European Competitiveness Fund: Fast-tracking European champions and ensuring a level playing field

Creating a political and funding instrument to promote competitiveness has been the long-standing wish of the European business community and finally competitiveness is the compass guiding the EU’s economic direction. Following the Competitiveness Compass and concrete initiatives such as the Omnibus Simplification Packages, the European Competitiveness Fund (ECF) proposal marks a strong step toward restoring Europe’s leadership back at the global economic scene.

The overarching approach of the ECF – to strive for prosperity through competitiveness, sustainable business and a resilient economy – is highly commendable for its ambition and potential to address EU challenges. Funding is thus rightly aimed to enhance innovation, skills, technological capacity and productivity, as well as access to resources, market uptake and upscaling. However, this focus must be consistently maintained also in future funding decisions.

The ECF is a flexible and innovative tool designed to quickly address common challenges.  Its success depends on balancing an outcome-oriented with the integration of several existing programmes into four policy windows. However, the windows often act as silos, which can limit cross-sector opportunities such as deep technologies and dual-use innovation. To stay effective, the ECF needs a coordinated approach across all windows, ensuring focus and predictability for beneficiaries. This can only be done in close cooperation with business representatives, and their voice must be heard when decisions are made. Their input should shape transparent, shared award criteria based on competitiveness, excellence, and economic potential, complemented by specific criteria for each thematic area.

The ECF aims to boost its impact by catalysing investment from private and institutional investors, and to make funding tools more flexible and integrated. To close the funding gap, the ECF must work alongside private investment and an environment that encourages innovation, investment and trade. Linking ECF support to funds raised on financial and capital markets – the so-called market referendum – could help mobilise more capital. By doing so, the ECF also contributes to integrating the capital markets and creating a Savings and Investment Union. Business organisations play a key role in making this process work.

In addition to lacking general award criteria, the proposal includes several vague descriptions of specific support targets, leaving room for arbitrary decisions and lobbying advantages. At the same time, the ECF should avoid favouring specific sectors or companies, which could distort competition. The ECF should instead promote a level playing field across the EU and between economic actors. The top ups for Important Projects of Common European Interest provide a good tool for ensuring that Member States have equal opportunities and for encouraging cooperation.

Promoting European champions is the primary goal of the ECF. However, achieving this goal is not possible without enabling and promoting SMEs participation in their value chains. While the focus to SMEs and small mid-caps is welcome, a more precise segmentation is needed to meet their specific needs. To better protect SME interests in access to funding, a network of ‘financial and funding ombudsmen’ should be created in Member States, coordinated at EU level. Project advisory work should be developed with the SME Envoy network and the representative SME organisations, at both EU and national level. In this context, it is not clear what kind of added value the creation of a new ‘EU for Business Network’ would offer.

Furthermore, the role and use of the Competitiveness Coordination Tool in the context of the ECF requires more clarity. The social partners should be involved in the coordination process as well, including whenever public-private partnership decisions are made. Moreover, clear roles and selection mechanisms need to be devised for the various committees and advisory boards.

To conclude, the ECF is an innovative tool to promote competitiveness. To unleash its potential, its implementation should clearly define decision-making roles and cooperation between the European Commission and Member States. Simplification shall be embedded into all the elements of the ECF, from structure and work programmes to application and award procedures, supported by strong digital systems. Making the most of the ECF’s agile design will also require a new administrative mindset and active stakeholder involvement.

By Milena Angelova, member of the EESC Employers' Group and Rapporteur of Opinion INT/1101 Competitiveness Fund.