Negotiators Reach Informal €70 billion Agreement on Horizon 2020

Today’s trilogue session marks the end to “many hours of intense talks”, said Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science. "We now have a deal on Horizon 2020, a world-class research and innovation programme to drive economic recovery and job creation, said Parliament's Industry, Research and Energy Committee chair Amalia Sartori.

Wrangling over Horizon 2020 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. With an original budget proposed by the Commission of €80 billion, Seán Sherlock, Irish Minister of State for Research and Innovation, speaking to journalists after the final inter-institutional meeting, said there had been a “high-level political agreement in principle” of “circa €70 billion”.

" I am very happy with the deal we got today. We have managed to keep as much money as possible on the table for science, with a focus on excellence. I hope MEPs can get behind this," said Vicky Ford, MEP for the East of England.

Reimbursement of Costs

“The funding model for Horizon 2020 has been radically simplified,” said Sherlock, confirming that the simplified reimbursement model of 100 per cent of direct costs plus a 25 per cent flat rate for indirect costs has been agreed upon.

This move towards simplification is “necessary for Europe to grow”, said Sherlock, because it allows for a “greater degree of access to funds for a greater number of institutions”. It ensures “unfettered access to EU funding based on the principle of excellence”. “The Irish Presidency, with the support of the member states, has had a very firm position with relation to simplification,” said Sherlock.  

Presidency officials say this has been the biggest source of dispute over the past months but that the R&D community is accepting the changes, “the more the Commission talks to the research institutes about the simplified model, the more comfortable they are with it.”

Council’s Compromises

Sherlock said the negotiations “have been quite intense and difficult at times”, but welcomes the input of the Parliament, saying “this negotiation has shows how co-decision works - three institutions working together for the people of Europe.” The package agreed upon reflects a number of the Parliament’s original demands, for example:  

• A dedicated instrument budget for SMEs with approximately four percent of the budget.
• A pilot fast track to innovation project, which will then be evaluated.
• 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.
• An eight month “time to grant” target. There will be some exceptions, for example for the European Research Council and for complex project.

Presidency sources see this as an increase in funding for research in Europe, saying around seventeen per cent of the budget will go to the European Research Council (ERC). “"The ERC has been exemplary and I am very glad that this has been protected," said Ford. Marie Curie Actions will also see an increase, receiving approximately eight per cent of the budget.

As well as the specific SME instrument, a statement by the European Conservatives and Reformists Group of the European Parliament says “Some 20 per cent of the funding should go towards small and medium sized businesses.” “Horizon 2020 will focus funding in three separate pillars,” said the group, “excellence in largely academic-based blue-sky research, supporting industrial companies in innovative areas and finally addressing the so called societal "grand" challenges which include food and energy security, climate change and demographic changes.”

Presidency officials say The Excellence in Science pillar will receive approximately 38 percent, industrial leadership approximately 22.5 per cent and societal challenges approximately 38 per cent.  While the International Thermonuclear Experimental Reactor (ITER) will have separate budget lines, 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.

Overall Budget

" The big issue of the EU seven year budget remains”, Ford told Science|Business. “I hope that strong-arming by the Parliament will not de-rail the process." While lead representatives of the European Parliament and EU governments reached an informal deal 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 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 “EU budget: no agreement yet. I will discuss the last Council offer carefully in the S&D group. I cannot be blackmailed.” The final figure for Horizon 2020 will need to be adjusted accordingly, but Sherlock said the programme’s “budget lines are agreed as far as percentages are concerned.”

The circa €70 billion figure for Horizon 2020 may be augmented with extra funds, as the informal MFF agreement reached last week 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.

Next Steps

The package will now be submitted to the full Council and Parliament for approval. It is likely the Parliament plenary vote may not be held until after the summer break. "I think the Plenary will accept this deal, but the bigger question is how it fits into the MFF negotiations," said Ford.

While the European People’s Party and the ECR Group have welcomed the agreement, a statement by the Greens/European Free Alliance Group in the European Parliament says “While the package deal has some good elements and allows for the preparation of the 2014 calls, it lacks the ambition that the European parliament's industry committee wanted to give it.”Philippe Lamberts, MEP and group spokesman said "Regrettably, the Council has chosen to preserve the most backward-oriented components of the EU budget, at the expense of everything that is future-oriented. Furthermore, the budget is accompanied by a funding model that will significantly increase the share of public money in every project compared with the previous Framework programme (FP7). This will reduce the number of projects, which will in turn be more generously funded, including industry research activities (125 % of direct costs) with little regard for state aid rules and weak requirements in terms of access to research results or public policy oriented goals.”

Ford said, "Other MEPs should stop the institutional infighting over the EU budget, lead not by policy but purely by their constant pursuit of more money and more power. They need to get behind the deal agreed by national governments otherwise we risk holding back our scientists and businesses at such a crucial time."