Poorer EU countries push Paris, Berlin for slice of €234bn industry fund

Poorer EU countries want their small and medium-sized enterprises (SMEs) and regions to get a fair share of the EU’s €234 billion fund to revamp the bloc’s lagging investments, according to a document seen by Euractiv.

Governments are clashing over the design of the European Competitiveness Fund (ECF), a centrepiece of the EU’s €2 trillion long-term budget. The proposed fund is designed to allocate funding based on the merit of funding proposals.

Poland and Italy are among a group of at least nine countries pushing for guarantees that poorer regions and smaller companies get a slice of the new cash pot, irrespective of the strength of their proposals. Berlin and Paris staunchly defend a “merit-based” design, which would mainly benefit their own large, well-resourced companies.

“Malta strongly advocates for the allocation of at least 30% of the ECF, to be dedicated exclusively to SMEs,” reads the document seen by Euractiv, which compiles national comments on the Fund’s design.

In the comments, Poland, Romania, Bulgaria, Croatia, and Greece call for ring-fenced support for SMEs, poorer regions, or both. Athens even floated a minimum SME quota of 50%.

Italy, Portugal, and Czechia called for a similar “balancing” mechanism to stop the fund from de facto benefiting the richest EU economies.

Germany, meanwhile, said that “the text should be further specified towards merit-based award procedures and made more binding.”

Paris “wants the principles of excellence, European preference, and strengthening our strategic autonomy to remain the sole guiding principles for the actions of this fund,” France said.  Both countries are backed by comments from Sweden, Finland, the Netherlands, and Belgium.

The demands from poorer EU countries come as they are already being asked to absorb sizeable cuts to farm and regional subsidies in the Commission’s €2 trillion budget proposal, and are looking for compensation in other parts of the budget.

German ambassador to the EU, Thomas Ossowski, has threatened to further cut those subsidies if the merit-based design of the competitiveness fund is called into question.

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