Proposal for a Regulation of the European Parliament and the Council establishing the European Institute of Technology {SEC(2006) 1313} {SEC(2006) 1314}
Date: 2006-10-18
Institutions: European Commission
Subjects: EU office or agency, EU research policy, legal status, powers of the institutions (EU), research and development, research body, technology park

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.10.2006 
COM(2006) 604 final 

2006/0197 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL 

establishing the European Institute of Technology 

(presented by the Commission) 

{SEC(2006) 1313} 
{SEC(2006) 1314} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

General context 

Enhancing the relations and synergies between innovation, research and education – the main 
drivers  of  the  global  knowledge  economy  -  is  crucial  to  boost  competitiveness  of  the  EU 
industry and services and create jobs and sustainable growth in the European Union.  

But  Europe  is  falling  short  in  filling  the  innovation  gap  and  in  developing  an  integrated 
knowledge triangle – education, research and innovation. There is general agreement that the 
main weakness faced by the EU in the innovation area lies in its limited capacity to convert 
knowledge outputs into commercial opportunities. Moreover, most Member States, albeit with 
different  intensities,  encounter  difficulties  in  promoting  an  innovation  and  entrepreneurial 
culture  in  research  and  education,  in  developing  critical  masses  of  human,  financial  and 
physical  resources  in  knowledge  and  innovation,  and  in  rewarding  performance  and 
excellence in ways which attract the best academic staff and researchers. Global competition 
from traditional competitors and the emerging Asian economies poses a great challenge to the 
attractiveness of Europe as a Knowledge Area and seriously hinders our ability to strengthen 
the  scientific  and  technological  basis  of  Community  industry  and  to  mobilise  its  innovation 
potential. 

There is broad consensus in the Union on the need to take urgent action to develop conditions 
conducive to a better exploitation of the commercial potential of innovation and knowledge 
policies,  as  a  key  to  deliver  stronger  and  lasting  growth.  The  revised  Lisbon  Strategy  has 
therefore placed innovation, research and education activities, the engines of competitiveness, 
at the top of the Growth and Jobs Agenda. In the framework of the revised Growth and Jobs 
Strategy, important initiatives have been launched at both national and EU level to strengthen 
innovation and the links between higher education, research and businesses.  

However, there is still untapped potential. To bridge the innovation gap between the EU and 
its  major  competitors,  we  must  promote  further  the  integration  of  the  three  sides  of  the 
knowledge triangle in a mutually-supportive manner.  

Member  States  are  primarily  responsible  for  sustaining  a  strong  European  industrial  and 
competitive  base,  whilst  facilitating  innovation  and  more  and  better  investment  in  research, 
education  and  training.  However,  given  the  nature  and  scale  of  the  innovation  challenge, 
action  at  European  level  may  generate  additional  benefits  that  may  not  be  achieved  by  the 
Member States alone. There is thus a Community dimension that complements, facilitates and 
coordinates Member States’ policies and responses.  

There  is  clearly  added  value  in  promoting  innovation  at  Community  level,  by  setting  up 
excellence-driven strategic long-term partnerships in critical areas between all actors involved 
in  the  knowledge  triangle.  Such  an  initiative  would  offer  European  companies  a  new 
relationship  with  education  and  research.  It  would  also  provide  a  world-class  innovation-
oriented critical mass at the EU level in the key fields, able to build a global reputation and 
attractiveness. 

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1.2. 

Grounds for the proposal 

In February 2005, President Barroso put forward the idea of establishing a European Institute 
of  Technology  (the  EIT),  as  part  of  the  mid-term  review  of  the  Lisbon  strategy.  The  EIT 
should be seen as one of the elements of a comprehensive strategy to mobilise knowledge and 
innovation as a key to growth and employment. It would be a concrete expression of the EU 
commitment to create an environment that champions innovation and high level excellence in 
the Union. 

The Commission undertook a process of reflection and carried out wide-ranging consultations 
which  resulted  in  the  presentation  of  a  first  Communication  on  22  February  20061.  The 
conclusions  of  the  European  Council  of  23-24  March  2006  recognises  that  “a  European 
Institute  of  Technology  will  be  an  important  step  to  fill  the  existing  gap  between  higher 
education,  research  and  innovation”  and  invited  the  Commission  to  submit  a  proposal  on 
further steps. 

On 8 June 20062 the Commission issued a second communication, which drew extensively on 
the outcomes of the consultation process and shed light on a number of specific issues related 
to the proposed structure and operation of the EIT.  

At the European Council of 15-16 June 2006 the Heads of State and Government reaffirmed 
that “the European Institute for Technology (EIT), working with existing national institutions, 
will be an important step towards filling the existing gap between higher education, research 
and  innovation  together  with  other  actions  that  enhance  networking  and  synergies  between 
excellent research and innovation communities in Europe”. 

The  European  Council  invited  the  Commission  to  prepare  “a  formal  proposal  for  its 
establishment,  to  be  presented  in  autumn  2006,  following  consultation  with  the  European 
Research Council, Member States and stakeholders”. 

As  a  result  of  its  analysis  and  extensive  consultations  with  the  research  and  academic 
communities  and  the  Member  States,  the  Commission  has  concluded  that,  in  a  European 
context, the best departure point would be a network building approach, but that this should 
be developed to arrive at an EIT based on truly integrated partnerships. 

1.3. 

Objectives and main content of the proposal  

The  EIT  will  contribute  to  improving  the  competitiveness  base  of  the  Member  States  by 
involving partner organisations  in integrated innovation,  research and education activities at 
the  highest  international  standards.  It  will  be  an  integral  element  of  a  comprehensive 
Community strategy aimed to support knowledge and innovation towards the Lisbon goals.  

The EIT will encourage and promote innovation through trans- and inter-disciplinary strategic 
research  and  education  in  areas  of  key  economic  or  societal  interest  and  by  exploiting  its 
knowledge  outcomes  to  the  benefit  of  the  EU.  It  will  build  a  ‘critical  mass’  of  human  and 
physical  resources  in  these  fields  of  knowledge,  attracting  and  retaining  private  sector 
investment  in  innovation,  education,  and  R&D,  as  well  as  students  at  master  level,  doctoral 

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COM(2006) 276. 

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candidates and researchers at all levels of their careers from both the scientific and business 
sectors. 

The  EIT  will  become  a  symbol  of  the  integrated  European  Innovation,  Research  and 
Education  Area,  generating  innovations  in  areas  of  key  economic  or  societal  interest.  The 
ambition  is  that  the  EIT  becomes  a  reference  for  managing  innovation,  by  promoting  new 
forms  of  collaboration  among  the  type  of  partner  organisations  involved  in  the  Knowledge 
triangle as well as for the modernisation of higher education and research institutions in the 
EU, both directly, through its activities and outputs, and indirectly through its governance.  

The EIT aims also to build a global reputation and provide an attractive environment for the 
best  talents  worldwide.  Participation  in  its  Knowledge  and  Innovation  Communities  will  be 
opened to partner organisations, students and researchers from outside the Union. Moreover, 
third  countries  would  be  entitled  to  support  the  objectives  of  the  EIT.  By  promoting  its 
attractiveness in the global scene, the EIT would become a worldwide flagship of excellence-
driven innovation. 

The EIT will be based on a new, innovative two-level model of governance, which combines 
bottom-up  autonomy  and  flexibility  in  the  delivery  with  top-down  strategic  guidance, 
coordination  animation  and  facilitation  of  dialogue,  and  dissemination  of  results  and  good 
practice. The EIT will perform its activities through Knowledge and Innovation Communities 
(KICs).  Based  on,  but  going  beyond,  a  network  approach,  these  are  envisaged  as  integrated 
partnerships or joint ventures (whatever their precise legal form) between the private sector, 
the  research  community  and  excellent  teams  from  research  communities  and  universities 
whose  human,  financial  and  physical  resources  work  together  to  promote  the  production, 
dissemination  and  exploitation  of  new  knowledge  products.  To  intensify  their  integrating 
nature,  the  KICs  shall  make  use  of  state-of-the-art  research  networking  and  computing 
infrastructures.  A  Governing  Body,  composed  of  high  level  members  with  a  proven 
experience in business, research and education, will be responsible for strategic decisions of 
the EIT, including the definition of the strategic areas in which KICs will be established, their 
selection and the overall coordination and evaluation of their activities. The relations between 
the EIT bodies and the KICs will be based on contractual agreements, which will set out the 
KICs'  rights  and  obligations,  ensure  an  adequate  level  of  coordination  and  outline  the 
mechanism for monitoring and evaluation of the KICs activities and outcomes.  

Appropriate management and a balanced distribution of intellectual property rights is another 
indispensable  requirement  for  innovation:  without  an  adequate  use  and  management  of 
inventions, there is no real stimulus to invest in innovation. The EIT will establish guidelines 
for  the  management  of  intellectual  property,  which  will  enhance  EU  innovation  capacity, 
enable  the  use  of  intellectual  property  under  appropriate  conditions  for  research  and 
innovative  purposes  and  provide  appropriate  incentives  for  the  EIT  and  partners,  including 
individuals involved, KICs and partner organisations, and provide specific incentives for spin-
offs and for commercial success.  

Education  will  be  a  crucial  component  of  the  EIT  as  it  is  often  the  missing  element  in  the 
Knowledge  triangle.  In  the  context  of  a  global  and  open  knowledge  economy,  the  EIT  will 
promote  the  development  of  courses  and  doctoral  programmes  which  incorporate  the 
entrepreneurial element and this will be one of the hall-marks of the degrees issued through 
the KICs. It is important for the success of the EIT that its "brand" should be highly visible on 
these degrees. In the great majority of cases, it is expected that degree awarding partners will 
be universities, though some Member States may wish to also grant degree awarding powers 

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to  other  partners  in  a  KIC  or  to  the  KIC  as  a  whole.  The  Member  States  will  co-operate  in 
recognising the EIT degrees and diplomas and the EIT will seek to support this process.  

1.4. 

Existing initiatives and European added value of the EIT 

Responsibility  for  education,  research  and  innovation  policies  rests  primarily  with  the 
Member  States.  There  are  marked  variations  between  EU  countries  in  their  approaches  to 
innovation,  and  many  positive  national  initiatives  and  developments  which  should  be 
sustained and reinforced. However, the nature and scale of the innovation challenge suggests 
that  action  at  the  European  level  is  likely  to  generate  additional  benefits  which  may  not  be 
achieved through the separate actions of Member States. 

