Lucas Carvalho, Anna Heckhausen · 2026
Fund or Fumble – How to Make the European Competitiveness Fund Work
The proposed European Competitiveness Fund (ECF) represents a material shift in both the design and governance of EU industrial policy. By consolidating fragmented instruments, concentrating resources within strategic policy windows, reinforcing annual work programmes and bringing grants and financial instruments together under a single framework, the ECF could become the anchor of a more coherent industrial policy at European level. Yet crucial elements of the ECF proposal remain politically contested. Fault lines are emerging over the fund’s overall scale, the balance between merit-based allocation and geographical distribution, the depth of strategic prioritisation and the scope of European preference provisions. At the same time, critical governance interfaces – notably between Horizon and the ECF, and between grants and financial instruments – require clearer definition. The ECF must also strike a credible balance between flexibility and effective oversight. Against the backdrop of intensifying negotiations, this paper assesses the European Commission’s proposal and advances recommendations to ensure that the ECF evolves into a genuinely transformative instrument of industrial policy rather than a rebranded consolidation of existing funding streams.
