Source: EURLEX
Language: en
Format: md

**Council of the**
**European Union**

**Interinstitutional File:**

**2019/0151(COD)**

**PROPOSAL**

**Brussels, 12 July 2019**
**(OR. en)**

**11228/19**

**RECH 406**
**COMPET 582**
**EDUC 351**
**CODEC 1299**
**IA 176**

From: Secretary-General of the European Commission,
signed by Mr Jordi AYET PUIGARNAU, Director

date of receipt: 11 July 2019

To: Mr Jeppe TRANHOLM-MIKKELSEN, Secretary-General of the Council of
the European Union

No. Cion doc.: COM(2019) 331 final

Subject: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND
OF THE COUNCIL on the European Institute of Innovation and Technology
(recast)

Delegations will find attached document COM(2019) 331 final.

Encl.: COM(2019) 331 final

11228/19 MI/nj
#### ECOMP.3.C. EN

EUROPEAN

COMMISSION

Brussels, 11.7.2019
COM(2019) 331 final

2019/0151 (COD)

Proposal for a

**REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL**

**on the European Institute of Innovation and Technology (recast)**

(Text with EEA relevance)

{SEC(2019) 275 final} - {SWD(2019) 330 final} - {SWD(2019) 331 final}

### **EN EN**

**EXPLANATORY MEMORANDUM**

**CONTEXT** **OF** **THE** **PROPOSAL**

**•** **Reasons for and objectives of the proposal**

The Regulation of the European Parliament and of the Council establishing the European
Institute of Innovation and Technology (EIT Regulation [1] ), adopted in 2008, sets out its mission
and tasks and the framework for its functioning. The Regulation was amended in 2013 [2] in order,
_inter alia_, to align it with Horizon 2020 [3] .

The overall mission of the European Institute of Innovation and Technology (EIT) is to boost
sustainable European economic growth and competitiveness by reinforcing the innovation
capacity of the Member States and the Union. In particular, the EIT reinforces the Union's
innovation capacity and addresses societal challenges through the integration of the knowledge
triangle of higher education, research and innovation. The EIT operates through its Knowledge
and Innovation Communities (KICs): large-scale European partnerships which address specific
societal challenges by bringing together education, research and business organisations. The EIT
provides grants to the KICs, monitors their activities, supports cross-KIC collaboration and
disseminates results and good practices.

The external evaluation of the EIT carried out in 2017 confirmed that the rationale behind its
establishment is valid and its model of innovation-driven knowledge triangle integration remains
relevant.

For the period 2021-2027, Horizon Europe will be the Union programme funding the EIT. The
EIT is therefore an integral part of the Commission proposal establishing Horizon Europe and
one of the three components of its "Innovative Europe" pillar. The Horizon Europe proposal sets
out the budget for the EIT for the next MFF as well as its rationale, added value, areas of
intervention and broad lines of activity. However, the Horizon Europe proposal itself does not
provide the legal basis for continuing the EIT operations as from 2021. The legal base of the EIT
remains the EIT Regulation.

Furthermore, Article 17 of the EIT Regulation requires that every seven years the Commission
submits to the European Parliament and the Council a proposal for a Strategic Innovation
Agenda (SIA) that lays down the strategic, long-term priorities and financial needs for the EIT
and that needs to be in line with the applicable Union framework programme supporting research
and innovation [4] .

1 Regulation (EC) No 294/2008 of the European Parliament and of the Council of 11 March 2008
establishing the European Institute of Innovation and Technology (OJ L 97, 9.4.2008, p. 1).
2 Regulation (EU) No 1292/2013 of the European Parliament and of the Council of 11 December 2013
amending Regulation (EC) No 294/2008 establishing the European Institute of Innovation and Technology
(OJ L 347, 11.12.2013, p. 174).
3 Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013
establishing Horizon 2020 - the Framework Programme for Research and Innovation 2014-2020 and
repealing Decision No 1982/2006/EC (OJ L 347, 20.12.2013, p. 104).
4 The current SIA covers the period 2014-2020.

### EN 1 EN

The EIT Regulation is not in principle time bound, contrary to the SIA. However, given that a
number of provisions in the EIT Regulation make a direct reference to the current Horizon 2020
programme established for the period 2014-2020, those provisions need to be amended to make
them compatible with the next Union framework programmes supporting research and
innovation.