The  Community  has,  in  any  event,  been  engaged  in  supporting  the  Member  States  in  their 
efforts  to  improve  innovation  and  the  knowledge  triangle.  In  the  context  of  the  Lisbon 
Strategy, the Commission facilitates policy exchanges aimed at identifying best practices and 
to stimulate better policy making on how to bridge the innovation gap. Several programmes 
pertaining to the knowledge triangle offer financial support to help EU universities, research 
centres, enterprises and other actors in the knowledge triangle maximise their contribution to 
the  Growth  and  Jobs  Strategy.  The  EU  operates  a  number  of  Community  programmes 
supporting  directly  or  indirectly  different  aspects  of  the  knowledge  triangle,  such  as  the  7th 
Framework  Programme  for  Research  and  Technological  Development,  the  Competitiveness 
and Innovation Programme, the Integrated Life long Learning Programme, and the Structural 
Funds. 

However, no EU initiative has so far fully addressed all three components of the knowledge 
triangle  in  a  fully  integrated  and  mutually-reinforcing  manner;  existing  instruments  address 
either one section of the knowledge triangle in isolation, or at maximum integrate two, and do 
so, for the most part by supporting development at the national level. No EU initiative to date 
has  stimulated  the  development  of  a  European-level  world-class  institution  with  the  aim  of 
achieving  the  necessary  research,  education  and  innovation  oriented  excellence  and  critical 
mass in specific fields of intervention. This potential is still unfulfilled. 

For  example,  the  7th  Framework  Programme  for  Research  and  Technological  Development 
will  be  the  main  financial  tool  through  which  the  European  Union  supports  research  and 
development activities in all scientific disciplines. The European Research Council is a new 
funding mechanism of the Framework Programme, aimed at increasing the level of excellence 
in  EU  frontier  research  by  providing  support  for  the  best  European  investigator-driven 
research.  The  Networks  of  Excellence  are  trans-national  multi-partner  projects  grouping 
together key players in Europe focussing on a durable integration of research capacities on a 
given  research  topic.  The  European  Technology  Platforms  are  groups  of  stakeholders, 
involving mainly business and research partners, who together informally define  a  Strategic 
Research Agenda on a number of strategically important issues with high societal relevance. 
The  proposed  Joint  Technology  Initiatives  will  be  dedicated  legal  structures,  set-up  in  a 
limited  number  of  cases,  to  co-ordinate  the  mobilisation  of  large-scale  public  and  private 
investments  and  substantial  research  resources.  However,  the  latter  two  initiatives  focus  on 
integrating  business  and  research  partners  in  the  definition  and  implementation  of  strategic 
research agendas, without education as a major component. 

The Competitiveness and Innovation Programme brings together notably actions in support of 
innovation  and  SMEs.  It  contributes  inter  alia  to  the  financing  of  start-ups  and  innovation 
support  services,  including  services  for  transnational  knowledge  and  technology  transfer,  as 

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well  as  a  wide  range  of  innovation-specific  initiatives,  such  as  networks  of  clusters,  sector-
specific  public-private  partnerships  and  policy  coordination  activities  between  national  and 
regional  programmes.  However,  it  does  not  incorporate  excellence–driven  research  and 
education criteria and activities.  

The integrated Life Long Learning Programme will address important needs concerning the 
modernisation and adaptation of Member States’ education and training systems, particularly 
in the context of the Lisbon goals. It will also bring added value directly to individual citizens 
participating in its mobility and other cooperation actions. Nevertheless, the programme only 
tackles the education component of the knowledge triangle.  

Finally,  the  new  generation  of  economic  and  social  cohesion  programmes  should  seek  to 
earmark  significant  resources  for  investing  in  the  main  drivers  of  growth  and  employment. 
However,  these  programmes  are  not  primarily  driven  by  excellence,  since  each  country  or 
region will naturally define its policy–mix in the light of the nature and extent of its particular 
structural deficits and competitive advantages. 

To bridge the innovation gap between the EU and its major competitors, it will be necessary 
to support excellence-driven strategic partnerships at the EU level between actors involved in 
the  three  parts  of  the  knowledge  triangle,  on  an  inter  and  trans-disciplinary  basis.  The 
European Institute of Technology (EIT) will aim to be a world-class operator in its field and 
to serve as a flagship capable of inspiring better performance  by other  European  actors and 
networks in the knowledge triangle. In this way, it can complement existing EU and national 
policy initiatives and financial instruments to bridge the innovation gap between the EU and 
its major competitors. 

2. 

CONSULTATION  OF 
ASSESSMENT 

INTERESTED 

PARTIES  AND 

IMPACT 

2.1. 

Consultation of interested parties  

The Commission has carried an extensive consultation involving experts, the public, Member 
States, and European Stakeholders including the Scientific Council of the European Research 
Council.  Three  expert  meetings  were  organized  in  the  summer  2005  to  discuss  the  possible 
goals and structure of the EIT. A public consultation ran from 15 September to 15 November 
2005.  It  received  more  than  740  contributions,  including  position  papers,  from  both 
individuals and organizations. Member States and Stakeholders have been consulted in three 
rounds of meetings in April, May, and September 2006. As regards stakeholders, an average 
of  40  European  level  organizations  attended,  representing  the  research,  education  and 
business sectors. 

General  agreement  emerged  during  the  consultations  on  the  Commission’s  background 
analysis  as  well  as  on  the  need  for  a  concerted  effort  to  improve  Community  and  Member 
States'  competitiveness.  The  consultation  shed  light  on  a  number  of  issues  pertaining  to  the 
proposed structure of the EIT, notably on the nature and the role of the Governing Board; the 
functioning of the KICs, the status of EIT staff; the incentives for partners to participate in the 
EIT  and  the  degrees  issue.  More  specifically,  expert  voices  have  argued  for  a  strong 
involvement of business sector from the outset, and in particular for a demand-led process to 
define the areas in which KICs should be supported. They have underlined the importance of 

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autonomy for the EIT Governing Board, and the need for a composition with an appropriate 
balance of academic/research and business members. 

2.2. 

Collection and use of expertise 

Extensive use has been made of the Commission’s internal analysis on knowledge, innovation 
and  education  issues  as  well  as  reports  prepared  by  independent  experts,  in  particular  the 
expert groups on research, development and innovation, and external consultants. 

2.3. 

Impact assessment  

Five options have been thoroughly examined in the Impact assessment for the establishment 
and operation of the EIT. Three of the five options considered the EIT as an innovation and a 
knowledge operator, carrying out activities in the fields of innovation, research and education 
but  differ  in  their  degree  on  centralisation  and  top-down/bottom-up  organisation  model.  A 
forth option considered the EIT as a funding-labelling body, whilst the fifth one analysed “a 
status quo” solution. 

The  option  of  creating  an  autonomous  organization  that  pulls  together  the  best  resources  at 
Community  level  and  coordinates  them  within  the  flexible  framework  of  trans-  and 
interdisciplinary  KICs,  the  so-named  “integrated  EIT”  is  the  preferred  option.  This  option 
aims at balancing a series of potentially opposing needs: the need for coordination to ensure 
synergy  and  strategic  orientation  together  with  the  autonomy  needed  by  the  KICs  to  be 
adaptable and deliver; the need to be independent from external influences to pursue the EIT’s 
own agenda with that to be enough attractive to involve partner organizations; and finally the 
need to experiment with novel ways to integrate innovation research and education with that 
of relying and building on existing good practices.  

As a new organization, the EIT will also be able to experiment with new organizational and 
governance models which integrate innovation, education and research, and thereby to fully 
involve  businesses  in  strategic  partnerships;  it  can  provide  a  dynamic  working  environment 
that  rewards  excellence  and  thus  attract  the  best  talents  worldwide.  As  an  open  structure 
focused on individuals and teams rather than on entire institutions, it would be able to involve 
excellence at any level, in any organization and with a European dimension. It would enable 
the creation of a critical mass of excellent resources, pooling the best of what already exists 
and responding to the strategic long-term challenges posed in trans and interdisciplinary fields 
of potential economic and societal interest for Europe. 

At the same time, since it would be based on partner organizations in KICs, it maximizes the 
EU  level  impact.  Not  only  these  organizations  will  have  the  possibility  to  influence  and  be 
involved  in  innovation,  research  and  education  activities  at  the  highest  level  and  with  a 
European scope but individuals will also be carriers of those best practices developed within 
the EIT, thus contributing to adapting the agendas of partner organizations.  

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Summary of the proposed action 

The proposal consists of a proposal for a Regulation of the European Parliament and of the 
Council on the establishment of the European Institute of Technology. 

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3.2. 

Legal basis 

The  third  paragraph  of  Article  157  of  the  Treaty  establishing  the  European  Community 
provides  the  legal  basis  for  this  Regulation.  Article  157  (3)  allows  the  Council,  acting  in 
accordance  with  the  procedure  referred  to  in  Article  251  and  after  consulting  the  Economic 
and  Social  Committee,  to  decide  on  specific  measures  in  support  of  action  taken  in  the 
Member States aimed at fostering a better exploitation of the industrial potential of policies of 
innovation, research and technological development. 

3.3. 

Subsidiarity and proportionality principle  

In  accordance  with  its  legal  basis,  the  proposal  will  address  the  challenges  identified  in  a 
proportionate  manner  and  in  accordance  with  the  subsidiarity  principle.  While  the  main 
responsibilities  for  encouraging  innovation  lie  with  the  Member  States,  the  proposal 
establishing the EIT will complement Member States’ efforts to enhance competitiveness by 
(a) developing a new governance model of cooperation on innovation, research and education 
activities  at  the  highest  international  standards,  thereby  fostering  the  industrial  and 
commercial  potential  of  the  knowledge  triangle;  and  (b)  focussing  on  activities  where  the 
scale and quality  of the resources required can with difficulty  be matched by the individual 
action of a Member State and the integrated activities benefit from a trans-national approach 
across the Member States.  

In accordance with the principle of proportionality, the provisions of this regulation do not go 
beyond what is necessary to achieve its goals. Moreover, the administrative burden on the EIT 
has been limited to what is necessary for the Commission to exercise its responsibility for the 
execution of the Community budget. 

3.4. 

Choice of instruments 

The  proposal  should  take  the  form  of  a  Regulation.  The  choice  of  a  Regulation  reflects  the 
fact that the text creates rights and obligations for the EIT and for the KICs, whose partners 
cannot at this stage be identified.  

4. 

