Von der Leyen moves to merge green, defence, space funds in new EU budget law
The blueprint for a long-awaited European Competitiveness Fund (ECF) as part of the bloc's coming seven-year spending plan is the Commission's flagship reform to revamp Europe's productivity gap.
The aim is to create a dedicated funding pot to help catch up with the US and China across the 2028-2034 budget. The draft regulation contains no numbers, but says the ECF will merge activities under up to 14 different budget lines listed in the current €1.2 trillion seven-year budget.
Those include the Innovation Fund, Digital Europe Programme, and the €2 billion component of the Connecting Europe Facility (CEF) dealing with digital projects. It also covers the European Defence Fund, the Act in Support of Ammunition Production (ASAP), the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA), the European Defence Industry Programme (EDIP), EU4Health and the European Space Programme, satellite programme IRIS², and InvestEU.
The huge new cash pot will aim to plug some of Europe's investment gap by using public funds to free up larger amounts of private capital, according to the document.
However, the biggest EU programmes remain outside the consolidation effort or are absorbed only in part. For example, Horizon Europe (€93 billion), a big part of the Innovation Fund (€40 billion) and the bulk of the Connecting Europe Facility (€20 billion) dealing with transport and energy projects, will remain mostly outside the ECF.
(jp)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Euractiv
2 hours ago
- Euractiv
Commission looks to expand ‘cash-for-reform' scheme on rule of law issues
The EU's justice chief stressed the need to tie EU funds to resilient and independent national judicial systems, as the European Commission presented its annual assessment of the rule of law across member states on Tuesday. With judicial independence weakening and civic space shrinking in parts of the bloc, the European Commission is exploring ways to expand existing mechanisms that condition access to EU funds on rule of law reforms, according to its newly released Rule of Law Report. Presenting this year's report, EU Justice Commissioner Michael McGrath said the EU's next long-term budget, known as the Multiannual Financial Framework (MFF), should be used as a tool to help protect judicial independence across the bloc. 'What's important (…) is that we have appropriate rule of law conditionality safeguards built into the MFF architecture, along with a clear link to the recommendations in the Rule of Law Report,' McGrath told Euractiv in a closed-door interview with journalists on Tuesday. The Commission is due to present its proposal for the next MFF on 16 July. European Commission President Ursula von der Leyen has previously indicated that the EU budget starting in 2028 would require member states to reform in order to access EU funding. In connection with the new report, a senior EU official acknowledged that 'cash-for-reform" scheme had proven 'extremely helpful' in advancing rule of law objectives. The Recovery and Resilience Facility (RRF), launched after the COVID-19 crisis, marked the EU's first large-scale use of conditional funding, tying disbursement of grants and loans to concrete national reforms on rule of law. Usual suspects Now in its sixth year, the Rule of Law Report provides an annual snapshot of justice systems, anti-corruption frameworks, and media landscapes. It includes tailored recommendations aimed at addressing democratic backsliding. The 2025 edition, spanning more than 800 pages and published on Tuesday, acknowledges some progress but warns that member states must do more to protect civil society, media freedom and judicial independence. The report find that EU countries have made progress, albeit slower than in the previous year. The 2024 report found that member states had made positive progress on 68% of 2023's recommendations, while only 57% of last year's recommendations had been fully or somewhat implemented this year. McGrath attributed the slowdown to the efficacy of the Rule of Law Report. 'The low-hanging fruit has been picked at this stage,' he said. The report delivered particularly critical assessments for Hungary, Poland, Italy, and candidate country Albania. In Hungary, the Commission noted that aside from modest pay increases for judicial staff, 'no progress' had been made in all other areas. Italy drew criticism for relaxed rules on political campaign financing. Similarly, last year's report gave low marks to Hungary, Slovakia, and Italy. On Tuesday, McGrath declined to speculate on whether more countries could face frozen funds due to rule of law violations in the future. 'Our goal is not to increase the number of member states that are subject to conditionality,' he said. The aim is to achieve 'the highest standards possible throughout the European Union in relation to the rule of law'. (de)
Euractiv
5 hours ago
- Euractiv
Libya kicks out EU migration delegation in diplomatic blow-up
A visit by the interior ministers of Italy, Greece, and Malta and the EU's Migration Commissioner Magnus Brunner was abruptly scrapped upon arrival at Benghazi's Benina airport, as Libya declared the delegation persona non grata . Tuesday's planned visit, intended to launch new migration talks under the EU's Team Europe framework, was blocked by Libya's eastern-based government, which accused the delegation of violating national sovereignty, bypassing diplomatic protocols, and ignoring entry procedures for foreign officials. In a statement, Prime Minister Osama Saad Hammad slammed the visit as a 'flagrant contravention' of international conventions and Libyan law. Sources in Athens estimate that the blockade is linked to the fact that the European delegation first visited Tripoli – the seat of Libya's internationally recognised government. The European Commission did not immediately respond to a request for comment. Sarantis Michalopoulos contributed to this report (mm)
Euractiv
7 hours ago
- Euractiv
EU gives green light for Bulgaria to join euro
EU finance ministers gave the final green light on Tuesday for Bulgaria to adopt the euro on the first day of January 2026, nearly 19 years after the country joined the European Union. "We thank all institutions, partners and everyone whose efforts made this landmark moment possible. The government remains committed to a smooth and effective transition to the euro in the interest of all citizens," Bulgarian Prime minister Rossen Jeliazkov wrote on X. In adopting the legal texts necessary for the move, EU finance ministers officially set the euro at 1.95583 Bulgarian lev. "Joining the euro area is much more than just about replacing lev with euro. It is about building a brighter and more prosperous future for Bulgaria and its citizens at the heart of Europe," EU economy chief Valdis Dombrovskis said after the approval, adding that the common currency will bring new opportunities, investments, jobs and growth. The European Commission last month said the EU's poorest country had fulfilled the strict conditions to adopt the euro, while the European Central Bank (ECB) also gave a positive opinion. The rocky road to the euro Bulgaria's journey to joining the eurozone has had a stormy political backdrop with seven elections in three years - the last in October 2024. But recent polls show Bulgarian society remains divided on the euro, with experts attributing the scepticism largely to fears of rising prices and declining purchasing power. President Rumen Radev shocked many when he proposed holding a referendum on the matter but that was given short shrift by the Bulgarian parliament. Since June, protesters have gathered in Sofia to call for "keeping the Bulgarian lev". A symbolic protest camp with several tents has been set up near the presidency and the Bulgarian National Bank in the capital. Far-right opposition parties have used the issue to promote anti-EU narratives. Proponents in Bulgaria, however, insist the move will help improve the country's economy, and reinforce its ties to the West and protect against Russia's influence. "The political benefits are becoming increasingly significant, as the protests against the euro seem to bear the mark of the Kremlin," 43-year-old musician Veselin Dimitrov told AFP in Sofia. Euro club gets bigger The green light comes as the euro has been gaining in value against the US dollar as President Donald Trump's protectionist trade policies shake trust in the US currency. The euro was launched on 1 January 2002 with 12 countries, including France, Germany, Italy, Spain and Greece. Since then, it has expanded to include Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), Lithuania (2015) and Croatia (2023), bringing the total number of countries to 20. Bulgaria wanted to adopt the euro sooner but Brussels judged its inflation was too high to meet the necessary criteria. EU states that want to join the single currency must demonstrate that their economy has converged with other eurozone countries and that they have their finances under control. The conditions include holding inflation to no more than 1.5 percentage points higher than the rate of the three best-performing EU countries. When Brussels gave its backing in June, it said Bulgaria's average inflation rate during the 12 months to April 2025 was 2.7%, just below the needed level.