It is therefore proposed to make the new EIT Regulation time neutral so that amendments to it at
the end of each MFF would in principle not be necessary or only minimal. The continuation of
the operations of the EIT under each new MFF would be subject to appropriate funding
consisting of a contribution from the Union. The contribution from the Union may be provided
through a financial contribution from the Union framework programme supporting research and
innovation as well as other Union programmes.

It would be for the EIT’s SIA to ensure the alignment with the objectives of the relevant Union
framework programme supporting research and innovation, the strategic multiannual planning,
monitoring and other requirements of that programme, and to foster synergies with other relevant
programmes under each new MFF.

As the EIT Regulation was already substantially amended in 2013 and the current proposal
contains further substantive amendments to the EIT Regulation, it is proposed to amend the EIT
Regulation through the recast legislative technique in order to ensure greater legal clarity and
better readability. The time neutrality of the recast Regulation will also enable to focus on the
main principles of the functioning of the EIT/KICs. This, in combination with the stronger role
of the SIA in aligning the EIT with its funding programme under each MFF, will improve the
overall coherence of the legislative framework of the EIT, facilitate the application of its
provisions, and make the legislative process lighter in seven years.

**•** **Consistency with existing policy provisions in the policy area**

For the period 2014-2020, the EIT's objectives, rationale, EU added value, budget, broad lines of
activity and performance indicators are defined in the Horizon 2020 Regulation. The EIT
Regulation sets out, in parallel, the mission and tasks for the EIT along with the framework for
its functioning. The strategic, long-term priority fields and financial needs of the EIT for each
seven-year period are laid down in the SIA [5] .

The Horizon Europe proposal confirmed the importance and contribution of the EIT and its KICs
in delivering the EU's strategic priorities in the area of innovation. It proposes the EIT budget for
2021-2027, its scope, added-value and main areas of activity, while pointing to a revised role of
the EIT in order to reinforce its contribution to Horizon Europe’s objectives.

The EIT is integrated within Horizon Europe as part of its Pillar III (“Innovative Europe”).
However, synergies and complementarities with the other components of the programme will be
created. The EIT through its KICs will also contribute to addressing the global challenges under

5 Decision No 1312/2013/EU of the European Parliament and of the Council of 11 December 2013 on the
Strategic Innovation Agenda of the European Institute of Innovation and Technology (EIT): the
contribution of the EIT to a more innovative Europe (OJ L 347, 20.12.2013, p. 892).

### EN 2 EN

Pillar II (“Global Challenges and European Industrial Competitiveness”) and Pillar I (“Excellent
Science”).

Under the Horizon Europe proposal, the KICs are considered as institutionalised European
Partnerships. The contribution of KICs to other relevant activities under the Horizon Europe
framework will be supported through the multiannual Strategic Planning process, which will
incorporate interdisciplinary and cross-sectoral perspectives and ensure that all activities under
Horizon Europe are coordinated in an effective manner. In addition, the Horizon Europe
proposal emphasises that “proposals for future EIT KICs in compliance with the EIT Regulation
will be indicated in the SIA and will take into account the outcome of the Strategic Planning
process and the priorities of the Global Challenges and European Industrial Competitiveness
pillar”.

To deliver on Horizon Europe objectives close cooperation with, in particular the European
Innovation Council (EIC), will also be important to ensure synergies and greater impact. The EIT
and the EIC are complementary: the EIC will identify, develop and deploy breakthrough
innovations, and support the rapid scale-up of innovative firms carrying out market-creating
innovations at the European and international levels, while the EIT will contribute to the
development of innovation capacity at European and Member State level through the knowledge
triangle integration and support to innovation ecosystems. The distinctive focus of the EIT will
be on human capital, entrepreneurial education, stronger regional outreach and support to
business creation and development in specific thematic areas.

**•** **Consistency with other Union policies**

As described above, the Commission proposal for a recast EIT Regulation emphasises the SIA’s
role to foster synergies not only with the Union framework programme supporting research and
innovation but also with other relevant Union programmes of the respective MFF. Most
importantly, it is for the SIA to create appropriate synergies and complementarities between the
EIT activities and other Union initiatives, policies and instruments. The EIT will have targeted
activities to that regard. Furthermore, the proposal reinforces the role of the Member States’
Representatives Group, which will help ensure synergies and complementarities of EIT and KIC
activities with national programmes and initiatives.