BUDGETARY IMPLICATIONS 

The  activities  of  the  EIT  and  the  Knowledge  and  Innovation  Communities  (KICs)  will  be 
financed from a combination of sources:  

1. 

from external sources including:  

(a)  Member State, regional or local authorities; 

(b) 

private sources (companies, venture capital, banks, including the EIB);  

(c) 

resources resulting from its own activity (eg, from intellectual property rights);  

(d) 

resources from the endowments the EIT may accumulate; 

2. 

from Community sources through the budget to the EIT or to the KICs directly, from 
unallocated  margins  beneath  the  ceiling  of  sub-heading  1A,  and  through  the 
structural Funds and participation, in accordance with normal procedures, in the 7th 

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Framework Programme, the Lifelong Learning Programme, the Competitiveness and 
Innovation Programme.  

Resources  flowing  to  the  EIT  directly  would  be  used:  (i)  to  finance  the  KICs  through  a 
competitive  process  based  on  excellence  and  in  accordance  with  the  criteria  set  by  the 
Governing Board of the EIT; (ii) to finance the running costs of the EIT; or (iii) to contribute 
to the EIT's endowment 

including 

Resources flowing to the KICs directly have to be attracted by the KICs and/or their partner 
organisations, 
to  Community 
programmes  and  the  Structural  Funds.  They  would  constitute  elements  of  the  offer  of  the 
KICs  in  the  competitive  process  for  obtaining  resources  from  the  EIT  or  could  be  attracted 
once a KIC has been awarded such resources. 

the  normal  procedures  applicable 

through 

However,  the  precise  arrangements  for  the  funding  of  the  EIT  and  the  KICs  will  clearly 
evolve over time. The Commission estimates that the EIT will require front loading from the 
Community Budget in the start up phase, the objective remaining to maximise in the mid term 
contributions from external sources. There is also a trade-off between the resources flowing 
directly to the KICs, including from Community programmes, and the contribution from the 
Community budget to the EIT directly.  

The level of ambition entailed in the proposal means that the total spending of the EIT and the 
KICs during the period 2007–2013 could be estimated at € 2,367.1 million. The financing of 
this  amount  can  either  come  directly  from  the  Community  budget,  directly  or  indirectly 
through Community programmes or from other external sources.  

The Commission has been in regular contact with the private sector, and believes that there is 
a  reservoir  of  interest  in  the  EIT  which  can  be  tapped,  including  block  grants  to  the  EIT's 
endowment. In practice, the capacity of the EIT and the KICs to attract outside (particularly 
business)  funding  will  depend  on  a  credible  business  plan.  Two  factors  are  crucial:  (i)  the 
capacity to attract into KICs the most advanced firms and the best universities and research 
teams; and (ii) the extent to which the Community itself makes a public declaration of trust by 
committing  itself  to  making  available  a  substantial  financial  contribution  to  kick  start  the 
process and show openness to consider at a later stage other forms of contributions flowing 
either to the EIT directly or to the KICs. On this basis a virtuous circle can be generated. 

As regards the Community sources, the Commission notes that no specific provision has been 
made  for  the  EIT  in  the  new  legislative  proposals  included  in  the  negotiations  on  the  Inter-
institutional  Agreement  of  17  May  2006  on  budgetary  discipline  and  sound  financial 
management.  The  Commission  proposes  therefore  to  use  part  of  the  unallocated  margins 
beneath the ceilings of sub-heading 1A to finance the EIT directly up to an amount of € 308,7 
million.  In  parallel,  the  Commission  will  continue  to  explore  the  possibilities  of  identifying 
additional complementary resources including recourse, where necessary, to the provisions of 
the Inter-Institutional Agreement.  

Contributions  to  the  KICs  or  their  partner  organisations  directly  from  the  7th  Framework 
Programme,  the  Lifelong  Learning  Programme  and  the  Competitiveness  and  Innovation 
Programme and Structural Funds in accordance with their respective procedures are possible 
and expected to constitute an important part of their funding. On the basis of first experience 
and to the extent that such contributions are deemed necessary and cannot be achieved within 

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the  framework  of  the  existing  legal  bases,  a  proposal  for  necessary  adjustment  will  be 
considered in due course.  

The Structural Funds can play a potentially important role for partner organisations involving 
eligible  Member  States,  regions,  cities  or  other  beneficiaries  because  many  types  of 
expenditure  or  investment  are  eligible  under  the  Structural  Fund  rules  and  would  fall  under 
the earmarking for Lisbon priorities.  

As  regards  external  resources,  co-financing  is  expected  from  the  partners  in  the  KICs 
themselves  or  to  be  attracted  by  them.  In  addition,  a  substantial  part  of  the  investment  in 
improving  the  facilities  used  by  KICs  could  be  met  by  straight  contributions  from  Member 
States, regional or local authorities or from loans, including from the EIB. 

5. 

ADDITIONAL INFORMATION 

5.1. 

Review clause 

The  proposal  includes  a  review  clause  under  which  the  Commission  will  report  on  the 
implementation of the EIT Regulation and make any appropriate proposal for its amendment 
after five years and every four years thereafter.  

5.2. 

Flexibility  

The specific nature and objectives of the EIT require a high level of flexibility in its design 
and operation. In particular, care should be taken to avoid unnecessary complexities that could 
undermine  its  innovation  potential and  lead  to  excessive  and  unattractive  bureaucracy  in  its 
organisation as well as in the selection and implementation of its activities. 

5.3. 

Staff  

The EIT itself will employ a very limited number of staff, estimated at a maximum of 60 at 
cruising  speed,  consisting  in  equal  proportions  of  scientific  staff  in  an  advisory  role  and 
support  staff.  These  will  be  personnel  directly  employed  by  the  EIT  under  fixed-  term 
contracts, in accordance with the conditions of employment of other servants of the European 
Community. The EIT may also receive secondees from Member States or the private sector. 
The Governing Board will adopt the necessary provisions to enable seconded experts to work 
at the EIT. 

EN 

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2006/0197 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL 

establishing the European Institute of Technology 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 157(3) thereof, 

Having regard to the proposal from the Commission3, 

Having regard to the opinion of the European Economic and Social Committee4, 

Having regard to the opinion of the Committee of the Regions5, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty6, 

Whereas: 

(1) 

The  Lisbon  Growth  and  Jobs  Agenda  underscores  the  need  to  develop  conditions 
which  are  attractive  to  investment  in  knowledge  and  innovation  in  Europe  to  boost 
competitiveness, growth and jobs in the European Union. 

(2)  Member  States  are  primarily  responsible  for  sustaining  a  strong  European  industrial, 
competitive  and  innovative  base.  However,  the  nature  and  scale  of  the  innovation 
challenge in the Union requires also taking action at Community level. 

(3) 

(4) 

The Community should provide support to foster innovation, in particular through the 
7th  Framework  Programme  for  Research  and  Technological  Development,  the 
Competitiveness  and  Innovation  Programme,  the  integrated  Lifelong  Learning 
Programme and the Structural Funds.  

A new initiative at Community level thereafter referred to as “the European Institute of 
Technology  Institute  (the  EIT)”  is  needed  to  complement  existing  Community  and 
national policies and initiatives by fostering the integration of the knowledge triangle -
innovation, research and education- across the EU. 

(5) 

The  European  Council  of  June  2006  invited  the  Commission  to  prepare  a  formal 
proposal for the establishment of the EIT to be presented in autumn 2006. 

3 
4 
5 
6 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ C 325, 24.12.2002. 

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11 

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(6) 

(7) 

(8) 

(9) 

The  EIT  should  have  the  objective  of  contributing  to  the  development  of  the 
Community and the Member States innovation capacity, by fully involving education, 
research and innovation activities at the highest standards. 

Through its Governing Board, the EIT should identify strategic long-term challenges 
for innovation in Europe, particularly in trans- and/or inter-disciplinary areas including 
those  already  identified  at  European  level,  and  should  provide  a  transparent  and 
excellence-based  selection  process  for  Knowledge  and  Innovation  Communities 
(hereinafter referred to as “KICs”) in these fields; membership of the Governing Board 
of  the  EIT  should  balance  experience  from  the  business  and  the  research/academic 
worlds. 

In  order  to  contribute  to  the  competitiveness  and  to  reinforce  the  international 
attractiveness  of  the  European  economy,  the  EIT  should  be  able  to  attract  partner 
organisations, researchers and students from all over the world and to cooperate with 
third-countries organisations. 

The  EIT  should  primarily  operate  through  excellence-driven  long-term  strategic 
partnerships on an inter and/or trans-disciplinary basis of key potential economic and 
societal interest for Europe. These partnerships shall be selected by the EIT Governing 
Board and designated as KICs. The relations between  the EIT and the KICs shall be 
based on contractual agreements, which will set out the KICs' rights and obligations, 
ensure  an  adequate  level  of  coordination  and  outline  the  mechanism  for  monitoring 
and evaluation of the KICs activities and outcomes. 

(10)  There is a need to support education as an integral but often missing component of a 
comprehensive innovation strategy. The agreement between the EIT and KICs should 
provide  that  the  degrees  and  diplomas  awarded  through  the  KICs  should  be  EIT 
degrees  and  diplomas.  The  EIT  should  promote  the  recognition  of  EIT  degrees  and 
diplomas  in  the  Member  States.  All  these  activities  should  be  carried  out  without 
prejudice to Directive 2005/36/EC on the recognition of professional qualifications7. 

(11)  The  EIT  should  establish  guidelines  for  the  management  of  intellectual  property, 
which  should  foster  the  use  of  intellectual  property  under  appropriate  conditions, 
including  through  licensing;  provide  appropriate  incentives  for  the  EIT  and  partners, 
including individuals involved, KICs and partner organisations as well as for spin-offs 
and for commercial exploitation. Where activities were funded under the Community 
Framework  Programmes  for  Research  and  Technological  Development,  the  rules  of 
those programmes would apply.  

(12)  Appropriate  provisions  must  be  made  to  guarantee  the  liability  and  transparency  of 
the EIT.  Appropriate  rules  governing  its  functioning  are  adopted  in  the  Statutes  of 
the EIT. 

(13) 

In order to guarantee the functional autonomy and independence of the EIT, it should 
administer  its  own  budget  whose  revenue  should  include  a  contribution  from  the 
Community  as  well  as  contributions  from  Member  States  and  private  organisations, 
national  or  international  bodies  or  institutions,  revenues  generated  by  the  EIT’s  own 

7 

Directive  2005/36/EC  of  the  European  Parliament  and  of  the  Council  of  7  September  2005  on  the 
recognition of professional qualifications (OJ L 255, 30.9.2005). 

