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dossier	COM(2025)555 - Establishing the European Competitiveness Fund ('ECF’), including the specific programme for defence research and innovation ...
bron	COM(2025)555
datum	16-07-2025

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

The European Competitiveness Fund (ECF, the Fund) is part of the post-2027 Multiannual Financial Framework (MFF) package, which aims to consolidate 14 individual funding instruments from the current MFF in one framework to operate as an investment capacity to bolster European competitiveness in technologies and strategic sectors critical to the EU competitiveness from collaborative research to scaling up, innovation, industrial and infrastructure deployment and manufacturing, including skills, and in support of projects and companies including SMEs, start-ups, larger companies, universities and research entities, while acting as a leverage tool employing budgetary instruments to attract private, institutional and national investments.

Over the past thirty years, the productivity gaps between the EU and other advanced economies have widened, rendering the EU less competitive compared to other major economies. The EU is currently lagging in various areas, including technological development, research and innovation performance, infrastructure deployment, market dynamism, and industrial capacity. In recent years, marked by rapid technological advancements, escalating economic competition, control of key enabling infrastructures, and trade protectionism, enhancing the competitiveness of the European Union has become a critical priority. This, and the potential impact it has on our prosperity has been underscored by several recent reports, including Draghi’s Report on the Future of European Competitiveness and the Letta’s Report “Much More Than a Market,” whose recommendations have informed the Competitiveness Compass.

Adopted by the European Commission in January 2025, the Competitiveness Compass ¹ diagnoses significant issues that hinder competitiveness within the EU. A central issue identified is the dispersion of Union spending across multiple overlapping programmes, many of which fund similar initiatives but with differing requirements, complicating the effective combination of funding.

The Compass identifies several key factors necessary to enhance the Union’s competitiveness: (1) closing the innovation gap, (2) decarbonisation, and i reducing excessive dependencies and improving security. Additionally, it highlights five horizontal enablers: (1) simplification, (2) removing barriers in the Single Market, i financing, i skills and quality jobs, and (5) better coordination. Simplification, financing, and better coordination are the primary focus of the European Competitiveness Fund, aimed at addressing challenges such as: (1) suboptimal support throughout the investment journey—from fundamental research and applied research to scale-up, industrial deployment, and manufacturing; (2) high investment needs to meet Union priorities, including the clean and digital transition; and i a complex and uncoordinated Union funding landscape. Addressing these challenges is expected to positively, albeit indirectly, impact other problems identified in the Competitiveness Compass, such as the innovation gap, while also reducing Europe’s dependence on external sources for critical technologies, and resources, thereby enhancing security and resilience.

The ECF is not the sole initiative to strengthen the Union’s competitiveness. It complements other measures announced in the Competitiveness Compass. The present proposal aligns with the Communication on the Road to the Next MFF ² , which outlined objectives for the next Union Budget to be simpler, more focused, more impactful, and capable of addressing current complexities, weaknesses, and rigidities. The Communication also emphasizes that flexibility is key to ensuring the budget’s ability to respond to a changing reality, with a focus on challenges such as enhancing Union competitiveness, which requires joint action within a united Europe. Companies to be covered by the future 28th regime should also be able to benefit from the ECF, especially since this regime aims to simplify cross-border operations and encourage investment within the EU single market.

The ECF will be structured along four policy windows reflecting strategic priorities crucial to Union competitiveness and resilience (from AI and digital to space, from clean tech to biotech, from defence to health). Its open architecture would help the Fund respond quickly to new challenges and priorities by providing overall direction and strategy. This new architecture would allow for the setting of policy priorities at the level of each window, to effectively target support from applied research to manufacturing and deployment, including infrastructure and specific skills, relying on funding tools adapted to the projects’ needs and derisking investment by offering an appropriate leverage/impact ratio of the Union budget. In addition, the self-standing Research and Innovation Framework Programme Regulation (EU) [XXX] ³ of the European Parliament and of the Council [Horizon Europe framework programme for Research and Innovation] will be tightly connected to the components of the ECF to ensure a seamless investment journey from idea to market.