**LEGAL** **BASIS,** **SUBSIDIARITY** **AND** **PROPORTIONALITY**

**•** **Legal basis**

The EU has a shared competence in industry policy based on Article 173 TFEU (Title XVII).
According to Article 173(1), the Union and the Member States shall ensure that conditions
necessary for the competitiveness of the Union's industry exist. For that purpose, in accordance
with a system of open and competitive markets, their action shall be aimed also at fostering
better exploitation of the industrial potential of policies of innovation, research and technological
development. Article 173(3) foresees that the European Parliament and the Council, acting in
accordance with the ordinary legislative procedure referred to in Article 294, may decide on
specific measures in support of action taken in the Member States to achieve the mentioned

### EN 3 EN

objective, excluding any harmonisation of the laws and regulations of the Member States. This
provision is the legal basis of the current EIT Regulation and of the SIA 2014-2020.

The proposed reinforcement of the activities of the EIT, including in the areas of education and
regional dimension, is innovation-driven and aims to fulfil the objective set out in Article 173
TFEU.

**•** **Subsidiarity and proportionality**

The proposal for a recast EIT Regulation respects the principles of subsidiarity and
proportionalit **y** . It does not go beyond what is required for achieving the Union's objectives and
provides a clear EU added-value in terms of economies of scale, scope and speed of investments
in research and innovation areas, compared to national and regional initiatives and solutions.
Moreover, EU action would not interfere with purely domestic scenarios or require
harmonisation of the laws and regulations of the Member States.

The EIT has a unique way of building EU-wide innovation ecosystems of education, research,
business and other stakeholders [6] . Cooperation activities supported by the EIT lead to an
increased quality of action, innovation and internationalisation of KIC partners and
organisations, the creation of cross-border, multidisciplinary networks, more cross-sectoral
cooperation and geographical outreach.

The EIT is also the sole instrument within Horizon Europe with a distinct focus on education as a
key driver of innovation, growth and competitiveness.

**RESULTS** **OF** **EX-POST** **EVALUATIONS,** **STAKEHOLDER** **CONSULTATIONS** **AND**

**IMPACT** **ASSESSMENTS**

_External evaluation_

The proposal builds on the external evaluation of the EIT carried out in 2017 which confirmed
that the rationale behind the establishment of the EIT is valid and that its model of innovationdriven knowledge triangle integration remains relevant. The EIT model targets structural
weaknesses of the innovation capacities in the EU (in key thematic areas), such as the limited
entrepreneurial culture, low level of cooperation between academia and industry and insufficient
development of human potential, and aims to contribute to closing the innovation gap between
the EU and its key competitors.

_Open Public Consultation_

The proposal takes into account the results of the Open Public Consultation (OPC) that was run
as a component of the European Commission’s Impact assessment to support its proposals for
the revision of the EIT Regulation and for a new Strategic Innovation Agenda of the EIT for
2021-2027. The purpose of the OPC was to gather information, opinions and views from a wide
range of stakeholders on 1) the challenges and opportunities in the European research and

6 ICF (2017), Evaluation, p. 36.

### EN 4 EN

innovation area, 2) the policy objectives of the EIT, and 3) the policy options to tackle the
challenges.

_Impact Assessment_

This proposal is supported by an Impact Assessment covering both the proposals for an
amendment to the EIT Regulation (recast) and for an EIT’s SIA for the period 2021 – 2027.

That impact assessment builds on the Impact Assessment carried out for Horizon Europe. The
positive opinion of the Regulatory Scrutiny Board was received on April 5 [th] 2019.

The impact assessment accompanying this proposal identified the following policy options: a
baseline option and two different options addressing the problems and technical issues
highlighted in the impact assessment.

The baseline option 1 represents the continuation of EIT’s activities as they are today with only
the adjustments necessary to align it with the proposal for Horizon Europe. Option 2 builds on
the baseline. In addition, it contains the adoption of a number of technical measures to enhance
the functioning of the EIT, and proposes a new action to foster entrepreneurial education across
Europe. Option 3 differs from option 2 in that it would set up an EIT Hub in each Member State
in order to increase the impact of the EIT activities all across Europe.