EN 

12 

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activities  or  endowments.  The  EIT  should  seek  to  attract  an  increasing  financial 
contribution from private organisations. 

(14)  The  Community  budgetary  procedure  should  be  applicable  as  far  as  the  Community 
subsidy and any other grants chargeable to the general budget of the European Union 
are concerned. 

(15)  This Regulation establishes a financial framework for the period 2008 to 2013 which 
is to be the principal point of reference for the budgetary authority, within the meaning 
of point 37 of the Inter-institutional Agreement of 17 May 2006 between the European 
Parliament,  the  Council  and  the  Commission  on  budgetary  discipline  and  sound 
financial management. 

(16)  The EIT is a body set up by the Communities in the sense of Article 185(1) of Council 
Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation 
applicable to the general budget of the European Communities8 and should adopt its 
financial rules accordingly.  

(17)  The Governing Board should adopt a rolling triennial work programme that should be 
examined  by  the  Commission,  with  regard  to  its  complementarity  with  Community 
policies and instruments, and an annual report, including a full statement of accounts, 
which  should  be  transmitted  to  the  Commission  and  communicated  to  the  European 
Parliament, the Council and the Court of Auditors. 

(18) 

It is appropriate that the European Parliament, the Council and the Commission should 
be  entitled  to  address  an  opinion  on  the  EIT  work  programme,  its  annual  report, 
including the statement of accounts.  

(19) 

It is appropriate to review the operation of the EIT at regular intervals. 

(20)  Since  the  objectives  of  the  action  cannot  be  sufficiently  achieved  by  the  Member 
States,  and  can  by  reason  of  scale  and  of  trans-nationality,  be  better  achieved  at 
Community  level,  the  Community  may  adopt  measures,  in  accordance  with  the 
principle  of subsidiarity  as  set  out  in  Article 5 of the Treaty.  In accordance with the 
principle of proportionality set out in that Article, the Regulation does not go beyond 
what is necessary to achieve those objectives. 

HAVE ADOPTED THIS REGULATION:  

Article 1 
Subject matter  

A European Institute of Technology (hereinafter referred to as "the EIT"), is established. 

8 

OJ L 248, 16.9.2002, p. 1. 

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13 

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Article 2 
Definitions 

For the purpose of this Regulation, the following definitions shall apply: 

1. 

2. 

3. 

4. 

5. 

6. 

“Innovation”  means  the  process  and  the  outcomes  of  this  process  through  which 
new  ideas  respond  to  societal  or  economic  demand  and  generate  new  products, 
services, or business models that are successfully introduced in an existing market or 
that are able to create new markets.  

“Knowledge  and  Innovation  Community”  means  a  joint-venture  of  partner 
organisations, whatever its precise legal form, selected and designated by the EIT to 
carry out at the highest level integrated innovation, research and education activities 
in a specific field. 

“University” means any type of higher education institution which offers recognised 
degrees  or  other  recognised  tertiary  level  qualifications,  irrespective  of  its 
denomination in the national context. 

“Research organisation” means any public or private legal entity which undertakes 
research or technological development as one of its main objectives.  

“Partner organisation” means any organisation which is member of a KIC and may 
in  particular:  universities,  research  organisations,  public  or  private 
include 
companies, financial institutions, regional and local authorities, foundations. 

“Partnership”  means  a  group  of  potential  partner  organisations  who  have  come 
together to be a candidate for a KIC.  

Article 3 
Objective  

The  objective  of  the  EIT  is  to  contribute  to  industrial  competitiveness  by  reinforcing  the 
innovation capacity of Member States and the Community. It shall do this by involving and 
integrating innovation, research and education at the highest standards. 

1. 

In order to achieve this objective, the EIT shall: 

Article 4 
Tasks 

(a) 

(b) 

identify strategic long-term challenges in fields of key potential economic and 
societal interest for Europe, which are likely to generate on a long term basis 
the best innovation added value; 

define its own priorities  among those  challenges, and select those  in  which it 
will take initiatives and invest resources; 

(c) 

raise awareness among potential partner organisations; 

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14 

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(d) 

(e) 

select  and  designate  KICs  in  the  priority  fields  and  define  their  rights  and 
obligations  by  agreement;  provide  them  with  appropriate  support;  apply 
appropriate  quality  control  measures;  continuously  monitor  and  periodically 
evaluate  their  activities;  and  ensure  an  appropriate  level  of  coordination 
between them; 

mobilise  the  necessary  funds  from  public  and  private  sources  and  use  its 
resources in accordance with this Regulation. It will in particular seek to raise 
an  increasing  proportion  of  its  budget  from  private  sources  and  from  its  own 
resources; 

(f) 

promote the recognition of EIT degrees and diplomas in the Member States. 

2. 

A Foundation (hereinafter referred to as "the EIT Foundation"), may be established, 
particularly at the initiative of the EIT, with the specific objective of promoting and 
supporting the activities of the EIT. 

The EIT may contribute up to 3% of its annual budget to such a Foundation. 

Article 5 
The Knowledge and Innovation Communities 

1. 

Knowledge and Innovation Communities shall undertake in particular: 

(a) 

(b) 

(c) 

(d) 

innovation  activities  and  investments  fully  integrating  the  research  and 
education dimensions, stimulating the dissemination and exploitation of results. 

cutting-edge  research  in  fields  of  key  economic  and  societal  interest  for 
European Community with a strong innovation potential 

education  and  training  activities  at  master  and  doctoral  level,  including  the 
development  of  innovation  related  skills  and  the  improvement  of  managerial 
and entrepreneurial skills. 

dissemination  of  best  practices,  in  particular  concerning  the  governance  of 
innovation  oriented  organisations  and  the  development  of  co-operation  or 
partnerships between education/research and business. 

2. 

A  partnership  will  be  selected  by  the  EIT  to  become  a  KIC  on  the  basis  of  a 
competitive,  open  and  transparent  process,  including  the  publication  of  detailed 
specifications and conditions. 

The selection of partnerships shall take particular account of : 

(a) 

the current and potential innovation capacity within the partnership as well as 
its excellence in education and research; 

(b) 

its capacity to achieve the goals set by the EIT; 

(c) 

financial or in kind contributions brought to the KIC; 

EN 

15 

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(d) 

a demonstration of innovation potential, including a plan for the management 
of intellectual property appropriate to the sector concerned and consistent with 
the EIT principles and guidelines for the management of intellectual property. 

The selection shall also take account of: 

(a) 

(b) 

(c) 

an operational structure demonstrating commitment to the EIT and its goals; 

the capacity to ensure a dynamic, flexible and attractive working environment 
which rewards both individual and team achievements in terms of innovation, 
research and education;  

the basis on which the degrees and diplomas would be awarded including the 
arrangements to take in account the Community policy on the European Higher 
Education  Area,  particularly 
transparency, 
recognition and quality of degrees and diplomas; 

terms  of  compatibility, 

in 

(d) 

the  capacity  of  the  partnership  to  adapt  and  take  account  of  changes  in  their 
field or in the innovation landscape. 

The resources of the KICs shall be generated from public and private sources. They 
may include in particular contributions from and/or channelled through the EIT and 
contributions from the partner organisations. 

The  partnerships  may  include  partner  organisations  from  third  countries  that  can 
make a positive contribution to the objectives of the KICs. 

Article 6 
Degrees and diplomas  

The  agreement  between  the  EIT  and  the  KICs  shall  provide  that,  in  the  disciplines 
and  fields  under  which  studies,  research  and  innovation  activities  are  carried  out 
through KICs, degrees and diplomas awarded through KICs shall be EIT degrees and 
diplomas.  

The  EIT shall encourage partner organisations to award joint degrees and diplomas 
reflecting  the  integrated  nature  of  the  KICs.  However,  these  may  also  be  degrees 
awarded by one institution as well as double or multiple degrees and diplomas.  

3. 

4. 

1. 

2. 

3. 

The Member States cooperate in recognising EIT degrees and diplomas.  

Article 7 
Independence of the EIT and consistency with Community, Member States or 
Intergovernmental action 

1. 

The  EIT  shall  carry  out  its  activities  independently  from  national  authorities  and 
external  pressures.  It  shall  be  autonomous  in  its  day  to  day  business  as  regards  the 
Community Institutions. Members of the EIT bodies shall take the necessary steps to 
avoid conflicts of interest as between their work on behalf of the EIT and previous or 
concurrent activities.  

EN 

16 

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2. 

3. 

The activity of the EIT shall be consistent with other action at Community level, in 
particular in the fields of innovation, research and education.  

The EIT shall also take appropriate account of policies and initiatives at national and 
intergovernmental levels.  

Article 8 
The EIT Bodies 

1. 

The bodies of the EIT shall be: 

(a) 

(b) 

(c) 

(d) 

A Governing Board composed of high level members experienced in business, 
research and education, which shall be responsible for steering and evaluating 
the activities of the EIT and the KICs, and for all other strategic decisions.  

An Executive Committee which shall oversee the running of the EIT and take 
such decisions as are necessary between meetings of the Governing Board.  

A  Director  who  shall  be  responsible  to  the  Governing  Board  for  the 
administrative  and  financial  management  of  the  EIT  and  shall  be  the  legal 
representative of the EIT.  

An Audit Committee which shall advise the Governing Board and the Director 
on  financial  and  administrative  management  and  control  structures  within  the 
EIT, on the organisation of financial links with KICs, and on any other subject 
requested by the Governing Board.  

The  Commission  may  appoint  observers  to  take  part  in  the  meetings  of  the 
Governing Board and the Executive and Audit Committees. 

Article 9 
Management of Intellectual Property  

The  EIT  shall  define  and  make  public  its  principles  and  guidelines  for  the 
management of intellectual property. They shall: 

(a) 

contribute to EU innovation capacity; 

(b) 

take account of the specificities of the sector concerned; 

(c) 

(d) 

foster the use of Intellectual Property under appropriate conditions for research 
and  innovative  purposes,  in  particular  by  defining  how  Intellectual  Property 
will be shared between the EIT and its partners;  

provide appropriate incentives  for the EIT  and partners, including  individuals 
involved, KICs and partner organizations; 

(e) 

provide specific incentives for spin-offs and for commercial successes. 

2. 

1. 

EN 

17 

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2. 