The ECF will flexibly mobilise the entire financial toolbox provided by the Union budget (including loans, grants, equity, quasi-equity, blending, procurement and guarantees). The budgetary guarantee and financial instruments would become available to all the policy windows, making them usable across areas of funding under a single Fund. Synergies with other programmes will also be ensured, thanks to a more integrated approach at strategic level and at operational level. Further to the ECF financial toolbox, the Fund will provide project advisory support throughout the investment cycle to foster the origination and development of projects, support to skills development and provide cross-cutting business support for SMEs and startups facilitating their business growth, access to financing and investments. The integrated structure would also enable synergies with other structural parts of the MFF, such as the National and Regional Partnership Plans Regulation (EU) [XXX] ⁴ of the European Parliament and of the Council [National and Regional Partnership Plans]. The ECF contributes to the competitiveness of the Union and spans over a broad range of policy areas from R&I, digitalisation, space, defence, environment, health, single market support, circular economy to energy transition. The Fund includes activities currently carried out under 14 Union programmes: Horizon Europe (HE) as a self-standing programme but tightly connected to the ECF, Innovation Fund (IF), Digital Europe Programme (DEP), Connecting Europe Facility – Digital (CEF), European Defence Fund (EDF), the Act in Support of Ammunition Production (ASAP), the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA), the European Defence Industry Programme (EDIP), EU4Health, the European Space Programme, IRIS, InvestEU, Single Market Programme (SME Strand) and LIFE (see Annex 7 of the Impact Assessment report for more details of each of these programmes). The size of these programmes today is very diverse, with Horizon Europe being the largest, with EUR 93 billion over 7 years under this MFF (2021-2027), and the Innovation Fund the second largest, accounting for an estimated EUR 40 billion in the period 2020-2030 (funded by ETS revenues under Article 10a(8) of Directive 2003/87/EC).

• Consistency with existing policy provisions in the policy area

The ECF aligns with the objectives outlined in the Communication on the Road to the next Multiannual Financial Framework (MFF), aiming for a more focused, simpler, and impactful budget.

To bolster competitiveness, the ECF will build on the experience with the InvestEU Programme ⁵ which pooled a number of financial instruments under a single, streamlined framework and managed to successfully mobilise public and private financing, using a relatively modest EU guarantee, providing additionality and aligning with Union policy goals.

The ECF will be tightly linked to the 10th Framework Programme for Research and Innovation established under Regulation (EU) [XXX] [Horizon Europe programme for Research and Innovation] through the development of integrated work programmes and a single rulebook in the ECF Regulation. This will be key to ensure a seamless investment journey from research to start-up, scale up, deployment and global manufacturing, from idea to market. JRC direct actions will support the objectives of the ECF policy windows.

The ECF will be coherent with and complementary to the other new funds that will support health-related funding – for activities related to disease prevention and health promotion Regulation (EU) [XXX] ⁶ of the European Parliament and of the Council [Union Civil Protection Mechanism and Union support for health emergency preparedness and response], Regulation (EU) [XXX] ⁷ of the European Parliament and of the Council [Global Europe], Regulation (EU) [XXX] [National and regional partnership plans]. A strong connection between the ECF and the modernised Connecting Europe Facility (CEF) is crucial (Regulation (EU) [XXX] ⁸ of the European Parliament and of the Council [Connective Europe Facility]). Cross-border infrastructure projects on decarbonization, resilience of digital, transport and energy, as well as mobility are vital for improving Union competitiveness, security, and reducing strategic dependencies. There are clear synergies between trans-European networks in energy and transport supported by CEF and projects within the ECF's scope. Cross-border digital connectivity infrastructures that, according to the Draghi report, are vital for Europe to be globally competitive, will be funded under the ECF in order to maximize synergies with the other digital capacities.

Synergies between the ECF on one hand and the Innovation Fund and the Single Market programme on the other hand should be ensured regarding support to:

–industrial decarbonisation and innovation notably in the field of clean technologies (Innovation Fund).

–Digital technologies, pan-European digital public infrastructure and digital solutions in the area of customs and taxation (Single Market programme).

To this end, the ECF shall ensure coherence with actions planned to be implemented under the Innovation Fund and the Single Market programme, notably when developing work programmes. As announced in the Clean Industrial Deal, the Industrial Decarbonisation Bank will be placed within the governance of the ECF.

The Commission should propose by the end of 2025 the legislative framework for the EU Space Systems and their Governance building on the EU acquis of the Space and IRIS² regulations.

