Wrangling over the €70.2 billion programme has been going on for more than a year in Brussels, building towards a scheduled programme start in January 2014. But so far, a clash between the three main parts of the EU decision-making process – the European Commission, the Parliament and the Council (led currently by the Irish government) – has held up agreement on the legislation.

While lead representatives of the European Parliament and EU governments concluded talks on the EU’s overall budget, the Multiannual Financial Framework (MFF) on June 19, the €960 billion package still needs to be approved by the member states in Luxembourg next Tuesday and by a majority of the European Parliament. Approval from MEPs, who rejected the MFF as originally proposed in March, is far from a foregone conclusion, with Hannes Swoboda, President of the Socialists and Democrats Group tweeting last night “EU budget: no agreement yet. I will discuss the last Council offer carefully in the S&D group. I cannot be blackmailed.”

Irish officials, speaking on background to journalists June 17 before entering the next round of negotiations, said it’s unlikely the Council’s figure for Horizon 2020 of €70.2 billion will see any change.

Reimbursement of Costs

Presidency officials say the biggest source of dispute over the past months has been the simplified funding model proposed by the European Commission, but reaffirm the position of the Competitiveness Council from May 30 that this is a “red line for the Council”. They do not envisage a departure in the negotiations from the simplified reimbursement model of 100 per cent of direct costs plus a 25 per cent flat rate for indirect costs. They also see signs that the R&D community is accepting the changes, saying “the more the Commission talks to the research institutes about the simplified model, the more comfortable they are with it.”

Council’s Compromises

The Presidency’s aim of an agreement next week must rest on confidence that other flexibilities will be enough to satisfy those in the Parliament for whom full reimbursement was also a red line. They say the Council has “taken a number of steps towards meeting the Parliament”, for example: 

• Council has agreed to a dedicated instrument budget for SMEs. While the European Parliament wanted 4 per cent, Council has agreed on 2 per cent.
• While the Council “really resisted” the fast track to innovation proposed by the European Parliament, they have now agreed to put in “pilot projects to test the methodology”
• Council has agreed to more “visibility in the budget” for specific measures dedicated to widening participation in Horizon 2020 - for example twinning of institutions and staff exchanges between rich and developing regions of Europe. This will not be part of the “excellence in science” pillar, but will have its own independent standing and receive 1 per cent of the Horizon 2020 budget.
• Council has agreed to a nine month “time to grant” figure. Presidency Sources sources say that while the European Parliament wanted it lower, the European Commission says any less time would “undermine the selection procedure”. Sources say the trilogue may compromise on a lower target and then try to reach an average of nine months.

Overall Budget

While the Presidency does not imagine the €70.2 billion figure will change, the agreement reached last night allows for a new flexibility between subject areas and years to ensure more efficient use of EU money.  The package also foresees a review of the seven year budget before the end of 2016. Both of these provisions could see more funds being directed towards Horizon 2020.

While the figure of €70.2 billion is “put in brackets” until the MFF is agreed upon, the percentage figures attributed to each priority will stay the same. Presidency sources see this as an increase in funding for research in Europe, saying around 17 per cent of the budget will go to the European Research Council, “the golden standard for European research”. While the International Thermonuclear Experimental Reactor (ITER) will have separate budget lines, Presidency sources admit that the budget for the European Institute of Technology and part of the Competitiveness and Innovation Framework Programme will be part of the Horizon 2020 budget, which means the budget increase from Framework Programme 7 is less than it would appear on a direct comparison.