Partner organisations shall demonstrate in their application to be a KIC an agreement 
between  themselves  on  the  following  issues  in  accordance  with  the  principles  and 
guidelines referred to in paragraph 1: 

(a) 

ownership,  management  and  protection  of  research  and  development  results 
and other outcomes; 

(b) 

rights of access to such results and outcomes as well as background;  

(c) 

(d) 

sharing  of  costs  and  profits,  taking  due  account  of  the  contributions  of  the 
various partner organisations;  

specific  provisions,  bonuses  or  incentives  to  encourage  the  development  and 
the  use  of  research  and  development  results  and  other  outcomes,  including 
spin-offs arising from the use of these results. 

1. 

2. 

1. 

2. 

3. 

4. 

Article 10 
Legal Status 

The EIT shall have legal personality. In each of the Member State, it shall exercise 
the widest possible legal powers accorded to legal persons under national legislation. 
In particular, it may acquire or dispose of tangible or intangible assets and be a party 
to legal proceedings. 

The  Protocol  on  the  Privileges  and  Immunities  of  the  European  Communities  shall 
apply to the EIT. 

Article 11 
Liability  

The EIT shall be solely responsible for meeting its obligations. 

The  contractual  liability  of  the  EIT  shall  be  governed  by  the  relevant  contractual 
provisions and the law applicable to the contract in question. 

Contracts  entered  into  by  the  EIT  shall  provide  that  the  Court  of  Justice  of  the 
European Communities shall have jurisdiction. 

In the case of non-contractual liability, the EIT shall, in accordance with the general 
principles common to the laws of the Member States, make good any damage caused 
by it or its servants in the performance of their duties. 

The  Court  of  Justice  of  the  European  Communities  shall  have  jurisdiction  in  any 
dispute relating to compensation for such damage. 

Any payment by the EIT for covering the liability referred to in paragraphs 2 and 3 
and  the  costs  and  expenses  incurred  in  connection  therewith  shall  be  considered 
expenditure of the EIT and shall be covered by the resources of the EIT. 

EN 

18 

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Article 12 
Transparency and access to documents 

The  EIT  shall  ensure  that  its  activities  are  conducted  with  a  high  level  of 
transparency. 

The EIT shall make public without delay : 

(a) 

its rules of procedure 

(b) 

its rolling triennial working programme as well as its annual activity report. 

Without  prejudice  to  paragraphs  4  and  5,  the  EIT  shall  not  divulge  to  third  parties 
confidential  information  it  has  received  for  which  confidential  treatment  has  been 
requested and is justified. 

The  members  of  the  EIT  bodies  shall  be  subject  to  the  confidentiality  requirement 
referred to in Article 287 of the Treaty. 

The information gathered by the EIT in accordance with the present Regulation shall 
be subject to Regulation (EC) No 45/20019. 

Regulation (EC) No 1049/200110 shall apply to the documents held by the EIT. The 
Governing Board shall adopt practical arrangements for applying the said regulation 
no later than six months after the EIT has been set up. 

1. 

2. 

3. 

4. 

5. 

Article 13 
Resources 

1. 

The EIT shall be financed in particular through: 

(a) 

contributions from the European Union budget; 

(b) 

contributions from Member States or public authorities within them; 

(c) 

contributions from business or private organisations; 

(d) 

(e) 

bequests,  donations  and  contributions 
foundations or any other national bodies; 

from 

individuals, 

institutions, 

revenue  generated  by  the  EIT’s  own  activities  and  outcomes  or  capital 
endowments,  including  those  managed  by  the  EIT  Foundation  or  from 
Intellectual Property Rights;  

(f) 

contributions from third countries and international bodies or institutions; 

These may include contributions in kind. 

9 
10 

OJ L 8, 12.1.2001, p. 1. 
OJ L 145, 31.5.2001, p. 43. 

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19 

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2. 

The  EIT  may  apply  for  and/or  channel  Community  assistance  in  particular  in  the 
framework of Community programmes and funds. In that case, such assistance shall 
not be attributed for activities already funded through the Community budget.  

Article 14 
Programming and Accountability 

1. 

The EIT shall adopt :  

(a) 

(b) 

a  rolling  triennial  work  programme  containing  a  statement  of  its  major 
priorities and planned initiatives including an estimate of financing needs and 
sources. The draft work programme shall be submitted by the Governing Board 
to  the  Commission.  The  Commission  shall  deliver  an  opinion  within  three 
months  with  regard  to  its  complementarity  with  Community  policies  and 
instruments.  Where  the  Commission  expresses  disagreement,  the  Governing 
Board  shall  re-examine  the  programme  and  adopt  it  with  any  appropriate 
amendments. 

an  annual  report  by  30  June  each  year.  The  report  shall  outline  the  activities 
conducted  by  the  EIT  during  the  preceding  year  and  assess  the  results  with 
respect  to  the  objectives  and  timetable  set,  the  risks  associated  with  the 
activities carried out, the use of resources and the general operation of the EIT. 
It shall include a full audited statement of accounts.  

The rolling triennial work programme and the annual report shall be  transmitted to 
the  Commission,  which  shall  communicate  them  to  the  European  Parliament,  the 
Council and the European Court of Auditors. 

The European Parliament, the Council or the Commission may address an opinion to 
the Governing Board of the EIT on any subject covered in the rolling triennial work 
programme.  Where  such  opinions  are  addressed  to  the  EIT,  the  Governing  Board 
shall  reply  within  a  period  of  3  months,  indicating  any  adjustments  in  its  priorities 
and planned activities. 

Article 15 
Evaluation of the EIT 

The EIT shall ensure that its activities, including those managed through KICs, shall 
be subject to continuous monitoring and periodic independent evaluation, to ensure 
both  the  highest  quality  of  outcome  and  the  most  efficient  use  of  resources.  The 
outcomes of the evaluation shall be made public. 

Within five years from the date of adoption of this Regulation and every four years 
thereafter, the Commission shall make public an evaluation of the EIT. This shall be 
based on an independent external evaluation, and shall examine how the EIT fulfils 
its mission. It shall cover all activities of the EIT and the KICs and shall examine the 
effectiveness,  sustainability,  efficiency  and  relevance  of  the  activities  pursued  and 
their  relation  with  Community  policies.  It  shall  take  into  account  the  views  of 
stakeholders, at both European and national level.  

2. 

3. 

1. 

2. 

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20 

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3. 

The  Governing  Board  shall  take  due  account  of  the  findings  of  evaluations  in  the 
programmes and operations of the EIT. 

Article 16 
Budgetary Commitments 

The indicative financial envelope for the implementation of this Regulation during the period 
of  6  years  as  from  1  January  2008  is  set  at  EUR  308.7  million.  The  annual  appropriations 
shall be authorised by the budgetary authority within the limits of the financial framework. 

Article 17 
Preparation and adoption of the annual budget 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

The expenditure of the EIT shall include the staff, administrative, infrastructure and 
operational expenses. 

The financial year shall correspond to the calendar year. 

The Director shall draw up an estimate of the revenue and expenditure of the EIT for 
the following financial year and shall forward it to the Governing Board.  

Revenue and expenditure shall be in balance. 

The Governing Board shall adopt the draft estimate accompanied by the preliminary 
rolling  triennial  work  programme,  and  forward  them  by  31  March  to  the 
Commission. 

On  the  basis  of  the  estimate,  the  Commission  shall  enter  in  the  preliminary  draft 
general  budget  of  the  European  Union  the  estimates  it  deems  necessary  for  the 
amount of the subsidy to be charged to the general budget.  

The budgetary authority shall authorise the appropriations for the subsidy to the EIT.  

The Governing Board adopts the EIT budget, which shall become final following the 
final  adoption  of  the  general  budget  of  the  European  Union.  Where  appropriate,  it 
shall be adjusted accordingly. 

9. 

Any substantial modification to the budget shall follow the same procedure. 

Article 18 
Implementation and control of the budget 

1. 

2. 

3. 

The EIT shall adopt its financial rules in accordance with Article 185(1) of Council 
Regulation (EC, Euratom) No 1605/2002. Due account shall be given to the need for 
adequate  operational  flexibility  in  order  to  enable  the  EIT  to  achieve  its  objectives 
and attract and retain private sector partners. 

The Director shall implement the budget of the EIT. 

The accounts of the EIT shall be consolidated with the Commission’s accounts. 

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21 

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4. 

1. 

2. 

3. 

4. 

Upon a recommendation from the Council, the European Parliament shall, before 30 
April of the year n + 2, give a discharge for the year n, to the Director in respect of 
the implementation of the EIT budget, and to the Governing Board in respect to the 
Foundation. 

Article 19 
Protection of the financial interests of the Community 

With  a  view  to combating fraud, corruption and other illegal acts, Regulation  (EC) 
No 1073/199911 shall apply to the EIT in its entirety. 

The EIT shall accede to the Inter-institutional Agreement of 25 May 1999 between 
the European Parliament, the Council of the European Union and the Commission of 
the European Communities concerning internal investigations by the European Anti-
fraud  Office  (OLAF)12.  The  Governing  Board  shall  formalise  this  accession  and 
adopt the necessary measures to help OLAF carry out internal investigations. 

All  decisions  adopted  and  contracts  concluded  by  the  EIT,  shall  provide  explicitly 
that  OLAF  and  the  Court  of  Auditors  may  carry  out  on-the-spot  inspections  of  the 
documents  of  all  contractors  and  sub-contractors  which  have  received  Community 
funds, including at the premises of the final beneficiaries.  

The provisions set out in paragraphs (1), (2) and (3) shall apply, mutatis mutandis, to 
the EIT Foundation.  

Article 20 
Review clause  

Five  years  after  the  adoption  of  this  Regulation  and  every  four  years  thereafter,  the 
Commission  shall  report  to  the  European  Parliament  and  to  the  Council  on  the 
implementation  of  this  Regulation  and  on  the  operation  of  the  EIT  and  shall  make  any 
appropriate proposals for the amendment of this Regulation. 

The Commission reports shall take account of the annual reports from the Governing Board 
provided for under Article 14 and the external evaluations provided for under Article 15. 

The statutes of the EIT, as set out in the Annex, are adopted. 

Article 21 
Statutes 

11 
12 

OJ L 136, 31.5.1999, p. 1. 
OJ L 136, 31.5.1999, p. 15. 

EN 

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Article 22 
Entry into Force  

This Regulation shall enter into force on the 20th day following that of its publication in the 
Official Journal of the European Union.  

This Regulation shall be binding in its entirety and directly applicable in all Member States.  

