MFF Watch 2028–2034

As the EU institutions and Member States dive into negotiations over the next long-term budget - the EU 2028–2034 Multi-annual Financial Framework (MFF) - we are kicking off a special series exploring what's at stake.

From healthcare and digital to defence, green innovation and skills, we'll unpack how the new funding cycle will shape Europe's priorities and open fresh opportunities for innovators, industry and the public sector.

Our goal: to help our clients and our extended community understand where EU money will flow, position early and engage in shaping the next chapter of EU's investment agenda.

This week, we dive into digital transformation:

What does the proposed MFF mean for Europe's digital innovators, technology providers and investors driving the continent's competitiveness and sovereignty?

Europe's Digital Transformation enters a new phase

Digitalisation remains a strategic cornerstone of the EU's policy agenda, but in the 2028-2034 MFF proposal, it enters a more ambitious, structured and investment-oriented phase, aiming for greater coherence and efficiency – at least on paper.

The European Commission presents digitalisation as both a driver of competitiveness and a foundation of technological sovereignty, projecting a significant rise in investment across multiple programmes, amounting to € 54.8 billion - a fivefold increase compared to the combined 2021–2027 budgets of the Connecting Europe Facility – Digital and Digital Europe Programmes. It's critical to note, however, that this figure is more a reflection of the Commission's broader policy aspiration than describing a confirmed budget line. It combines direct EU funding with national co-financing and private leverage expected under instruments such as the European Competitiveness Fund (ECF).

As we'll see below, this – combined with a significant structural reconfiguration – means that, for stakeholders, the consequences will depend less on headline numbers and more on access pathways:

• Opportunities may widen for technologies aligned with Europe's strategic priorities - notably AI, semiconductors, quantum, cybersecurity, advanced connectivity - as the ECF and IPCEIs become critical channels.
  
• At the same time, the visibility of digital investments may evolve: under the current MFF, initiatives were channelled through the dedicated Digital Europe Programme (DEP), whereas in the next cycle, those activities will be consolidated within the broader ECF. This integration reflects the Commission's drive for simplification but also means that digital funding opportunities will be integrated within wider industrial and technological envelopes rather than under a single, easily identifiable programme.
  
• For industry and investors, this evolution points to larger cross-sectoral projects with a stronger industrial dimension.
  
• For smaller research actors or SMEs, success may hinge on partnerships and early positioning within these large frameworks.

How digital fits into the EU's next budget vision

1. Formal shift from fragmented to integrated

The Commission frames the proposed consolidation of 52 programmes to 16 as a move designed to align research, innovation, and industrial policy.

Under the proposed simplified architecture, digitalisation will be funded primarily under the heading 'Competitiveness, Prosperity and Security' (which has a proposed budget of €589.6 billion). This heading brings together programmes that were previously separate – notably Horizon Europe, Erasmus+, space and industrial programmes, and, crucially, the Digital Europe Programme, which will now be incorporated into the ECF.

In parallel, the Competitiveness Coordination Tool (CCT) will serve as the mechanism to coordinate EU and national investments under the ECF, aiming to improve consistency and avoid duplication.

For stakeholders, this 'coherence' translates into simpler navigation across funding streams and potentially fewer overlaps between R&I and deployment instruments. In practice, this could mean more predictable pipelines for technologies progressing from early research (via Horizon Europe's FP10) to scale-up and industrial use (via the ECF). However, it also means that digital investment will no longer be channelled through a single, branded entry point such as the Digital Europe Programme. Applicants will need to identify opportunities embedded across broader funding areas, often linked to industrial or cross-sectoral objectives.

2. Strategic autonomy and operational pragmatism

The new MFF reflects the EU's focus on technological resilience and sovereignty a concept at the heart of its competitiveness agenda. The objective is to strengthen Europe's capacity to develop and deploy critical digital and industrial technologies such as semiconductors, AI and cloud infrastructure within its own ecosystem.

In recognition of immediate needs and the EU's current position in the development of these technologies, there is a growing sense that a more pragmatic approach may be necessary.

On the one hand, sovereignty is an absolute priority for the EU, and in the proposed MFF, and funding access is, for now, set to be restricted to EU-only companies when it comes to many critical digital sectors. On the other hand, however, Commission officials concede that in areas such as AI infrastructure and computing capacity, reliance on non-EU technologies remains unavoidable in the short term. The challenge, and opportunity, lies in turning this interdependence into leverage, building domestic capability while maintaining openness to cooperation and shared standards.

The European Competitiveness Fund: the flagship for digital Europe

The European Competitiveness Fund is the main new investment instrument proposed to support Europe's technological and industrial competitiveness. It consolidates multiple existing programmes, including the Digital Europe Programme and the digital strand of the current Connecting Europe Facility, into a single structure with the aim to be more flexible and allow combining grants, loans, guarantees and equity.

With a total budget of €450 billion, the ECF is designed to consolidate funding across digital, space and defence priorities. The MFF proposal does not design the ECF as a replacement for all EU programmes but rather as a central funding pillar within the 'Competitiveness, Prosperity and Security' heading. Instruments such as FP10 (the successor to Horizon Europe) and Erasmus+ will continue to operate alongside the ECF, which will become the primary channel for market oriented and industrial scale investments in strategic technologies.

