The European Union picks up the pace

At the start of Ursula von der Leyen’s second term as President of the European Commission, the EU executive has launched a series of initiatives aimed at strengthening the competitiveness, sustainability, and strategic autonomy of the 27. Among the most significant measures are the launch of the Commission Work Programme for 2025, the presentation of the European Competitiveness Compass and the White Paper on Defence, as well as the promotion of industrial agreements and key sectoral plans.

“We closely monitor these and other European Commission communications to understand how they will be integrated into R&D&I funding programmes and what impact they will have on funds,” highlights Camino Correia, Director of the European Projects area and Executive Committee Member at Zabala Innovation. Below, we outline the priorities set by the European Commission, indicating, where possible, the R&D&I project funding programmes in which they will be reflected.

The EU initiatives

European Commission Work Programme for 2025

On 12 February 2025, the European Commission presented its Work Programme for 2025 under the title A bolder, simpler, and faster Union. This plan establishes the political and legislative priorities for the year, focusing on areas such as sustainable prosperity, security and defence, support for citizens, and the reinforcement of the European social model. Additionally, the programme emphasises the intention to simplify EU rules and reduce administrative burdens, thus facilitating the practical implementation of EU policies.

European Competitiveness Compass

With the aim of regaining the EU’s global leadership position against major powers such as the United States and China, the European Commission launched the European Competitiveness Compass. This plan is based on three strategic pillars: closing the innovation gap, advancing decarbonisation, and reinforcing economic security by reducing dependencies. Among the highlighted initiatives are the promotion of artificial intelligence, biotechnology, and space exploration, as well as the creation of a favourable environment for startups and small businesses.

Multiannual Financial Framework and European Competitiveness Fund

In the financial sphere, the European Commission has proposed the creation of a Competitiveness Fund, replacing several existing instruments. This fund aims to support key projects and reforms intended to strengthen Europe’s competitiveness. Additionally, a review of the Multiannual Financial Framework (MFF) has been proposed to align it with the EU’s strategic priorities and provide greater financial flexibility. These measures seek to ensure that European funding adapts to current and future challenges, promoting a more resilient and competitive economy. So far, the European Parliament and the Council have advocated for a separation between the European Competitiveness Fund and the next EU framework programme (FP10).

Clean Industrial Deal

The European Commission has introduced the Clean Industrial Deal, a legislative package aimed at fostering decarbonisation and improving the competitiveness of European industries.

• Strengthening of the Innovation Fund: €6 billion in 2025.
• InvestEU: €50 billion additional.
• New Bank for Industrial Decarbonisation: €1 billion auction.
• Flagship Horizon Europe call: €600 million.
• Erasmus+: €90 million.

CISAF

Within the framework of this agreement, a particularly relevant initiative is the Clean Industrial Support and Acceleration Fund (CISAF), a new European framework for national aid granted by different Member States. The CISAF aims to facilitate the transition to a low-carbon economy, supporting industries in adapting to new environmental requirements and promoting the adoption of clean technologies.

Action Plan for Innovation in the Automotive Sector

With the goal of driving innovation, sustainability, and competitiveness in the automotive sector, the European Commission has introduced a specific action plan, which involves the allocation of budgets from the Horizon Europe programme to foster the development of electric vehicles, improve energy efficiency, and promote research into new mobility technologies.

• Innovation Fund (battery cell manufacturing): €3 billion.
• InvestEU: €200 million additional.
• Over the next two years: €1.8 billion for battery production.

Action Plan for a Decarbonised Steel and Metals Industry

The EU has launched a plan to ensure a competitive and decarbonised steel and metallurgical industry in Europe. This plan includes measures to promote the circular economy in key sectors such as steel, cement, and chemicals, reducing raw material dependence and minimising waste. Additionally, the development of infrastructure for carbon capture, storage, and utilisation is being promoted as an essential tool for the decarbonisation of heavy industry.

• Innovation Fund, third call of the European Hydrogen Bank: €1 billion.
• Research Fund for Coal and Steel: €150 million for 2026 and 2027.
• New Bank for Industrial Decarbonisation: €1 billion auction.
• Flagship Horizon Europe call: €600 million.

RearmEU and the White Paper on European Defence

In the area of security and defence, the European Commission has presented the White Paper on European Defence, which proposes improving investment and coordination in military capabilities. In parallel, the RearmEU initiative has been launched to strengthen European armed forces and the defence industry with a flexible budget, envisaging an investment of more than €800 billion. This plan aims to modernise European defence and reduce dependence on the United States, adapting to an increasingly complex geopolitical landscape.

• New Security Action for Europe (SAFE): €150 billion in capital markets.

Union of Savings and Investments

The European Commission has proposed the creation of a Union of Savings and Investments, aimed at facilitating access to green financing and promoting investment in strategic sectors. This initiative seeks to create new savings and investment products, encourage venture capital, and ensure that investments flow efficiently across the EU. Furthermore, it aims to reduce administrative burdens and simplify the regulatory environment, especially for SMEs, thus fostering a more integrated and resilient financial market.

Proposal for an Critical Medicines Act

This proposal aims to reduce dependence on a few suppliers, strengthen supply chain resilience, and encourage the manufacture of essential medicines in Europe. The regulation will facilitate investments in production, support strategic projects with funding, and streamline regulatory processes. Additionally, it will promote public procurement to diversify suppliers and allow joint purchases among Member States. The law complements the pharmaceutical reform and responds to the shortage of medicines exacerbated by recent crises, such as the pandemic and geopolitical tensions.

Next Steps

Of these initiatives, those not yet adopted will follow different implementation processes. Once the European Commission presents the proposals announced in the European Competitiveness Compass, for example, EU ministers, meeting in various Council configurations, will debate the measures. The next step will be negotiation with the European Parliament on the final shape of the regulations, before both institutions adopt them as EU legislation.

Regarding the next Multiannual Financial Framework, Brussels plans to present its formal proposal in July 2025, aiming for an agreement in time for its application in January 2028, while the creation of the Competitiveness Fund will be addressed in the next EU budget. The adoption of the CISAF, however, is expected to be much quicker, scheduled for June this year. The public consultation for submitting observations will remain open until 25 April.

The measures proposed in the Union of Savings and Investments will be adopted by prioritising those with the greatest impact in 2025. These will include both legislative and non-legislative measures, as well as actions to be formulated by Member States themselves. In the second quarter of 2027, the European Commission will publish a mid-term review on overall progress in achieving this strategy.

As for the Proposal for a Critical Medicines Act, since it is a Regulation, the European Parliament and the Council must reach an agreement on the text before it becomes EU legislation. This process may take anywhere from a few months to approximately two years.