EUA has published a new review on the European Fund for Strategic Investments (EFSI) focused on its relationship with Horizon 2020 from the perspective of programme efficiency and opportunity cost.
The review is based on an analysis of various conclusions and opinions issued by the European Commission, the European Investment Bank, the European Court of Auditors, and other stakeholders in late 2016. The analysis exposes some worrying trends linked to the potentially overrated efficiency and effectiveness of public investment through EFSI, the lost opportunity for other key RDI programmes such as Horizon 2020 and various side effects including geographical imbalances in investment into regional development. EFSI’s capacity to engage all RDI stakeholders in collaborations is also questioned given the fact that universities across Europe are not allowed to or are restricted from borrowing money (see “One year of EFSI: What's in it for universities? An EUA review," June 2016).
While the long-term impact of EFSI is still to be seen and documented, its immediate implications can already be felt by the university sector. The creation of EFSI and the Guarantee Fund has limited the budgetary flexibility in the 2014-2020 Multiannual Financial Framework and reduced the planned financial allocations for Horizon 2020 by €2.2 billion. Any decrease in the budget of Horizon 2020 directly affects the programme's efficiency and funding rates. The recent EUA member consultation on Horizon 2020 revealed that even top proposals cannot be funded because of the limited call budgets, whereas the total application costs may go as high as 30 to 50% of the distributed budget. Therefore, the opportunity cost of EFSI must not ignore a waste of research ideas and resources under Horizon 2020.
EUA has tabled a series of policy messages and actions aimed at improving the efficiency of Horizon 2020 based on its member consultation. Sufficient and sustainable funding to the Framework Programme (FP) is fundamental to this process. Therefore, the funds diverted from Horizon 2020 to EFSI must be re-invested into the FP grants, which have already successfully proven to be a high-impact pathway to knowledge-based growth and development in Europe.