GROWTH - European Competitiveness Fund: helping Europe invest smarter, compete stronger and respond faster to geopolitical challenges

On 16 July, the European Commission proposed a European Competitiveness Fund as part of the EU’s next long-term budget. With a budget of €234 billion, combined with Horizon Europe (€175 billion), it brings together €409 billion to accelerate strategic technologies in Europe. Representing 21% of the future EU budget, the fund will leverage financing tools and guarantees to maximise its impact. Its goal is to consolidate existing competitiveness funding into one powerful instrument supporting the entire investment chain—from research to manufacturing and deployment. Beneficiaries will include SMEs, startups, scale-ups, research institutions, and a wide range of actors from sectors strategic to the EU’s competitiveness. The fund aims to strengthen Europe’s investment culture, attract private and public capital, and boost resilience. It will also enable Europe to react faster to geopolitical challenges, make smarter investments, and reinforce Europe's global competitiveness.

Date: 19/09/2025

The fund's creation is rooted in the need for a more streamlined, impactful, and geopolitically adaptive EU funding model, as highlighted by Draghi’s report recommendations and the Competitiveness Compass.

Key Features of the European Competitiveness Fund

Critical Mass: The European Competitiveness Fund (ECF) aims to transform EU funding by consolidating competitiveness funding into a unified framework that delivers scale, impact, policy coherence, and a seamless investment journey under a single rulebook. With a total envelope of EUR 409 billion, including Horizon Europe, it will provide an unprecedented boost in EU budget support to research, innovation, development and deployment.
Strategic Focus: Prioritising areas of critical importance, the ECF will ensure a seamless transition from research to global production within its four policy windows:

Clean Transition and Industrial Decarbonisation
Health and Biotech, Agriculture, and Bioeconomy
Digital Leadership
Resilience and Security, Defence Industry, and Space

Comprehensive Financial Tools: The ECF will offer a comprehensive funding toolkit for crowding in private investment, be that grants or loans, procurement, or equity investments. Crucially, the proven firepower of InvestEU will leverage public and private investment towards EU priority sectors, working in close cooperation with its implementing partners – the European Investment Bank and other IFIs and national promotional banks. It will help de-risk private investments and catalyse growth, ensuring that innovative ventures find the necessary resources within Europe. The Fund will also support Important Projects of Common European Interest.

4. Inclusive Access: facilitating access to funding for SMEs, start-ups, and scale-ups, with faster procedures and a common Seal for Competitiveness. The Fund will provide a horizontal project advisory, EU for Business Network, business support, as well as dedicated SME actions to increase SME participation and support skills development.

5. Flexibility and agility to react to priorities. The novelty of the fund will be its ability to react quickly, seize new opportunities, and address emerging needs or risks.

Benefits for Businesses

Through its four strategic windows, the ECF will support companies and investors to choose Europe by focusing on:

· Industrial decarbonisation and clean transition: ECF will help to accelerate development and deployment of clean technologies and will support the implementation of the Clean Industrial Deal.

· Digitalisation: The ECF will prioritise investments in frontier technologies, such as artificial intelligence, and quantum, and in world-class and secure digital infrastructure, such as high-capacity networks and AI gigafactories.

· Health and biotech: the ECF can turn the tide by backing breakthrough research, clinical trials and stronger cross-border hubs.

· Security: The ECF aims to guide investment toward more resilient and capable defence industries, while also strengthening Europe’s security by accelerating investment in critical technologies and supply chains. This reduces exposure to geopolitical risks and gives Europe greater control over essential resources.

Next steps 

The Commission will work closely with the European Parliament and the Council to achieve an ambitious, balanced and timely agreement on the next multiannual financial framework and on the ECF and other sectoral programmes.

European Competitiveness Fund - European Commission, EU budget 2028-2034