On 27 May, European Commission published its proposal for a powerful, modern and revamped long-term EU budget (MFF, or multiannual financial framework) that will serve European economy struggling with the aftermath of coronavirus pandemic.

logo of the Commission's proposal for the 2021-2027 Multiannual Financial Framework

New technologies have already shown to be irreplaceable during the crisis; they kept people connected and businesses running.  Now, digital will play a crucial role in propelling the recovery and as such, the sector will benefit from significant funding proposed by the Commission. Paving the way are instruments such as Digital Europe programme and Connecting Europe Facility, however other programs, including Horizon or Creative Europe, are sprinkled with digital flavour.

The entire budget of the new MFF now stands at €1.1 trillion. In addition to that, the Commission also proposed a new recovery instrument, called Next Generation EU – worth €750 billion that will run from 2021-2024. This instrument will also feed into some of the digital strands (for example of Invest EU programme). All this makes the next EU budget very large and complex. 

How will it feed the digital sector? Here are the main programmes:

Digital Europe Programme

Digital Europe programme (DEP) is the central programme that aims to accelerate the recovery and drive the digital transformation of Europe.

It will strengthen investments in supercomputing and data processing capacities and build-up and reinforce core artificial intelligence (AI) capacities such as a data resources and libraries of artificial intelligence algorithms and make them accessible to all businesses and public administrations. It will improve cybersecurity, ensure that the current and future labour force can easily acquire advanced digital skills, and expand the best use of digital capacity in EU’s society and economy.

DEP is fine-tuned to fill the gap between research and deployment of digital technologies, and to bringing the results of research to the market - for the benefit of Europe's citizens and businesses, and in particular SMEs.

Connecting Europe Facility - Digital

Connecting Europe Facility supports trans-European networks and infrastructures in the sectors of transport, telecommunications and energy.  It is investing in broadband networks, which is a part of EU’s wider efforts to build infrastructure that can handle emerging and future processes and applications

Horizon Europe

Horizon Europe is the EU’s next funding programme for research and innovation that will continue the work of Horizon 2020. It will be reinforced to fund vital research in health, resilience and the green and digital transitions.

It includes a dedicated budget for "Digital and industry" to develop research and high-end innovation in enabling technologies (artificial intelligence and robotics, next generation internet, high performance computing and big data, key digital technologies, combining digital with other technologies). Overall, it is expected that around 20% of Horizon Europe feeds into digital agenda.

Several thematic areas addressed by Horizon Europe and the Digital Europe programme seemingly overlap, however their expected outputs are different and complementary.

While Horizon Europe will be supporting research and technological development, the Digital Europe programme, on the other hand, will focus on large-scale digital capacity and infrastructure building, with the objective of wide uptake in the market and deployment of digital solutions.

InvestEU

InvestEU will provide crucial support to companies in the recovery phase and ensure a strong focus among private investors on the Union’s medium- and long-term policy priorities, in particular the European Green Deal and digitalisation.

Part of this programme that will feed into digital goals stands now at around 16%. 

Creative Europe Media 

The MEDIA Sub-programme of Creative Europe is designed to support European film and other audiovisual industries. It provides funding for the development, promotion and distribution of European works within Europe and beyond.

EU4Health

EU4Health is a new programme intended to strengthen health security and prepare for future health crises. Approximately 10% of this programme will be used for digital transformation of the health sector. 

Recovery and Resilience Facility

Supporting digital transformation will also be important for building resilience and advancing recovery.

Recovery and Resilience Facility is a new programme that will offer financial support for investments and reforms, including in relation to the green and digital transitions and the resilience of national economies. It will be linked to the European Semester. 

The Commission has proposed that each recovery and resilience plan include a minimum level of 20% of expenditure related to digital.

Read the press release: Commission presents next steps for Recovery and Resilience Facility

Next steps

Adoption of the revised Multiannual Financial Framework 2021-2027 is expected to happen in December 2020 with the final step being the consent of the European Parliament.

Implementation starts in January 2021.