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View from Brussels: R&D’s rough summer

Nerves reached breaking point in Brussels last week when EU leaders sat down to hash out a deal on the bloc’s €1.8 trillion budget for the next seven years. Amid the horse-trading, some key areas suffered quite substantial financial cuts.

Before the coronavirus outbreak hit Europe, heads of government were deadlocked over how big the EU’s next long-term budget should be. Wealthier, northern European countries wanted a smaller war chest, while poorer southern and eastern countries wanted something meatier.

Then the pandemic arrived and any notion of delaying a decision over penny-pinching quickly evaporated, as the virus cost people their lives and jobs. A €750bn stimulus plan was put together as the EU’s main response to the crisis.

When leaders met to broker a unanimous agreement on the budget and recovery fund, the main sticking points were how much of that €750bn should be grants rather than loans and how the money should be managed. Northern countries wanted to keep a firm grasp over the purse strings.

Amid the wrangling over who gets what and what hoops countries will have to jump through, the ratio of grants to loans was brought down to a nearly 50:50 split but, more significantly, the amount of money allocated to key areas like R&D&I and climate adaptation was pared down.

The bloc’s main research tool, Horizon Europe, will be given just over €80bn, which means that for the very first time there will be no budget increase. For the European Research Centre, it is an extremely disappointing situation.

"This flies in the face of what European leaders have been saying, that the way Europe will maintain productivity and competitiveness is through research and innovation," said the ERC’s Janet Thornton of an even earlier proposal that allocated just under €90bn.

The League of European Research Universities (LERU) called it a "historic low for R&I" and a "huge disappointment", warning that it represents "a breach of trust between the academic and political worlds". 

ERC cited a report from 2017 that called for nearly €130bn to be set aside under this budget in order to keep Europe competitive internationally, calling the move "the best investment the EU can make".

It is arguably one of the first examples of major decision-making by the EU post-Brexit that will negatively affect the UK and which was able to pass unobstructed without the threat of a British veto.

The UK wants to maintain ties with the Horizon programme after the Brexit transition period ends in December but as things stand there will be significantly less money to go around.

Despite EU leaders agreeing to ring-fence 30 per cent of the budget for climate spending, a final deal came at a large price for more tangible green policies: a just transition fund - earmarked for carbon-heavy regions to phase out coal mining and clean up industry - was reduced from €40bn down to just €17.5bn.

As an aside, it is perhaps telling to note that the main countries pushing for more ambitious climate policies at EU level - Austria, Denmark, the Netherlands and Sweden - were happy to accept the reduced green spending in return for larger rebates.

The summit was not the end of the story, though, and there might yet be a final twist in the tale. Members of the European Parliament have to sign off on the agreement, and initial signs show that EU lawmakers are not happy at all with the budget.

There are numerous sticking points, including linking cash payments to compliance with the bloc’s democratic principles, and chief MEP David Sassoli has asked "If there is less research, how are we going to be more resilient?"

LERU called on the Parliament to veto the agreement and "prove what they are worth" by demanding the European Council come back to the negotiating table and agree to increase the sector’s budget.

MEPs have flattered to deceive on numerous occasions, threatening to use their veto power over certain areas and demanding large concessions, only to be placated with empty promises and vague reassurances.

This time could be different though, as the reaction to the budget is almost universally one of either disappointment or sheer anger. Negotiations are still ongoing and no date is in place yet for a vote, although a new budget should strictly be in place by 1 January 2021.

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