Opinion in the form of a letter on the general budget of the European Union for the financial year 2026 - all sections (2025/0210(BUD))

4.9.2025

Mr Johan Van Overtveldt

Chair

Committee on Budgets

BRUSSELS

Subject: Opinion in the form of a letter on the general budget of the European Union for the financial year 2026 - all sections (2025/0210(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 13 May 2025, 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 4 September 2025. 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

Chair

SUGGESTIONS

1. Recalls the ITRE committee opinion on the guidelines for the 2026 Budget, which requested that the Union Budget for 2026 should concretely reflect the political priorities of the new legislative term, in particular fostering competitive industries and quality jobs, and underlined the need for greater investment and policy coordination at European level, as well as more concrete action by Member States to tackle the multiple and interlinked challenges that Europe faces today;

2. Notes that such challenges include dealing with the dire consequences of the ongoing Russian war of aggression against Ukraine, alongside hybrid attacks on Member States and their energy and digital infrastructure; the need to strengthen Europe’s economic competitiveness and industrial base, requiring much higher levels of targeted and well justified public and private investment, as recommended by the Draghi report on EU competitiveness; the necessity to improve Europe’s research and innovation capabilities, and greater support for European SMEs, SMCs, start-up and scale ups; the digital revolution, including the accelerated development of AI, the need to improve cybersecurity, and the roll-out of next generation digital networks; the need to achieve a just climate transition along the agreed pathway towards climate neutrality by 2050 and an improved functioning and a deeper integration of energy markets, through modernisation of infrastructure, enhanced transmission and distribution grids and interconnections, better integration of renewables, improved system flexibilities and broadening of clean energy supply, while reducing EU dependence on fossil fuels and improving energy efficiency; considers these as urgent measures needed to lower Europe’s very high electricity and gas prices, thereby allowing Europe’s more energy-intensive industries to remain competitive, whilst also tackling energy poverty and limiting the damaging effects on European consumers, already struggling with a high cost of living;

3. Strongly rejects the approach taken by the Council in its position (9 July 2025) on the Commission’s draft budget, particularly the focus on cutting funds for strategic EU programmes under Heading 1 (Single Market, Innovation, Digital) ); deplores especially the proposed -211.25 million euro cuts in commitments to Horizon Europe, -86.1 million cuts to the CEF-Digital programme, -19.4 million cuts to the Digital Europe Programme and -8.4 million cuts to the European Space Programme; calls as a minimum to restore the Commission’s draft budget proposal on all these lines and to increase where appropriate;

4. Supports much greater funding for the Connecting Europe Facility (CEF) for Energy and for Digital, which the Commission’s draft budget proposed to increase respectively by 86.3 million Euros (+9.4% in commitments) and 96.2 million Euros (+43.7% in commitments); this is consistent with the repeated requests from the ITRE committee to raise levels of financing for these strategic EU programmes, which currently have very limited funding and therefore can only impact modestly on the modernisation and interconnection of Europe’s energy and digital infrastructure; consequently, firmly opposes the proposed Council cuts to CEF-Digital; calls for a further increase above the draft budget of 151 million Euros in commitments for CEF-Energy; considers that sufficient funding for CEF is imperative given the potential expansion of its scope under the ReArmEU Omnibus proposal to incentivise defence spending; recalls the European Parliament resolution of 7 May 2025 on A revamped long-term budget for the Union in a changing world (2024/2051(INI)) and underlines its call, in line with the Draghi Report on EU competitiveness, for much greater, directly managed funding for energy and digital infrastructure; strongly regrets that the Council position further cuts the Digital Europe Programme by 19.4 million Euros in commitments for 2026, on top of 97.6 million Euros in cuts (compared to 2025) already foreseen in the Commission’s draft budget; notes that these reductions are coupled with enhanced flexibility for Member States to transfer resources from cohesion programmes (ERDF, CF, ESF+) towards the Digital Europe programme; concludes that the level of such transfers remains uncertain and likely to vary across Member States; asks therefore, to restore the draft budget for DEP, with targeted increases for funding for skills and semiconductors;