Option 2 was identified as the preferred option as it strikes the best balance in achieving the
objectives of the initiative while considering the resources available and offering the highest
economic and societal impacts. It will also entail significant improvements of the EIT in the next
programming period.

**•** **Fundamental rights**

The Commission proposal respects the fundamental rights and observes the principles of the EU
Charter of Fundamental Rights.

**BUDGETARY** **IMPLICATIONS**

The budgetary implications of the proposal as well as the human and administrative resources
required are described in detail in the legislative financial statement [7] .

7 Legislative financial statement for the proposal for a Regulation of the European Parliament and of the
Council on the European Institute of Innovation and Technology (recast) and for a Decision of the
European Parliament and of the Council on the Strategic Innovation Agenda of the European Institute of
Innovation and Technology (EIT) 2021-2027: Boosting the Innovation Talent and Capacity of Europe.

### EN 5 EN

**OTHER** **ELEMENTS**

**•** **Implementation plans and monitoring, evaluation and reporting arrangements**

Monitoring and evaluation are fundamental tools in measuring the impact of the EIT and will be
further strengthened and continuously improved over the next programming period. Given the
nature of the knowledge triangle integration model, it will be important to apply a monitoring
framework that allows flexibility at all relevant levels and ensures coherence with the general
objectives of Horizon Europe and impacts sought.

_Monitoring_

All inputs, outputs, results and impacts identified in the impact assessment accompanying this
proposal will be monitored through indicators. Such indicators already exist and are used by the
EIT. Whenever they do not exist, new indicators will be developed in order to enable the EIT to
monitor the achievement of its objectives.

In parallel and in full compliance with existing monitoring tools, close alignment will be sought
between the EIT monitoring provisions and those that are put in place for Horizon Europe. For
example, the EIT will align its monitoring tools with the Impact Pathways of Horizon Europe
that seek to address the need for scientific, economic and societal impacts indicators more
comprehensively. It will be a responsibility of the EIT to regularly monitor the operational
performance of the KICs and to adapt its monitoring and reporting systems continuously. The
results of such monitoring will feed into the business planning processes of the KICs and into the
EIT decision-making on the allocation of the budget and preparation of the framework
partnership agreements with the KICs as beneficiaries. The monitoring results should feed
continuously into the policy-making process.

_Evaluation_

The evaluation of the performance of the EIT will be carried out by the Commission in line with
the requirements of the amended EIT Regulation and will feed into the overall Horizon Europe
programme evaluation that will be carried out mid-term and ex-post. This will include an
assessment of the synergies of the EIT with the other instruments of the programme.

With regard to the KICs, a specific indicator framework will be used to assess the performance
of the KICs during the next programming period (detailed in the proposal for a new SIA). That
framework draws from current and previous indicators and fills gaps and deficiencies identified
in the existing performance measurement system. It is also aligned with the Horizon Europe
indicator framework.

**•** **Explanation of the key changes in the specific provisions of the proposal**

**Article 5 EIT bodies**     - the proposal reinforces the role of the Executive Committee as a specific
EIT body, underlines the accountability of the Director to the Governing Board and strengthens
the independence of the Internal Auditing Function.

**Article 6 Tasks**     - the proposal contains several precisions of the existing EIT tasks and
emphasizes the importance of the EIT’s task to ensure an appropriate level of coordination and

### EN 6 EN

facilitate communication and thematic cooperation between the KICs. It introduces a new EIT
task to design and coordinate support actions undertaken by the KICs for the development of
entrepreneurial and innovation capacity of Higher Education Institutions and their integration in
innovation ecosystems.

–
**Article 10 Principles for the evaluation and monitoring of KICs** the proposal updates the
reference to the Union framework programme supporting research and innovation as regards the
indicators for the continuous monitoring and periodic external evaluations of the KICs.

**Article 11 Duration, continuation and termination of a KIC**     - the proposal reinforces the
comprehensive mid-term review of each KIC before the expiry of the initial framework
partnership agreement and introduces the notion of a memorandum of cooperation, as a
facultative means to ensure EIT-KICs relation following the end date of the framework
partnership agreement.

