concretely reflect the political priorities of the new legislative term, considering also the various pledges made by Commissioners during their confirmation hearings in Parliament in November 2024; insists that the 2026 budget needs to fully implement all programmes agreed under the current Multiannual Financial Framework (MFF), as well as set in motion and finance new strategic EU initiatives, such as the Clean Industrial Deal for competitive industries and quality jobs; underscores that the 2026 budget must be aligned with the Union’s objectives and international commitments;

2. Notes that multiple challenges facing Europe require greater investment and coordination at European level, as well as more concrete action by Member States; calls on the Commission to propose a Union Budget for 2026 that reflects the urgent nature of these challenges; among others, the ongoing Russian invasion of Ukraine and hybrid attacks on Member States and their energy and digital infrastructure; maintains this requires multiple forms of EU and national level investments and preparedness, including improving the resilience of digital and energy infrastructure, direct support for Ukraine, accelerated investment in Europe’s defence industry, and support for the EU's Eastern border regions most directly impacted by the war and Russian hybrid operations; the need to strengthen Europe’s economic competitiveness and industrial base in a volatile environment where global competitors benefit from extensive state support, leading to unfair competition for European companies; the urgent necessity to improve Europe’s research and innovation capabilities, including greater support for SMEs, start-ups and scale-ups; the digital revolution, including the acceleration of artificial intelligence and growing concerns about cybersecurity; and the need to achieve a just climate transition, as we adapt our economy to the Union’s long-term energy goals and climate neutrality by 2050, by accelerating the decarbonisation in Europe’s energy markets, implementing European Green Deal legislation and achieving a circular economy;

3. Notes that EU companies face considerably higher electricity and gas prices compared with the USA, China and other global actors, which presents a significant competitiveness disadvantage, especially but not only for Europe's energy intensive industries; emphasises the need to tackle energy poverty and limit the damaging effects of high energy prices on European consumers, many of whom are already struggling with a high cost of living; stresses the importance of reducing EU dependence on fossil-fuels and improving energy efficiency; underlines that security of supply concerns remain paramount and should be addressed in the 2026 budget, given that energy supplies are easily weaponised by state actors; insists on the need to improve energy interconnections, modernise energy grids, integrate a higher share of renewables while ensuring sufficient clean baseload energy and system flexibilities, therefore calls for significantly increased funding for the Connecting Europe Facility - Energy, which is the flagship EU programme in this field but currently has limited resources to credibly advance Europe towards an interconnected, resilient and decarbonised energy system, able to deliver affordable prices; calls for urgently ending any remaining EU import dependencies on Russia:

4. Recalls the need to strengthen the resilience of the EU economy and the competitiveness of Union industries, with ambitious EU industrial policies that can create quality jobs and contribute significantly towards achieving the EU's social, digital and green objectives, whilst preserving a level playing field in the Single Market; therefore believes that the Union Budget for 2026 should mark the start of the investment boost recommended in the Draghi report by investing strongly in industrial competitiveness, open strategic autonomy and creating pathways towards decarbonisation, while securing EU supply chains for strategic sectors and technologies and improving access to critical raw materials; insists that the 2026 budget must continue strengthening the Union’s competitiveness with increased support for SMEs, midcaps and start-ups, including greater support for scale up to compete globally, in particular through the European Innovation Council;

5. Recalls that the 2026 budget for Horizon Europe will be the first after the mid-term review of this strategic EU programme, and therefore needs to offer sufficient investment in fundamental and applied research, foster collaborative research and facilitate the scale-up and commercialisation of research results to ensure Europe can retain and further develop the necessary knowledge base to confront the scientific and economic challenges of the coming decades; regrets that the existing level of Horizon Europe funding is ultimately insufficient to develop the ideas and technologies necessary for the twin green and digital transitions, or to fully deliver on the stated EU goals of sustainable growth and open strategic autonomy; calls for an increase in the 2026 budget for Horizon Europe, including through the reuse of all available decommitments allowing each sub-programme to fund at least 50% of all excellent proposals, given that presently a majority of excellent proposals remain unfunded; calls for maintaining stable and sufficient funding of the ITER project;

6. Stresses that significant investments are necessary to address Europe’s connectivity gap and other Digital Decade 2030 targets; recalls that the European Commission estimates that achieving the full gigabit target could exceed €200 billion; calls therefore for adequate resources to be allocated to provide high speed connectivity including gigabit and 5G services, in addition to investments in next generation digital infrastructures and emerging technologies; calls for further investments that foster the development of European digital sovereignty and an EU-based digital sector in order to catch up in crucial areas such as quantum computing and Artificial Intelligence; calls on the Commission to allocate sufficient resources to ensure the full implementation and robust enforcement of the Digital Services Act and the Digital Markets Act; stresses the importance of tackling foreign interference, addressing the dangers of biased algorithms, and safeguarding transparency, accountability, and the integrity of the digital public space.

7. Underlines that a strong and sustainable European space sector is fundamental for European security, open strategic autonomy, secure connectivity, protection of critical infrastructure and advancing the twin green and digital transitions; regrets that EU and its Member States funding for space programmes is highly fragmented and only a fraction of the level in the US, while other global actors including China are rapidly increasing investments; calls on the Commission and Member States to ensure sufficient funding for the European space industry, which includes fostering investments from the private sector; calls furthermore for a sufficient level of EU investments supporting R&I in the field of space;

8. Calls for adequate funding and staffing for all agencies and Union bodies in the policy areas of industry, research, energy, space and cybersecurity, in order to cope with increased workload and new regulatory obligations;

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

The rapporteur for the opinion 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.