The Fund's Digital Leadership window (€54.8 billion) will focus on:

• Development and deployment of AI, quantum computing, semiconductors, 6G, cybersecurity and data infrastructure;
  
• Support for multi-country projects under IPCEIs;
  
• Consolidation of the EU's industrial and technology value chains;
  
• Dual-use innovation across civil and defence domains;
  
• Continued support for digital public services and common EU data spaces.
  

For stakeholders, the ECF's creation implies fewer but larger funding channels and a stronger focus on strategic technologies with industrial potential. It may open access to combined forms of financing beyond traditional grants, while placing greater emphasis on alignment with EU-level competitiveness objectives. The extent to which this integrated approach simplifies access will depend on how the Competitiveness Coordination Tool aligns EU and national funding, once operational.

FP10: shaping the next wave of innovation

The Competitiveness Coordination Tool

The Competitiveness Coordination Tool (CCT) is a proposed mechanism to coordinate EU and national investment in research, innovation, and industrial policy. Within FP10, it is expected to help identify priority technologies and ensure that funding under the Framework Programme and the European Competitiveness Fund moves in the same strategic direction. While its design is still taking shape, the CCT could link early-stage research with industrial deployment.

For participants, the combined effect of FP10 and the emerging CCT could bring greater predictability and alignmentacross funding. However, the extent of these benefits will depend on how the CCT is governed and the degree to which Member States commit to joint priority-setting within this new framework.

IPCEIs: large-scale industrial innovation in digital technologies

• IPCEI on microelectronics (often now referred to simply as 'chips'): supporting the EU's advanced microelectronics ecosystem and secure supply chains
• IPCEI-AI: developing a federated European AI infrastructure connecting data centres, HPCs and AI Factories, and supporting open-source foundation models
• IPCEI-CIC (Compute Infrastructure Continuum): building the EU's sovereign computing backbone linking cloud, edge and data services

Together, they will translate the EU's strategic autonomy goals into concrete investment pipelines for AI and advanced computing.

National and Regional Partnership Plans: digitalisation at country level

The proposed National and Regional Partnership Plans (NRPPs) intend to merge cohesion, agricultural, and recovery instruments into a single planning framework designed to give Member States more flexibility. Digitalisation is positioned as a horizontal enabler across five objectives: competitiveness, green transition, inclusion, security and governance. In practice, Member States are likely to use NRPPs to:

• Modernise public services through digital tools and e-government solutions
• Support businesses, especially SMEs, in adopting digital technologies
• Improve connectivity and data infrastructure, including broadband and 5G
• Strengthen cybersecurity and digital resilience at local level
• Align investments with EU-wide priorities through the Competitiveness Coordination Tool

Why is this important for you - and why now?

The proposed MFF redefines how digital investment is organised and accessed: the shift from standalone programmes to integrated instruments means that funding logic, eligibility, and visibility are being rewritten in real time.

For businesses, research actors and public authorities, the coming 18 months are therefore critical. Negotiations in 2025–2027 will determine the rules, priorities, and governance of these instruments, and those who engage early will shape, not just follow, the new framework.

Acting now means:

• Positioning within EU flagship initiatives (e.g. IPCEIs and ECF Digital Leadership projects) before participation criteria are fixed;
  
• Engaging in consultation processes shaping FP10 and NRPPs to ensure alignment with your technologies and market focus;
  
• Mapping how national co-funding and CCT alignment will influence access and competition in your sector;
  
• Building cross-border partnerships that meet the scale expected under integrated MFF instruments.
  

How we can help

For over three decades, we have guided clients through every MFF cycle, helping them anticipate policy shifts, secure funding and shape EU investment strategies.

Whether you are a European innovator seeking to capitalise on new opportunities, or an international company adapting to Europe's evolving framework, our team can help you navigate and leverage the next MFF for your strategic goals.

Let's work together to shape your future in Europe's digital investment landscape.

Key takeaways

Digital investment strategically reframed and expanded: a projected fivefold budget increase combined with an integrated and flexible framework and importance governance changes target sectors of strategic importance to the EU.

The ECF becomes the central investment pillar for strategic technologies: the European Competitiveness Fund consolidates the Digital Europe Programme and CEF Digital programmes, among others, centralising industrial-scale investment in digital, space and defence.

The future funding continuum links research, industrial deployment, and national investment: FP10, the ECF and NRPPs, linked by the Competitiveness Coordination Tool, form an updated and restructured continuum going from early research to deployment and territorial implementation.

Strategic autonomy meets economic realism: the EU seeks to build strategic autonomy in critical technologies while acknowledging continued reliance on non-EU compute, AI and cloud capacity.

Governance and access in digital funding are moving toward greater centralisation: the proposals suggest a more Commission-driven and nationally coordinated model, similar to the RRF approach. The outcome of the 2025–2027 consultations between the Commission and local authorities will determine whether this shift takes hold and how Europe's digital funding is governed and allocated across programmes.

Early engagement determines effective positioning and access to funding: the evolution of the MFF proposal during 2025-2027 will define eligibility and governance; early engagement will be essential to shape and access future funding streams.