–
**Article 17 Financing of the KICs** the proposal moves the first paragraph of the current Article
14 on EIT’s financial resources in the amended first paragraph of Article 20 on EIT budget,
accompanied by few modifications. In addition, it provides the principle for the revised EIT
funding model in the sense that the EIT contribution to the KICs may cover up to 100 % of the
total eligible costs of KIC added-value activities only in the initial stages of the KIC life. Such
contribution shall gradually decrease over time in compliance with the co-funding rates defined
in the SIA. It also emphasizes the importance of financial sustainability of KICs within the EIT’s
competitive allocation mechanism.

–
**Article 20 EIT budget** the proposal defines the funding of the EIT and the source of the EIT’s
financial contribution to the KICs.

**Annex I Statutes of the EIT** – proposed amendments to the EIT Statutes with the aim to clarify
the roles of the EIT Governing Board, Executive Committee and Director, strengthen the
Governing Board’s role in the monitoring, supervision and steering of KICs and clarify the
Commission’s role vis-à-vis the EIT to reflect its obligations in terms of monitoring and sound
financial management. The proposal contains a new requirement for agreement by the
Commission on a limited number of strategic issues decided by the Governing Board (e.g.
monitoring and financial allocation principles). Finally, the proposal removes the reference to
“fixed-term contracts” of EIT staff in order to ensure its professional continuity and development
comparable to the regime applicable to EU agencies.

### EN 7 EN

2019/0151 (COD)

Proposal for a

**REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL**

~~**establishing**~~  **on**  **the European Institute of Innovation and Technology (recast)**

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty  on the Functioning of the European Union  ~~establishing~~
~~the European Community~~, and in particular Article ~~157(3)~~  173(3)  thereof,

Having regard to the proposal from the  European  Commission,

 After transmission of the draft legislative act to the national parliaments, 

Having regard to the opinion of the European Economic and Social Committee [8],

Having regard to the opinion of the Committee of the Regions [9],

Acting in accordance with the ~~procedure laid down in Article 251 of the Treaty~~  ordinary
legislative procedure ,

Whereas:

8 OJ C […], […], p. […].
9 OJ C […], […], p. […].

### EN 8 EN

 294/2008 recital 1 (adapted)

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

 294/2008 recital 2 (adapted)

(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 ~~European~~ Union also require action to be taken at ~~Community~~
 Union  level.

 294/2008 recital 3 (adapted)

~~The Community should provide support to foster innovation, in particular through the~~
~~Seventh~~ ~~Framework~~ ~~Programme~~ ~~for~~ ~~Research,~~ ~~Technological~~ ~~Development~~ ~~and~~
~~Demonstration Activities, the Competitiveness and Innovation Framework Programme, the~~
~~Lifelong Learning Programme and the Structural Funds.~~

 294/2008 recital 4 (adapted)

(3) ~~A new initiative at Community level,~~ ~~tT~~ he European Institute of Innovation and
Technology ~~(hereinafter referred to as the~~ ‘EIT’) should be established to complement
existing ~~Community~~  Union  and national policies and initiatives by fostering

—
the integration of the knowledge triangle higher education, research and innovation
— across the ~~European~~ Union.

 294/2008 recital 5 (adapted)

~~The European Council of 15 and 16 June 2006 invited the Commission to prepare a formal~~
~~proposal for the establishment of the EIT to be presented in autumn 2006.~~

 294/2008 recital 6 (adapted)

~~The EIT should primarily have the objective of contributing to the development of the~~
~~Community’s and the Member States’ innovation capacity, by involving higher education,~~
~~research and innovation activities at the highest standards. In so doing, the EIT should~~
~~facilitate and enhance networking and cooperation and create synergies between innovation~~
~~communities in Europe.~~

### EN 9 EN

should be laid down in a Strategic Innovation Agenda ( ~~hereinafter referred to as~~

innovation policy and the resulting political significance of its socio-economic impact
for the ~~Community~~  Union,  the SIA should be adopted by the European
Parliament and the Council on the basis of a Commission proposal ~~prepared on the~~

for innovation in Europe, particularly in trans- and/or inter-disciplinary areas including
those already identified at European level. In so doing, the EIT should promote
periodic dialogue with civil society.