Competitiveness will also receive support from Member States’ National and regional partnership plans and external policies. In addition, synergies between the ECF and other Union activities that support policy areas closely linked with competitiveness will be sought. In particular, the ECF will allow for the combination and cumulation of funding for actions supporting the objectives of more than one Union programme. The ECF will also be open to any financial or non-financial contributions supporting the competitiveness objectives, including from Member States, third countries and international organisations. Moreover, support from Regulation (EU)[XXX] [National and Regional partnership plans] to projects that have been awarded the Competitiveness Seal will be facilitated. Synergies and complementarity, from planning to implementation, will be sought in particular with the European Investment Bank Group. The implementation of all these synergy activities will reduce the and reporting and record-keeping requirements for recipients reduced to the minimum necessary.

The ECF should also work in synergy with the new Erasmus+ programme for skills development, and with the objective of implementing the Union of Skills. The funding support from ECF for skills in strategic sectors would be complementary to support from Erasmus+ for building and enhancing skills for quality jobs and lives through life-long learning and talent development, attraction and retention.

• Consistency with other Union policies

The ECF is consistent with the Competitiveness Compass which provided a roadmap for boosting competitiveness, building on the recommendations of these reports. Moreover, the ECF will greatly support the Clean Industrial Deal, which outlined the need to accelerate decarbonisation, reindustrialisation and innovation, bringing together climate action and competitiveness under one overarching growth strategy.

The ECF is also complementary to and will amplify the effects of delivering a Savings and Investments Union. Deeper capital markets will allow insurers, pension funds, banks and asset managers to participate in projects supported by the ECF thus providing savings and investment opportunities for EU citizens to the ultimate benefit of savers and citizens.

The ECF is fully consistent with the Digital Decade Policy Programme 2030, which sets out the Union’s common digital targets and a governance framework to accelerate Europe’s digital transformation across infrastructure, skills, and services ⁹ . In particular, the ECF’s digital investments respond to the gaps and priorities identified in the State of the Digital Decade 2025 report, notably in digital connectivity, advanced computing, and digital skills, supporting the Union’s objective of digital sovereignty

A number of other initiatives are also relevant for the activities deployed under the ECF, including: Critical Raw Materials Act, Net Zero Industry Act, Chips Act, Industrial Action Plan for the European automotive sector, Ecodesign for Sustainable Products Regulation, AI Act, Interoperable Europe Act, Life Sciences Strategy, Advanced Materials Act, Pharmaceutical Package, the Medical Countermeasures Strategy, White Paper on Defence, Economic Security Strategy, Preparedness Union Strategy, the Sustainable and Smart Mobility Strategy and the European Ocean Pact. The ECF is also consistent with the external dimension of competitiveness, with the Union international commitments, including in the area of trade.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

This Regulation lays down an indicative financial envelope for the ECF, including the European Union funding for Clean Transition and Industrial Decarbonisation, for Digital Leadership, for Health, Biotech, Agriculture and Bioeconomy, for Resilience, Defence industry and Space.

Since the ECF constitutes a framework for separate programme basic acts and the concerned policy areas, the proposal relies on a number of separate legal basis, each to be applied to the relevant part(s) of the ECF:

–Article 43(2) TFEU in relation to the pursuit of the objectives of the common agricultural policy.

–Article 168(5) TFEU in relation to relevant activities designed to protect and improve human health by supporting the competitiveness of the health, biotechnology, agriculture and bioeconomy sectors;

–Article 172 TFEU in relation to relevant activities supporting competitiveness through digital transformation in areas of public interest;

–Article 173 i TFEU in relation to activities supporting the competitiveness of the European Union’s industrial base, including support to Small- and Medium-sized Enterprises, specifically to adapt to the new economic challenges in the areas of research, clean and digital transition, health, biotechnology, agriculture, bioeconomy, space, security and defence;

–Article 175 TFEU in relation to the need to continue and improve measures outside the Funds referred to in Article 175 TFEU for activities to improve competitiveness throughout the internal market, including through widening measures, considering economic, social and territorial cohesion;

–Articles 182 i, 183 and the second subparagraph of 188 TFEU in relation to relevant activities supporting research and innovation in the area of defence;

–Article 189(2) TFEU in relation to relevant activities supporting the Unions’ space policy;

–Article 192(1) TFEU in relation to relevant activities preserving, protecting and improving the quality of the environment and activities supporting the transition to clean energy to contribute to climate change mitigation;

–Article 194 (2) TFEU in relation to the functioning of the energy market; security of energy supply in the Union; energy efficiency and energy saving and the development of new and renewable forms of energy; and interconnection of energy networks.