5. Strongly rejects the cuts proposed by the Council to Horizon Europe (-211.25 million Euros) and the Euratom Research and Training Programme (-3.76 million Euros), as compared to the Commission’s draft budget; particularly condemns the cut of 90 million Euros to the Cluster “Climate, Energy and Mobility”, which supports the twin green and digital transitions and transformation of our economy, industry and society, and the 20 million Euro cut to the budget of the European Research Council, in light of the Choose Europe for Science Initiative, which will put pressure on the ERC budget in 2026; reminds that the current level of funding for Horizon Europe remains wholly inadequate to effectively contribute to the collective target of 3% EU GDP spent on research and innovation, as agreed in the conclusions of the April 2024 Special European Council; calls therefore for an increased budget for the Programme, in particular for Clusters 2 and 5; insists that much greater investment in research and innovation is necessary for Europe to develop technological leadership, especially in those sectors most impacted by the green and digital transitions, facilitate the scale-up and commercialisation of research results, and to ensure that Europe remains an attractive and competitive destination for research careers; notes that the Commission’s draft budget proposed to restore the EU contribution to the ITER-F4E Joint Undertaking for 2026 to the levels initially foreseen in the financial programming (+365.9 million Euros; +75% compared to 2025), but that the Council position proposes to limit this increase to only +213.3 million Euros;

6. Regrets that the Council position cuts 8.4 million Euros from the European Space Programme (-5 million from Copernicus; -3.4 million from GOVSATCOM SSA); reminds that this comes on top of reduced funding for Galileo/EGNOS (-43.1 million) ) and support expenditure in the Commission’s draft budget; considers that especially in light of the new European Space Act and amidst growing geopolitical competition in this policy area, the European Space Programme should receive higher levels of funding;

7. Welcomes that the Council position retains funding levels for defence under Heading 5, in line with the Commission draft budget proposal, and that the Commission’s draft budget 2026 envisages a commitment of +621.3 million Euros for the European Defence Industry Programme (EDIP); regrets that this has been entirely redeployed from the European Defence Fund (EDF) and therefore does not constitute entirely new EU funds; reiterates, in this context, its long-standing position that new political priorities require fresh money; calls for an increase of 6,5 million euros to the EDF defence research budget line; notes the Security Action for Europe (SAFE) regulation will provide loans that are ultimately guaranteed by the EU budget, but do not involve any new financial commitments; welcomes the ReArm Europe Plan/Readiness 2030, which would allow existing EU funds to be used to support defence industries, including via STEP to cover defence-related technologies and products; considers that a long-term funding strategy and stable investment is needed for supporting the EU’s defence industrial readiness and defence research and collaboration, and securing dual-use infrastructure commensurate in size with the challenges faced by the Union; stresses the need to create a more open competition and competitive defence market within the EU, especially for European based companies, with opportunities for European SME’s and midcaps;

8. 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; invites the Commission to thoroughly consider new regulatory obligations and consequent increased workloads in its distribution of resources and staff across its services; notes that repeated use of flexibility instruments to maintain staffing costs is neither sustainable nor desirable in the longer run, because it reduces the scope for the EU to respond to unexpected emergencies;

9. Insists that NextGenerationEU repayments should not lead to the reduction of future EU investments in industrial competiveness which supports quality jobs, research, space, digitisation and clean, secure and affordable energy for businesses and citizens; opposes the use of research decommitments for interest payments under the EURI; calls for Member States to reach swift agreement on additional and genuine ‘Own Resources’ as part of the overall agreement on the next MFF, which would make the annual EU budget less reliant on contributions from Member States and in a much better position to start repaying the common borrowing agreed for NextGenerationEU;

ANNEX: DECLARATION OF INPUT

The rapporteur for opinion declares under his exclusive responsibility that he did not include in his opinion input from interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register, or from representatives of public authorities of third countries, including their diplomatic missions and embassies, to be listed in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.