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Not on the agenda, yet

Horizon 2020 could still provide the basis for a bold industrial policy

In ordinary times, last Wednesday’s launch of the Horizon 2020 proposal would have provided a fairly accurate pointer to what we can expect in terms of research and innovation funding from the EU for 2014 to 2020. The ponderous seven-year budget process is designed, after all, to ensure both methodical consideration and budget stability.

As everyone knows, these are not ordinary times. Europe’s leaders are aware of the important roles research and innovation may play in averting some future economic crisis. But it is doubtful whether they will even rate a mention between Merkel, Sarkozy and the other leaders as they meet in Brussels tomorrow to try to stop the euro going up in flames.

The Horizon 2020 plan set out by Máire Geoghegan-Quinn on 30 November contains substantial new resources for the European Research Council, a logical approach to the ‘grand challenges’ facing our society, and measures to simplify research programmes for applicants and awardees. But the plan is not as ambitious as it needs to be. If it were, in the current climate of austerity it would be laughed out of court.

Horizon 2020 is instead a series of incremental steps towards more effective funding instruments. It is not the grand reallocation from Europe’s past—agricultural subsidies and structural adjustment—to its future—education and innovation—hinted at by Commission President Jose Barroso and others in the past.

In any case, Horizon 2020 won’t be allowed to stand or fall on its own merits. Like the rest of the EU budget, its fate now rests on the responses to the unfolding debt crisis. Who will be at the heart of a realigned Europe if the Lisbon Treaty is to be replaced or re-negotiated? Where will any emerging ‘two tier’ Europe—a true-euro core and the rest—leave the budget process for the EU itself?

Beneath these immense questions sit some slightly less imense ones. If the technocracy is to assume supervision of member states’ budgets, how will it be held accountable? Could the European Parliament, so far bypassed by the crisis, assume that role? And how much money will really be left, by the end of 2013, for EU programmes?

We only know that there won’t be much—and that the need to channel what there is towards future priorities is barely on our leaders’ agenda. It is perhaps inevitable that they ignore Horizon 2020, it is only a fraction of public support for research and innovation. But, however keen some countries still are on research spending, for now the euro-crisis rules.

That must surely change in 2012, because much of Europe is simply not competitive. When they address competitiveness, political leaders like best to talk about lower wages and deregulation. But what’s really needed is industrial policy, which had fallen out of fashion but, driven by the current successes of China and Brazil, is making a global comeback.

If Europe had an industrial policy, Horizon 2020 would play a major part in it. Last week’s proposal is a welcome start, but it falls far short of what Europe needs in these desperate times. For Europe has to plan to modernise, now, or face an irreversible decline in wealth and influence.