–Article 212 (2) TFEU in relation to activities in support of strategic partners for defence industry;

–Article 322(1), point (a), on the adoption of the financial rules which determine in particular the procedure to be adopted for establishing and implementing the budget and for presenting and auditing accounts.

• Subsidiarity (for non-exclusive competence)

The response to bolster Union competitiveness must be coordinated at the Union level to be truly effective. Pooling resources at this level enhances the impact and value of investments by achieving economies of scale in fostering and de-risking investment in policy areas critical for European competitiveness. This approach is more cost-effective than if Member States acted independently.

Persistent underinvestment by the private sector across critical areas—such as infrastructure, green and digital transitions, and industrial capacity—is compounded by fragmented capital markets, which impede efficient cross-border investment. Despite high private savings, these are not adequately converted into long-term investments necessary for strategic autonomy.

Public R&D spending within the Union remains fragmented and misaligned with Union-wide priorities, with most funding coming from individual Member State budgets. Only Union-level action can support the scale and type of projects that Member States cannot achieve alone, creating critical mass for impactful projects and partnerships.

Furthermore, Union-level coordination promotes collaboration, essential for fostering knowledge spillovers and derisking investment, thereby enhancing competitiveness. An Union-wide approach offers economies of scale and cooperation among stakeholders, crucial for boosting knowledge valorisation and improving capacities.

Last but not least, a directly managed Union programme is best placed to ensure the application of a single set of rules for cross-border cooperation in the most strategic policy areas covered by the ECF, thereby ensuring policy alignment and creating economies of scale across sectors and Member States.

• Proportionality

Inhoudsopgave

The proposed actions do not go beyond what is required to achieve Union objectives and Union added-value.
A simplified and upgraded application process would increase clarity for project promoters and overall facilitate access to funding.
A simplified and upgraded application process will increase clarity for project promoters and overall facilitate access to funding.

1. The proposed actions do not go beyond what is required to achieve Union objectives and Union added-value.

• Choice of the instrument

The basic act takes the form of a regulation adopted under ordinary legislative procedure in accordance with the TFEU to ensure obligations are directly binding on recipients of ECF and directly applicable in all Union Member States.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

This proposal is based on the extensive analysis of impact assessments, mid-term evaluations for 2021-2027 programmes falling within the scope of this initiative and on available ex-post evaluations for 2014-2020 programmes. A full list of the evaluations analysed is provided in Annex 1 of the Impact Assessment accompanying this proposal.

• Stakeholder consultations

The European Commission conducted a public consultation to gather insights on Union funding for competitiveness in preparation for the next Multiannual Financial Framework (MFF) starting in 2028. This consultation, which took place over 12 weeks and included an online questionnaire and position papers, targeted a wide range of stakeholders such as citizens, businesses, SMEs, public authorities, and academia.

A summary of findings from 2,034 responses and 462 position papers revealed widespread underinvestment in research and innovation and a notable innovation gap with global competitors as key challenges to Union competitiveness. The consultation highlighted the need for Union-level coordination to pool resources effectively, thereby achieving economies of scale and improving the impact of investments in areas like infrastructure, innovation, and strategic sectors.

Respondents supported measures focusing on increasing funding for strategic priorities, ensuring continuity in funding from research to manufacturing, and limiting Union dependencies in strategic sectors. These measures were seen as necessary to address fragmented support across the investment journey, which hinders competitiveness by preventing efficient transformation of savings into long-term investments.

Challenges also included fragmented capital markets and insufficient private investment, especially affecting SMEs and scale-up companies. Among respondents, businesses and academic institutions stressed the importance of greater investments in R&D, infrastructure modernisation, and decarbonisation to maintain competitiveness. Despite positive feedback on various stages of the funding process, concerns were raised over long evaluation timelines, lack of transparency, and complex application procedures, particularly affecting SMEs and new applicants. Simplification and coherence across programmes were suggested as ways to improve the funding process.