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

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ANNEX  

Statutes of the European Institute of Technology 

Article 1 
Composition of the Governing Board 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

1. 

2. 

The Governing Board shall consist both of appointed members providing a balance 
between those with business experience and those with academic/research experience 
(hereafter:  “appointed  members”)  and  members  elected  by  and  from  among  the 
innovation,  research,  academic,  technical  and  administrative  staff,  students  and 
doctoral candidates of the EIT and the KICs (hereafter “representative members”).  

There shall be 15 appointed members. They shall have a 6-year non-renewable term 
of office. They shall be appointed by the Commission on the basis of proposals from 
an  Identification  Committee.  This  Identification  Committee  will  be  composed  of  4 
independent high level experts appointed by the Commission.  

The  Commission  shall  have  regard  to  the  balance  between  academic/research  and 
business  experience  as  well  as  to  gender  balance  and  an  appreciation  of  the 
innovation, research and education environments across the Union. 

One  third  of  the  appointed  members  shall  be  replaced  every  two  years.  Members 
whose terms of office expire after the second and fourth years  following the initial 
nomination of the Governing Board shall be drawn by lot.  

There  shall  be  4  representative  members.  They  shall  have  a  3-year  term  of  office, 
renewable once. Their term of office shall cease if they leave the EIT or a KIC. They 
shall be replaced through the same process for the remainder of the mandate. 

The  conditions  and  modalities  for  election  and  replacement  of  the  “representative 
members” shall be approved by the Governing Board on the basis of a proposal from 
the  Director  before  the  first  KIC  is  in  operation.  This  mechanism  shall  ensure  an 
appropriate representation of the diversity and shall take into account the evolution 
of the EIT and the KICs.  

In  the  event  that  a  member  of  the  Governing  Board  is  unable  to  terminate  his 
mandate, a substitute member shall be appointed or elected by the same procedure as 
the incapacitated member in order to complete his mandate. 

Article 2 
Responsibilities of the Governing Board 

The Governing board members shall act in the interests of the EIT, safeguarding its 
goals and mission, identity and coherence. 

The Governing Board shall, in particular: 

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24 

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(a) 

approve the EIT strategy as enshrined in its triennial rolling work programme, 
its budget, its annual accounts and balance-sheet and its annual activity report 
on the basis of a proposal from the Director; 

(b) 

define the fields in which to establish the KICs; 

(c) 

(d) 

adopt rigorous, transparent and user-friendly procedures for selection of KICs; 
these  procedures  shall  include  external  expert  evaluation  and  shall  cover  the 
relations between the EIT and the KICs; 

select  and  designate  a  partnership  as  a  KIC  or  withdraw  the  designation  if 
necessary;  

(e) 

ensure continuing evaluation of the activities of KICs; 

(f) 

(g) 

(h) 

(i) 

(j) 

(k) 

adopt  its  rules  of  procedure,  and  those  for  the  Executive  and  Audit 
Committees; 

shall  define,  with  the  Commission’s  agreement,  appropriate  honoraria  for 
members of the Governing Board and of the Executive and Audit Committees; 
these honoraria shall be benchmarked against similar provision in the Member 
States; 

adopt a procedure for choosing the Executive Committee, the Audit Committee 
and the Director; 

appoint  the  Director,  the  Accounting  Officer,  and  the  members  of  the 
Executive Committee and the Audit Committee; 

establish  where  appropriate  advisory  groups  which  may  have  a  defined 
duration; 

promote  the  EIT  globally,  so  as  to  raise  its  attractiveness  and  make  it  an 
“international player” for excellence in education, research and innovation; 

(l) 

adopt a code of good conduct regarding conflicts of interest; 

(m) 

define  principles  and  guidelines  for  the  management  of  intellectual  property 
rights.  

3. 

4. 

The Governing Board may delegate specific tasks to the Executive Committee. 

The  Governing  Board  shall  elect  its  Chairperson  from  among  the  appointed 
members. The mandate of the Chairperson shall be for a period of 3 years, renewable 
once. 

Article 3 
Functioning of the Governing Board 

1. 

The Governing Board shall adopt decisions by simple majority of all its members. 

EN 

25 

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However, decisions  under Article 2, paragraph 2 (a), (b), (c), (d) and (i) and under 
paragraph 4 of these statutes shall require a majority of two thirds of all its members. 

The Governing Board shall meet in ordinary session at least three times a year, and 
in extraordinary session when convened by its Chairperson or on request of at least 
one third of its members. 

As  a  transitional  provision,  the  Governing  Board  shall  consist  exclusively  of 
appointed members until elections for representative members can be held, after the 
first KIC has been established. 

Article 4 
The Executive Committee 

The Executive Committee shall consist of five persons including the Chairperson of 
the Governing Board who will also chair the Executive Committee. 

The  four  members  other  than  the  Chairperson  shall  be  chosen  by  the  Governing 
Board from among the “appointed members”. 

The  Executive  Committee  shall  meet  on  a  regular  basis  as  convened  by  its 
Chairperson or on the request of the Director. 

The Executive Committee takes its decisions by simple majority of all its members. 

The Executive Committee shall: 

(a) 

prepare the meetings of the Governing Board; 

(b) 

oversee the implementation of the EIT’s rolling triennial work programme; 

(c) 

oversee the selection procedure for KICs;  

(d) 

take any decisions delegated to it by the Governing Board. 

Article 5 
The Director 

The Director shall be a person with expertise and high reputation in the areas where 
the EIT operates. He shall be appointed by the Governing Board for a term of office 
of  4  years.  The  Governing  Board  may  extend  that  term  of  office  once  by  4  years 
when it considers that the interests of the EIT are best served by so doing. 

The Director shall be responsible for the day-to-day management of the EIT and be 
its legal representative. He shall be accountable to the Governing Board to which he 
will report on an ongoing basis on the development of the EIT activities. 

2. 

3. 

1. 

2. 

3. 

4. 

1. 

2. 

3. 

The Director shall in particular: 

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26 

   EN 

 
(a) 

(b) 

(c) 

support the Governing Board and the Executive Committee in their work and 
provide the secretariat for their meetings; 

prepare  the  draft  strategy  and  budget  for  submission  to  the  Governing  Board 
through the Executive Committee; 

administer the selection process for KICs; and ensure that the various stages of 
that process are carried out in a transparent and objective manner; 

(d) 

organise and manage the activities of the EIT; 

(e) 

be  responsible  for  administrative  and  financial  matters,  including  the 
implementation of the EIT budget. In this the Director shall take due account of 
advice received from the Audit Committee; 

(f) 

be responsible for all staff matters; 

(g) 

(h) 

(i) 

(j) 

prepare  the  draft  rolling  triennial  work  programme  and  annual  report  on  the 
EIT activities and submit them to the Governing Board; 

submit  the  draft  annual  accounts  and  balance  sheet  to  the  Audit  Committee, 
and subsequently to the Governing Board, through the Executive Committee; 

ensure  that  the  obligations  of  the  EIT  with  regard  to  the  contracts  and 
agreements it concludes are met; 

provide  the  Executive  Committee  and  the  Governing  Board  with  all 
information necessary for the performance of their functions. 

Article 6 
The Audit Committee 

The Audit Committee shall consist of 5 persons appointed for a period of 4 years by 
the  Governing  Board  after  consultation  of  the  Commission  from  external  advisors 
with  appropriate  expertise  in  the  audit  and  financial  control  of  academic,  research 
and business organisations.  

The  Audit  Committee  shall  perform  its  duties  in  complete  independence  from  the 
other bodies of the EIT. 

The Audit Committee shall elect its Chairperson.  

The  Audit  Committee  shall 
recommendations to the Governing Board and the Director.. 

review 

the  provisional  accounts  and 

issue 

The  functions  entrusted  by  Article  185(3)  of  Regulation  (EC,  Euratom)  No 
1605/2002  to  the  Commission’s  internal  auditor  shall  be  carried  out  under  the 
responsibility of the Audit Committee, which shall make appropriate provision. 

1. 

2. 

3. 

4. 

5. 

EN 

27 

   EN 

 
1. 

2. 

3. 

4. 

1. 

Article 7 
Staff of the EIT  

The staff  of the EIT shall consist  of  personnel employed directly by the EIT  under 
fixed  term  contracts.  The  conditions  of  employment  of  other  servants  of  the 
European Communities shall apply to the Director and the Staff of the EIT. 

Experts may be seconded to the EIT for a limited duration by Member States or other 
employers.  

The  Governing  Board  shall  adopt  provisions  enabling  seconded  experts  from 
Member States or other employers to work at the EIT and defining their rights and 
responsibilities. 

The EIT shall exercise, with regards to its staff, the powers which are devolved to the 
authority authorized to conclude the contracts with the staff members. 

A member of staff may be required to make good, in whole or in part, any damage 
suffered by the EIT as a result of serious misconduct on his part in the course of or in 
connection with the performance of his/her duties. 

Article 8 
Principles guiding the organization and management of the Knowledge and Innovation 
Communities 

The Governing Board shall adopt a framework of guidance on which it shall base the 
conditions and terms of the agreements with the KICs and on financing, monitoring 
and evaluating their activities. It shall be made public before the selection process for 
KICs begins.  

2. 

The Governing Board shall in particular provide guidance as to: 

(a) 

(b) 

monitoring and evaluation of the KICs and the participation of the EIT in their 
governance.  

integration  of  the  business  dimension  into  research  and  education  activities, 
including  the  planning  and  implementation  of  educational  activities  and 
research  and  development  efforts;  staff  and  student/researcher  mobility 
between  the  business  and  the  academic/research  sectors;  the  provision  of 
educational  content  that  takes  into  account  business,  management  and 
innovation  related  issues;  the  sharing  of  results  and  revenues  arising  from 
results between partners; dissemination of outcomes and good practices to non-
partner organisations including small and medium-sized enterprises. 

(c) 

how to ensure that curricula and internal practices foster an entrepreneurial and 
innovation mindset. 

3. 

Within  the  terms  of  their  agreement  with  the  EIT,  KICs  shall  have  substantial 
autonomy  to  define  their  internal  organisation  as  well  as  their  precise  agenda  and 
working methods. 

EN 

28 

   EN 

 
Article 9 
Principles for the evaluation and monitoring of the Knowledge and Innovation Communities 

The  EIT  shall  organise  continuous  monitoring  and  periodic  independent  evaluations  of  the 
outcomes and results of each KIC. These evaluations shall be based on good administrative 
practice and result-oriented parameters and avoid unnecessary formal and procedural aspects. 

