Reports by the CEPS and SIEPS show how the ECF will reshape EU R&I governance, forcing a balance between competitiveness priorities and global societal missions.
As Negotiations on the European Competitiveness Fund (ECF) and the tenth Framework Programme for research and innovation (FP10, or, conversely, Horizon Europe) will soon begin, legislators face an entirely new governance architecture for research, innovation and industrial policy. With a new Multiannual Financial Framework (MFF) that, for the first time, exceeds the historic 1% of the EU’s Gross National Income ceiling, the next MFF breaks with decades of precedent and will attempt a consolidation of programmes on an unprecedented scale. The ECF will sit at the centre of this transformation. It will merge twelve existing instruments into a single, flexible fund, and reshape the governance of Horizon Europe’s Pillar II by linking its strategic R&I spending directly to Europe’s new industrial and security priorities. Under the ECF proposal, Horizon Europe would continue as a stand-alone programme, but its second pillar would be structurally reorganised around four broad policy windows. The largest of these windows, Resilience and Security, would receive €125.2 billion, signalling a significant shift in policy priorities; the smallest would be Health and Bioeconomy (€20.4 billion).
This restructuring is addressed in the Centre for European Policy Studies (CEPS) new report that looks into sharper governance structures to boost Horizon Europe’s impact. CEPS argues that in FP10, Pillar II will be divided between two fundamentally different missions: on one side, competitiveness, industrial transformation and dual-use innovation; on the other, global societal challenges centred on climate, health, biodiversity, sustainable development and science diplomacy. The original ‘north star’ of Horizon Europe, defined by advancing global public goods, strengthening international cooperation, and promoting science diplomacy grounded in the UN Sustainable Development Goals, is increasingly being pitted against Europe’s urgency to boost productivity, resilience and technological sovereignty. Problems arise at this juncture because the two agendas could perpetuate the issues in current EU R&I programmes, but the CEPS stresses that these two missions are not separable. International collaboration contributes directly to competitiveness, resilience and industrial capacity. The challenge is not to choose one mission over the other, but to build a governance system capable of serving both coherently. The CEPS report therefore proposes the creation of two high-level councils under Pillar II: one dedicated to competitiveness and security, and another to global and societal challenges. These councils would manage the full “lab-to-market” investment journey and ensure that neither mission cannibalises the other’s agenda, a real risk in an R&I environment where defence, dual-use innovation and industrial policy increasingly dominate political attention. The report also reviews existing initiatives and institutions that resemble the proposed mission-oriented councils.
The first proposed council is the Council on Research and Innovation for Competitiveness and Security (CRICS). Its logic reflects mission-oriented agencies around the world, particularly those that link R&I directly to economic or security outcomes. These bodies, inspired by the US Defence Advanced Research Projects Agencies (DARPA), have clear mandates, high-risk research portfolios, agility in funding and decision-making, and close alignment between public and private incentives. They frequently leverage co-funding from industry to ensure uptake and practical relevance, and they can operate across the civilian/defence boundary. The UK Advanced Research and Invention Agency (ARIA), for instance, is a notable example: a democratically grounded, non-defence-focused, high-risk innovation engine that tolerates failure, uses a wide range of funding instruments and maintains nimble governance. The Federal Agency for Disruptive Innovation (SPRIND) is Germany’s attempt to institutionalise DARPA-style innovation in civilian settings. SPRIND exemplifies an effort to cut through administrative micromanagement, enabling decisions at the speed required for breakthrough R&I and shortening the path from idea to spin-out in less than three years. France and the Netherlands have recently also considered setting up their own CRICS agency, similar to SPRIND, that delivers money faster than conventional funders and pushes innovation by organising multi-stage competitive challenges.
The second body, the Council on Global Societal Challenges (CGSC), responds to an entirely different governance need. Existing institutions, agencies and initiatives that mirror this council’s governance structure combine strategic coordination of R&I for global public goods with mission-oriented governance, risk-tolerant funding and a mandate to strengthen capacity in low- and middle-income countries. CEPS argues that such a council should embed principles of open science, data sharing and science diplomacy at its core, creating a single European institutional platform with global reach. A relevant example is Japan’s Science and Technology Research Partnership for Sustainable Development programme (SATREPS), which leverages Japan’s advanced scientific capacity as an instrument of science diplomacy, coordinating global collaborations on environmental resilience, energy, bioresources, disaster prevention and infectious disease control.
The CEPS report aligns with the Swedish Institute for European Policy Studies (SIEPS) report from September that emphasised that the ECF signifies a governance shift within the EU. The report argues that the ECF is not only a financial merging exercise but also a fundamental shift in EU investment governance: a move towards a single, agile steering mechanism at the political core of the annual EU budget cycle. Decision-making in the ECF would concentrate in the hands of a small set of political actors, those shaping industrial strategy, competitiveness priorities and budget allocations. This marks a departure from the traditional “Brussels effect” of governing through diffuse rules and administrative structures. Instead, SIEPS sees the Commission becoming a more assertive executive actor, capable of shaping industrial outcomes in real time.
The political implications of the current negotiations on FP10 and ECF are therefore profound. Rejecting the ECF would amount, as SIEPS puts it, to a bet on the status quo: a belief that geopolitical disorder will subside, and that no major industrial or security shocks will challenge Europe’s position. Accepting the ECF, by contrast, means betting on Europe: embracing a more centralised executive capacity and enabling the EU to act as a coordinated industrial policy player. A third path remains open to hedge by adopting the ECF while retaining significant national control, thus diluting the very efficiency gains that the ECF is designed to deliver.
Taken together, the CEPS and SIEPS reports point to a shared conclusion. Europe’s post-2028 research and industrial landscape is being rebuilt around two imperatives: competitiveness and global responsibility. The governance structures that emerge will determine whether the EU can balance these missions, retain coherence across the “fund galaxy”, and respond decisively to geopolitical, technological and environmental challenges.