The public consultation was complemented with other consultation activities for relevant stakeholders both on the industry and the research and innovation areas.

For industry stakeholders, the 9th plenary meeting of the Industrial Forum held on 19th March 2025, focused on the new European Competitiveness Fund. The participants, represented by over 60 members from different industries and business associations as well as Member States were invited to provide their feedback on the problems related to the competitiveness and to share ideas on how to address these challenges. The input received largely confirmed with the stakeholders’ feedback received during the public consultation, emphasising the need to align research and industrial policy and funding tools.

A more detailed summary of the consultation carried out in the framework of this proposal can be found in Annex 2 of the Impact Assessment accompanying this proposal.

• Collection and use of expertise

This proposal is based on an extensive desk review covering approximately 140 documents, including the above-mentioned impact assessments, mid-term evaluations and ex-post evaluations. A series of relevant policy and scientific reports and papers have also been consulted.

The desk review was further completed by economic modelling carried out by Joint Research Centre (JRC) for quantifying selected impacts and cost benefit analysis carried out by an external consultant. A comprehensive list of sources used for the purposes of this proposal can be found in Annex 1 of the Impact Assessment accompanying this proposal. A detailed methodology used for the purposes of the cost benefit analysis and modelling can be found in Annex 4 of the Impact Assessment.

• Impact assessment

The Regulatory Scrutiny Board provided comments to the impact assessment.

Three different policy options have been considered in the impact assessment,

The first option is “Business-as-usual-plus”, in which the 14 programmes1 would retain their own rules, but the Commission would try to ensure more horizontal consistency across the funds, building on the STEP approach.

The second option is an “Enhanced coordination between programmes and a common rulebook”, which would go further by harmonising rules across programmes, in particular by aligning objectives, strands, and pillars, as well as the implementing tools and horizontal legal provisions.

The third option is a “Consolidation of programmes in a new European Competitiveness Fund”, which would bring relevant Union programmes into one fund with a strategic steer that would prioritise policy rather than programmes.

The preferred option is the third option, as it offers a comprehensive set of policy measures to overcome the current deficiencies in the Union funding landscape related to competitiveness outlined above.

Option C is expected to reduce administrative costs for beneficiaries by integrating access points and introducing a single rulebook, simplifying the funding process and creating a more efficient, business-friendly environment, particularly benefiting high-growth industries, SMEs, innovative start-ups, and projects requiring long-term investment support.

2. A simplified and upgraded application process would increase clarity for project promoters and overall facilitate access to funding.

Option C also consolidates funding processes and broadens access to financial tools, allowing the Union to better harness its potential to mobilise private capital and increase budgetary flexibility. The option also strengthens connections between fundamental research and advanced stages of research, innovation and manufacturing, ensuring a dynamic economic structure within the Union and better bringing ideas to the market. To ensure the success of the preferred option, the Union will implement measures to minimise potential negative impacts, including by balancing flexibility with the need of predictability.

The preferred option would entail some adjustment costs for applicants and beneficiaries already benefitting from Union funds. However, while initial adaptation to the new fund would be needed, beneficiaries would only need to undertake this learning process once, rather than repeatedly for multiple programmes.

Marketwise, a unified funding framework aims to enhance the competitiveness of European companies by making funding more accessible and strategically aligned. It also supports European strategic autonomy and reduces critical dependencies.

• Regulatory fitness and simplification

One of the key pillars of this proposal is the simplification, which will be achieved through integrating access points and introducing a single rulebook, simplifying the funding process and creating a more efficient, business-friendly environment, particularly benefiting high-growth industries, SMEs, innovative start-ups, and projects requiring long-term investment support.

3. A simplified and upgraded application process will increase clarity for project promoters and overall facilitate access to funding.

• Fundamental rights

The proposal is in line and respects the Union values enshrined in Article 2 of the Treaty on the European Union and the fundamental rights enshrined in the Charter of Fundamental Rights of the European Union (the Charter), where the objectives of the proposed initiative are linked to the promotion of fundamental rights and the application of the Charter. For instance, the proposal promotes the right to life and private life by promoting decarbonisation as well as equality by promoting equality of opportunity and fostering diversity across the investment landscape.

