The European Committee of the Regions (CoR) has adopted an opinion on the proposed European Competitiveness Fund (ECF) during its plenary session, highlighting the crucial role of local and regional authorities in strengthening Europe’s competitiveness. CoR members welcomed the proposal to establish the ECF as a response to the challenges identified in the Draghi report on the future of European competitiveness, while stressing that the new instrument must fully involve regions and cities and preserve effective tools that support innovation and industrial development across Europe.
The opinion emphasises that competitiveness policies must be both market-oriented and place-based, ensuring that the EU’s strategic investment agenda builds on the strengths of regional ecosystems. Local and regional authorities are not only beneficiaries of EU funding but also key enablers of innovation, bringing together research institutions, universities, businesses, SMEs and civil society actors to translate European priorities into concrete projects on the ground.
Rapporteur Pehr Granfalk (SE/EPP), Member of the Solna Municipal Council, said: “Greater simplification must never be synonymous with greater centralisation. As we shape the next Multiannual Financial Framework, we must remember that the EU budget is much more than a financial instrument – it is Europe’s strategic investment plan to strengthen competitiveness. To succeed, it must work for all territories and fully involve local and regional authorities, which are essential partners in delivering innovation, industrial development and sustainable growth across Europe.”
The rapporteur proposes a definition aligned with the work of the IMCO Committee in the European Parliament: competitiveness should refer to measures that lead to increased economic growth, innovation, territorial resilience and productivity within the internal market – as well as better quality and better price–value ratios for products and services.
In its opinion, the CoR calls for a strong place-based dimension in the future European Competitiveness Fund. Members underline that renewed Smart Specialisation Strategies should play a central role in aligning EU competitiveness priorities with regional industrial strengths and innovation ecosystems. The opinion also stresses the need to safeguard territorial cohesion as a core EU objective, proposing that the ECF incorporate a “do no significant harm to cohesion” principle and include ex-ante territorial impact assessments for its work programmes and funding calls.
Local and regional leaders further emphasise that regional innovation ecosystems are essential for Europe’s competitiveness. They call for stronger support to regional networks that connect universities, research centres, businesses, SMEs and start-ups, and for EU investments to be better aligned with the needs of local industrial actors. The CoR also urges the inclusion of local and regional representatives in the governance structures and advisory boards of the ECF, ensuring that the fund reflects territorial realities and strengthens synergies with public investments on the ground.
The opinion highlights the importance of ensuring accessible and transparent funding procedures, particularly for SMEs and smaller innovators that often act as testing grounds for new solutions. It also calls for stronger cooperation with regional promotional banks and financial institutions and for better coordination between the ECF and other EU programmes such as Horizon Europe, the Connecting Europe Facility and National and Regional Partnership Plans.
CoR members also underline that Europe’s competitiveness must go hand in hand with industrial decarbonisation, climate adaptation and the deployment of clean technologies. They call for continued support for the LIFE programme with a strong focus on projects led by local and regional authorities and stress the need to strengthen regional preparedness for climate-related disasters.
Finally, the opinion highlights the role of regions in advancing digital transformation, health innovation, defence industrial ecosystems and space policy, including through sustained support for decentralised initiatives at regional level and the creation of an AI Fund for local and regional authorities to accelerate the uptake of artificial intelligence across Europe’s territories.
By strengthening the role of regions and cities within the future European Competitiveness Fund, the CoR stresses that Europe can build a more resilient, innovative and competitive economy that benefits all territories.