Article 10 
Duration, Continuation and Termination of a Knowledge and Innovation Community  

Subject to the outcomes of periodic evaluations and to the specificities of particular 
fields, a KIC shall normally have a time-frame of 7-15 years. 

The  Governing  Board  may  exceptionally  decide  to  extend  the  operation  of  a  KIC 
beyond  the  period  initially  set  if  this  is  the  most  appropriate  way  to  achieve  the 
objective of the EIT. 

In the event that evaluations of a KIC show inadequate results, the Governing Board 
shall  take  appropriate  measures  including  reduction,  modification  or  withdrawal  of 
its financial support or termination of the agreement.  

Article 11 
Implementation and control of the budget 

By 1 March at the latest following each financial year, the EIT’s accounting officer 
shall communicate the provisional accounts together with a report on the budgetary 
and  financial  management  to  the  Audit  Committee,  the  Commission’s  accounting 
officer and the Court of Auditors. 

On receipt of the Audit Committee's opinion and the Court of Auditors’ observations 
on  the  EIT’s  provisional  accounts,  the  Director  shall  draw  up  the  EIT’s  final 
accounts under his own responsibility and submit them to the Governing Board for 
an opinion.  

The Governing board shall deliver an opinion on the EIT's final accounts. 

By  1  July  of  the  following  year  at  the  latest,  the  Director  shall  send  the  final 
accounts, together with the opinion of the Governing Board, to the Commission, the 
Court of Auditors, the European Parliament and the Council. 

The  Director  shall  send  the  Court  of  Auditors  a  reply  to  its  observations  by  30 
September at the latest. He shall also send this reply to the Governing Board. 

1. 

2. 

3. 

1. 

2. 

3. 

4. 

5. 

Article 12 
Winding up of the EIT 

In the event of winding up of the EIT, its liquidation shall intervene under the supervision of 
the Commission in conformity with the laws applicable. The agreements with the KICs and 

EN 

29 

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the  act  establishing  the  EIT  Foundation  shall  lay  down  the  appropriate  provisions  in  such 
situation.

EN 

30 

   EN 

 
LEGISLATIVE FINANCIAL STATEMENT 

1. 

NAME OF THE PROPOSAL: 

Regulation of the European Parliament and the Council establishing the European Institute of 
Technology 

2. 

ABM / ABB FRAMEWORK 

Policy Area(s) concerned and associated Activity/Activities:  

Sub-Heading 1a: Competitiveness for Growth and Employment 

3. 

BUDGET LINES 

3.1. 

Budget  lines  (operational  lines  and  related  technical  and  administrative 
assistance lines (ex- B..A lines)) including headings: 

3.2. 

Duration of the action and of the financial impact: 

3.3. 

Budgetary characteristics: 

Budget 
line 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

02021001 

Non-
comp 

02021002 

Non-
comp 

Diff 

YES 

NO 

YES 

Heading 1a 

Diff 

YES 

NO 

YES 

Heading 1a 

4. 

SUMMARY OF RESOURCES 

4.1. 

Financial Resources 

4.1.1. 

Summary of commitment appropriations (CA) and payment appropriations (PA); 

The first lines of the table represent the appropriations to be taken from the margins 
beneath the ceiling of heading 1A.  

EN 

31 

   EN 

 
 
 
 
 
 
 
 
Expenditure 
type 

Section 
no. 

Operational expenditure 

Governing Structure 

Commitment 
Appropriations 
(CA) 

Payment 
Appropriations 
(PA) 

8.1. 

a 

b 

EIT activities, in particular Knowledge 
and Innovation Communities, Grants 
and Improvement of 
innovation/research/education capacity 

Commitment 
Appropriations 
(CA) 

Payment 
Appropriations 
(PA) 

8.1. 

c 

d 

TOTAL REFERENCE AMOUNT 

EUR million (to 3 decimal places) 

2008 

2009

2010 

2011 

2012 

2013 

2014 

Total 

2.900  5.800 

8.700 

8.700 

8.700 

8.700 

43.500 

2.900  5.800 

8.700 

8.700 

8.700 

8.700 

43.500 

41.300 

51.300 

66.300 

106.300 

265.200 

  33.040  49.300  63.300 

98.300  21.260  265.200 

Commitment 
Appropriations 
Payment 
Appropriations 

8.1 

a+c  2.900 

5.800 

50.000 

60.000 

75.000 

115.000 

308.700 

b+d  2.900  5.800  41.740  58.000  72.000  107.000  21.260  308.700 

Administrative expenditure not included in reference amount 

8.2.5. 

8.2.6. 

e 

f 

Human 
resources and 
associated 
expenditure 
(NDA) 

Administrative 
costs, other than 
human 
resources and 
associated costs, 
not included in 
reference 
amount (NDA) 

0.594  0.594 

0.324 

0.324 

0.324 

0.324 

2.484 

0.300  0.050 

0.050 

0.050 

0.550 

0.050 

1.050 

EN 

32 

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Total indicative financial cost of intervention 

TOTAL CA 
including cost 
of Human 
Resources 

TOTAL PA 
including cost 
of Human 
Resources 

a+c++e+f  3.794  6.444  50.374  60.374  75.874  115.374 

  312.234 

b+d+e+f  3.794  6.444  42.114  58.374  72.874  107.374  21.260  312.234 

Co-financing details 

The  activities  of  the  EIT  and  the  Knowledge  and  Innovation  Communities  (KICs)  will  be 
financed from a combination of sources:  

1. 

from external sources including:  

(a)  Member State, regional or local authorities; 

(b) 

private sources (companies, venture capital, banks, including the EIB);  

(c) 

resources resulting from its own activity (eg, from intellectual property rights);  

(d) 

resources from the endowments the EIT may accumulate; 

2. 

from Community sources through the budget to the EIT or to the KICs directly, from 
unallocated  margins  beneath  the  ceiling  of  sub-heading  1A,  and  through  the 
structural Funds and participation, in accordance with normal procedures, in the 7th 
Framework Programme, the Lifelong Learning Programme, the Competitiveness and 
Innovation Programme.  

Resources  flowing  to  the  EIT  directly  would  be  used:  (i)  to  finance  the  KICs  through  a 
competitive  process  based  on  excellence  and  in  accordance  with  the  criteria  set  by  the 
Governing Board of the EIT; (ii) to finance the running costs of the EIT; or (iii) to contribute 
to the EIT's endowment. 

including 

Resources flowing to the KICs directly have to be attracted by the KICs and/or their partner 
organisations, 
to  Community 
programmes  and  the  Structural  Funds.  They  would  constitute  elements  of  the  offer  of  the 
KICs  in  the  competitive  process  for  obtaining  resources  from  the  EIT  or  could  be  attracted 
once a KIC has been awarded such resources. 

the  normal  procedures  applicable 

through 

Table 8.1 sets out the broad breakdown as between the Community budget and other sources.  

However,  the  precise  arrangements  for  the  funding  of  the  EIT  and  the  KICs  will  clearly 
evolve over time. The Commission estimates that the EIT will require front loading from the 
Community Budget in the start up phase, the objective remaining to maximise in the mid term 
contributions from external sources. There is also a trade-off between the resources flowing 
directly to the KICs, including from Community programmes, and the contribution from the 
Community budget to the EIT directly.  

EN 

33 

   EN 

 
 
 
 
The level of ambition entailed in the proposal means that the total spending of the EIT and the 
KICs during the period 2007–2013 could be estimated at € 2,367.1 million. The financing of 
this  amount  can  either  come  directly  from  the  Community  budget,  directly  or  indirectly 
through Community programmes or from other external sources.  

The Commission has been in regular contact with the private sector, and believes that there is 
a  reservoir  of  interest  in  the  EIT  which  can  be  tapped,  including  block  grants  to  the  EIT's 
endowment. In practice, the capacity of the EIT and the KICs to attract outside (particularly 
business)  funding  will  depend  on  a  credible  business  plan.  Two  factors  are  crucial:  (i)  the 
capacity to attract into KICs the most advanced firms and the best universities and research 
teams; and (ii) the extent to which the Community itself makes a public declaration of trust by 
committing  itself  to  making  available  a  substantial  financial  contribution  to  kick  start  the 
process and show openness to consider at a later stage other forms of contributions flowing 
either to the EIT directly or to the KICs. On this basis a virtuous circle can be generated. 

As regards the Community sources, the Commission notes that no specific provision has been 
made  for  the  EIT  in  the  new  legislative  proposals  included  in  the  negotiations  on  the  Inter-
institutional  Agreement  of  17  May  2006  on  budgetary  discipline  and  sound  financial 
management.  The  Commission  proposes  therefore  to  use  part  of  the  unallocated  margins 
beneath the ceilings of sub-heading 1A to finance the EIT directly up to an amount of € 308,7 
million.  In  parallel,  the  Commission  will  continue  to  explore  the  possibilities  of  identifying 
additional complementary resources including recourse, where necessary, to the provisions of 
the Inter-Institutional Agreement.  

Contributions  to  the  KICs  or  their  partner  organisations  directly  from  the  7th  Framework 
Programme,  the  Lifelong  Learning  Programme  and  the  Competitiveness  and  Innovation 
Programme and Structural Funds in accordance with their respective procedures are possible 
and expected to constitute an important part of their funding. On the basis of first experience 
and to the extent that such contributions are deemed necessary and cannot be achieved within 
the  framework  of  the  existing  legal  bases,  a  proposal  for  necessary  adjustment  will  be 
considered in due course.  

The Structural Funds can play a potentially important role for partner organisations involving 
eligible  Member  States,  regions,  cities  or  other  beneficiaries  because  many  types  of 
expenditure  or  investment  are  eligible  under  the  Structural  Fund  rules  and  would  fall  under 
the earmarking for Lisbon priorities.  

As  regards  external  resources,  co-financing  is  expected  from  the  partners  in  the  KICs 
themselves  or  to  be  attracted  by  them.  In  addition,  a  substantial  part  of  the  investment  in 
improving  the  facilities  used  by  KICs  could  be  met  by  straight  contributions  from  Member 
States, regional or local authorities or from loans, including from the EIB. 

4.1.2.  Compatibility with Financial Programming 

X 

X 

Proposal is compatible with existing financial programming. 

Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial 
perspective. 

EN 

34 

   EN 

 
(cid:133) 

Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional 
Agreement13 (i.e. flexibility instrument or revision of the financial perspective). 