4. BUDGETARY IMPLICATIONS

The financial envelope for the implementation of the ECF for the period from 1 January 2028 to 31 December 2034 shall be EUR 234 300 000 000 in current prices. The indicative distribution of the amount shall be as follows:

–EUR 11 000 000 000 for activities contributing to the general objectives referred to Article 3, as implemented in particular through cross-cutting activities such as non-thematic support of the ECF InvestEU Instrument, referred to in Chapter II, Section 2; Project Advisory, SME Collaboration, skills development and Access to Funding, referred to in Chapter III.

–EUR 26 210 000 000 for the specific objectives referred to in Article 3(2), point (a).

–EUR 20 393 000 000 for the specific objectives referred to in Article 3(2), point (b).

–EUR 51 493 000 000 for the specific objectives referred to in Article 3(2), point (c).

–EUR 125 204 000 000 for the specific objectives referred to in Article 3(2), point (d).

A legislative financial statement with further budgetary information is included.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

This initiative will be monitored through the performance framework for the post-2027 budget, which provides for an implementation report during the implementation phase of the programme, as well as a retrospective evaluation to be carried out in accordance with Article 34 i of Regulation (Union, Euratom) 2024/2509. A simplified application of the performance framework will be used for the budgetary guarantee and financial instruments. The deployment of market-driven instruments requires simplification efforts to attract private investors to support Union policy areas.

The evaluation will be conducted in accordance with the Commission's Better Regulation Guidelines and will be based on indicators relevant to the objectives of the programme.

• Detailed explanation of the specific provisions of the proposal

–Chapter I establishes the European Competitiveness Fund (ECF) as part of the multiannual Framework Programme for 2028-2034, focusing on enhancing Union competitiveness in strategic sectors. It sets out the Fund’s objectives, budget, and funding rules, aiming to support projects across clean and digital transition, health, and resilience, security and defence sectors. The main goals include increasing technological and economic impact, reducing strategic dependencies, attracting private investment, and supporting infrastructure and SMEs. The chapter emphasizes aligning research and industrial policies to bolster Union industries globally, developing critical infrastructure, and addressing skill shortages. Specific objectives focus on fostering innovation and competitiveness in critical sectors such as clean technology, health, digital transition, security and defence. The chapter emphasizes reinvesting returns to boost Union competitiveness and includes guidelines for working with Member States and third countries to expand investment opportunities. It sets out the single rulebook. Additionally, it ensures strategic coordination of resources and lays down the governance arrangements

–Chapter II introduces the 'ECF Toolbox' composed of grants, procurement, and coordination of industrial policy tools, and the ECF InvestEU Instrument, which uses financial tools like loans, equity and guarantees expected to mobilise significant private and public investment aligned with Union priorities. It lays down common rules for collaborative research and innovation activities, while taking into account targeted specificities under Horizon Europe, and ensures coordination of industrial policy tools, including value chains, production ramp up, skills development and critical competitiveness actions. The ECF InvestEU Instrument outlines how financing will be managed and deployed by implementing partners to market, focusing on key areas such as development and deployment of innovative technologies. Existing deep-tech scale-up financing under the Scaleup Europe Fund announced in the Startup Scaleup Strategy will be carried out under the terms agreed in the current MFF. All future scaleup financing in the MFF 2028-2034 will take place under the ECF.

–Chapter III aims to enhance Project Advisory services, support SME collaboration, and streamline access to funding. It establishes a centralised Project Advisory for investment support across all policy windows, business support services and a Union business network to bolster SMEs and startups to promote their growth, access to Union funding and investments through advisory and partnering services.

–Chapters IV – VII provide for more detailed provisions for the implementation of each of the ECF policy windows.

–Chapter VIII, titled 'Final Provisions,' details the procedural and administrative framework for implementing the European Competitiveness Fund (ECF). It describes how the European Commission will be supported by a committee with different configurations, focusing on different sectors for the adoption of the work programmes. The chapter grants the Commission the power to adopt delegated acts, which can be revoked by the European Parliament or the Council if necessary. It also outlines the repeal of several existing Union regulations to streamline into the new structure and includes transitional arrangements to ensure a smooth shift to the ECF framework. The regulation is set to come into effect on January 1, 2028, binding all Member States.