4.1.3.  Financial impact on Revenue 

X 

Proposal has no financial implications on revenue 

4.2. 

Human Resources FTE (including officials, temporary and external staff) – see 
detail under point 8.2.1. 

Annual requirements 

Year 

2008 

2009 

2010 

2011 

2012 

2013 

Total  number  of  human 
resources 

5,5 

5,5 

3 

3 

3 

3 

5. 

CHARACTERISTICS AND OBJECTIVES 

5.1. 

Need to be met in the short or long term 

See Impact Assessment and Explanatory Memorandum 

5.2. 

Value-added  of  Community  involvement  and  coherence  of  the  proposal  with 
other financial instruments and possible synergy 

See Impact Assessment and Explanatory Memorandum 

5.3. 

Objectives, expected results and related indicators of the proposal in the context 
of the ABM framework 

See Impact Assessment and Explanatory Memorandum 

During  the  period  of  the  forthcoming  financial  perspectives  (2007–2013),  the  operational 
objectives of the EIT are to establish 6 Knowledge and Innovation Communities (KICs) and a 
Governing  structure  for  the  coordination  of  the  overall  system.  The  KICs  will  perform 
innovation,  research  and  teaching  activities  by  integrating  contributions  from  partner 
organisations. 

For the sake of the estimates, the proposal is based on the assumption that at a cruising speed, 
a  KIC  could  involve  about  1 000  staff:  about  100  Academic  staff,  300  researchers  and  600 
technical and supporting staff. A KIC would host approx. 600 Master students and 400 PhD 
candidates at any given time.  

The Governing Structure would be strictly limited in size and would build up over time to a 
total of 30 scientific and senior staff and 30 support staff.  

13 

See points 19 and 24 of the Interinstitutional agreement. 

EN 

35 

   EN 

 
 
 
 
 
 
                                                 
Indicators 

Since innovation and research activities need a minimum duration of time before producing 
their first outcomes, extensive use will be made in the initial period of establishment of the 
EIT  of  input  indicators  such  as  the  number  of  established  Knowledge  Communities  in 
comparison  with  the  business  plan;  implementation  of  the  budget  with  regards  to  the 
objectives (% of money actually used); percentage of financial contribution originating from 
non Commission sources; number and increase in the number of candidate students at Master 
and PhD levels.  

In  the  long  run,  these  indicators  should  be  supplemented  by  a  set  of  outcome  oriented 
indicators such as the actual number and evolution of the number of patents generated in EU 
and the revenue generated from IPRs (share in the overall budget of the EIT), the number and 
amount  of  contracts  with  business;  initial  salary  for  newly  recruited  graduates  (Master  and 
PhD); average duration to find a first job for newly graduates (Master and PhD). 

5.4.  Method of Implementation (indicative) 

(cid:133)  Centralised Management 

(cid:133) 

directly by the Commission 

(cid:133) 

indirectly by delegation to: 

(cid:133) 

executive Agencies 

X 

bodies set up by the Communities as referred to in Article 185 of 
the Financial Regulation 

(cid:133) 

national public-sector bodies/bodies with public-service mission 

(cid:133) 

Shared or decentralised management 

(cid:133)  with Member states 

(cid:133)  with Third countries 

(cid:133) 

Joint management with international organisations (please specify) 

Relevant comments: 

The EIT will be a body set up by the Communities as referred to in Article 185 of the 
Financial Regulation, but it will not be an “Agency” in the generally accepted sense 
of  that  word.  Its  internal  rules  (eg  on  financial  or  personnel  issues)  will  need  to 
reflect its objectives and the need for sufficient operational flexibility to be attractive 
to its (business and research/academic) partners. 

EN 

36 

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6. 

MONITORING AND EVALUATION 

An  extended  impact  assessment  for  which  background  work  was  done  by  external 
consultants  during  summer  2006,  has  been  carried  out  which  integrates  the 
requirements for an impact assessment and for an ex-ante evaluation. The results of 
this exercise may be found in the Impact Assessment report.  

The EIT activities will be subject of continuous monitoring and periodic independent 
evaluations, to ensure both the highest quality of outcome and the most efficient use 
of resource. The Governing Board will define the modalities to ensure an appropriate 
evaluation.  

Moreover, the Commission will carry out an independent external evaluation of the 
EIT activities within five years from the date of adoption of the EIT Regulation and 
every  four  years  thereafter,  which  will  examine  how  the  EIT  fulfils  its  mission.  It 
will  cover  all  activities  of  the  EIT  and  the  KICs  will  look  at  the  effectiveness, 
relevance of the activities pursued and their relation with Community policies.  

7. 

ANTI-FRAUD MEASURES  

According to the legal instrument, the Commission shall have the right to ensure that 
the  financial  interests  of  the  Community  are  duly  protected.  All  decisions  adopted 
and contracts concluded by the EIT, shall provide explicitly that OLAF and the Court 
of Auditors may carry out on-the-spot inspections of the documents of all contractors 
and  sub-contractors  which  have  received  Community  funds,  including  at  the 
premises of the final beneficiaries. The European Anti-fraud Office (OLAF will be 
entitled to carry out internal investigation in the EIT bodies and the Governing Board 
will adopt the necessary measures to help OLAF carry out internal investigations. 

EN 

37 

   EN 

 
8. 

DETAILS OF RESOURCES 

8.1. 

Objectives of the proposal in terms of their financial cost and resource (scenario of 6 KICs in 2013) 

Costs 

2008 

2009 

2010 

2011 

2012 

2013 

Total 

EIT governing structure  

2.900

5.800

8.700 

8.700

8.700

8.700

43.500

Knowledge and Innovation Communities 

0.000

0.000

220.800 

303.600

441.600

662.400

1,628.400

Grants for Master students and PhD candidates 

0.000

0.000

5.600 

20.600

45.200

73.800

145.200

Improvement 
capacity 

Total costs 

Resources 

of 

innovation/research/education 

0.000

0.000

100.000 

150.000

150.000

150.000

550.000

2.900

5.800

335.100 

482.900

645.500

894.900

2,367.100

Local  authorities  and  Member  States,  Enterprises, 
EIB  loans,  Venture  Capital,  (directly  to  KICs  or 
directly to EIT depending on source) 

Community  budget  (programmes:  FP7,  CIP,  LLL, 
Structural Funds: ERDF, ESF) (directly to KICs)14 

Community 
subheading 1A) (directly to EIT) 

budget 

(unallocated  margin, 

0.000

0.000

47.080 

113.040

133.740

233.100

526,960

238.020 

309.860

436.760

546.800

1,531.440

2.900

5.800

50.000 

60.000

75.000

115.000

308.700

Total resources 

2.900

5.800

335.100 

482.900

645.500

894.900

2,367.100

14 

Awarded in accordance with respective programme procedures. 

EN 

38 

EN 

 
  
 
 
  
 
 
 
 
                                                 
8.2. 

Administrative Expenditure 

8.2.1.  Number and type of human resources 

Types of post 

Staff to be assigned to management of the action using additional resources 
(number of posts/FTEs) 

Year 
2008 

Year 
2009 

Year 
2010 

Year 
2011 

Year 
2012 

Year 
2013 

4 

1,5 

2 

1 

2 

1 

2 

1 

2 

1 

Officials or 
temporary 
staff15 (XX 01 
01) 

A*/AD 

B*, 
C*/AST 

4 

1,5 

Staff  financed16  by  art. 
XX 01 02 

Other  staff17  financed by 
art. XX 01 04/05 

TOTAL 

5,5 

5,5 

3 

3 

3 

3 

The needs for human and administrative resources shall be covered within the allocation 
granted to the managing DG in the framework of the annual allocation procedure. 

8.2.2.  Description of tasks deriving from the action 

8.2.3. 

Sources of human resources (statutory) 

(cid:133) 

X 

X 

X 

(cid:133) 

Posts currently allocated to the management of the programme to be replaced 
or extended 

Posts pre-allocated within the APS/PDB exercise for year 2007 – 2 posts 

Posts to be requested in the next APS/PDB procedure 2008 – 2 posts 

Posts  to  be  redeployed  using  existing  resources  within  the  managing  service 
(internal redeployment) 1.5 posts 

Posts required for year n although not foreseen in the APS/PDB exercise of the 
year in question 

15 
16 
17 

Cost of which is NOT covered by the reference amount. 
Cost of which is NOT covered by the reference amount. 
Cost of which is included within the reference amount. 

EN 

39 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
8.2.4.  Financial cost of human resources and associated costs not included in the reference 

amount 

EUR million (to 3 decimal places) 

Type of human resources 

Year 
2008 

Year 
2009 

Year 
2010 

Year 
2011 

Year 
2012 

Year 
2013 

0.594 

0.594 

0.324 

0.324 

0.324 

0.324 

Officials  and  temporary  staff* 
(XX 01 01) 

Staff  financed  by  Art  XX  01 
02  (auxiliary,  END,  contract 
staff, etc.) 

(specify budget line) 

cost 

Total 
of  Human 
Resources  and  associated 
costs 
in  reference 
amount) 

(NOT 

0.594 

0.594 

0.324 

0.324 

0.324 

0.324 

*Reference costs: 108.000 Euros pa 

8.2.5.  Other administrative expenditure not included in reference amount 

EUR million (to 3 decimal places) 

Year 
2008 

Year 
2009 

Year 
2010 

Year 
2011 

Year 
2012 

Year 
2013 

TOTAL 

XX 01 02 11 01 – Missions 

0.100 

0.050 

0.050 

0.050 

0.050 

0.050 

0.350 

XX 01 02 11 02 – Meetings & Conferences 

0.200 

0.200 

XX 01 02 11 03 – Committees  

0 

0 

0 

0 

0 

0 

XX 01 02 11 04 – Studies & consultations 

0.500 

0.500 

XX 01 02 11 05 - Information systems 

0 

0 

0 

0 

0 

0 

2 

Total 

Other  Management 

0.300 

0.050 

0.050 

0.050 

0.550 

0.050 

1.050 

Expenditure (XX 01 02 11) 

3  Other 

expenditure 

administrative 
including reference to budget line) 

nature 

of 

an 
(specify 

expenditure, 
than  human  resources  and 
in 

Total  Administrative 
other 
associated  costs  (NOT 
reference amount) 

included 

0 

0 

0 

0 

0 

0 

0.300 

0.050 

0.050 

0.050 

0.550 

0.050 

1.050 

EN 

40 

   EN