 294/2008 recital 8

(7) The EIT should give priority to the transfer of its higher education, research and
innovation activities to the business context and their commercial application, as well
as to supporting the creation of start-ups, spin-offs and small and medium-sized
enterprises (SMEs).

(8) The EIT should primarily operate through excellence-driven ~~,~~  and  autonomous
 large-scale European  P ~~pa~~ rtnerships of higher education institutions, research
organisations, companies and other stakeholders in the form of sustainable and longterm self-supporting strategic networks in the innovation process. Tho ~~es~~ e partnerships
should be selected by the Governing Board of the EIT on the basis of a transparent and

~~(hereinafter referred to as~~ KICs ~~).~~

### EN 10 EN

the business and the higher education and/or research worlds as well as from the
innovation sector.

 294/2008 recital 10

(11) In order to contribute to the competitiveness and to reinforce the international
attractiveness of the European economy and its innovation capacity, the EIT and the
KICs should be able to attract partner organisations, researchers and students from all
over the world, including by encouraging their mobility, as well as to cooperate with
third-country organisations.

(12) Relations between the EIT and the KICs should be based on ~~contractual~~  framework
partnership agreements and grant  agreements, which will set out the KICs’ rights
and obligations, ensure an adequate level of coordination and outline the mechanism

(13) There is a need to support higher education as an integral, but often missing,
component of a comprehensive innovation strategy. The  framework partnership
agreements or grant  ~~agreement~~  agreements  between the EIT and KICs
should provide that the degrees and diplomas awarded through the KICs should be
awarded by participating higher education institutions, which should be encouraged to
label them also as EIT degrees and diplomas.  In addition, the EIT should strengthen

### EN 11 EN

2005/36/EC of the European Parliament and of the Council ~~of 7 September 2005 on~~
~~the recognition of professional qualifications~~ [13] .

 294/2008 recital 13

 294/2008 recital 14 (adapted)

(14) Appropriate provisions should be made to guarantee the liability and transparency of
the EIT. Appropriate rules ~~governing~~  regulating  its  governance and 
functioning should be laid down in the Statutes of the EIT.

(15) The EIT should possess legal personality and, in order to guarantee its functional
autonomy and independence  of national authorities and external pressures,  it
should administer its own budget whose revenue should include a contribution from
the  Union  ~~Community.~~

the fact that their activities are undertaken in the context of the EIT and that they
receive a financial contribution from the general budget of the ~~European~~ Union.

13 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, p. 22). ~~Directive as last amended by~~
~~Commission Regulation (EC) No 1430/2007 (OJ L 320, 6.12.2007, p. 3).~~

### EN 12 EN

 294/2008 recital 17

 294/2008 recital 18 (adapted)

(17) The ~~Community~~  Union  budgetary procedure should be applicable as far as the
~~Community subsidy and any other grants~~  Union financial contribution 
chargeable to the general budget of the ~~European~~ Union ~~are~~  is  concerned. The
auditing of accounts should be undertaken by the Court of Auditors in accordance with
the  Financial Regulation  ~~Council Regulation (EC, Euratom) No 1605/2002 of~~
~~25 June 2002 on the Financial Regulation applicable to the general budget of the~~
~~European Communities~~ ~~[14]~~ ~~.~~

 294/2008 recital 19

 294/2008 recital 20 (adapted)

(18) The EIT is a body set up by the ~~Communities~~  Union  within the meaning of
Article 70 ~~185(1)~~ of ~~Regulation (EC, Euratom) No 1605/2002~~  the Financial
Regulation  and should adopt its financial rules accordingly. Consequently
 Commission Delegated Regulation (EU) 2019/715 of 18 December 2018 on the
framework financial regulation for the bodies set up under the TFEU and Euratom
Treaty and referred to in Article 70 of the Financial Regulation [16]  ~~Commission~~
~~Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework~~
~~Financial Regulation for the bodies referred to in Article 185 of Council Regulation~~
~~(EC, Euratom) No 1605/2002~~ ~~[17]~~ should apply to the EIT.

14 ~~OJ L 248, 16.9.2002, p. 1. Regulation as last amended by Regulation (EC) No 1525/2007 (OJ L 343,~~
~~27.12.2007, p. 9).~~

16 Commission Delegated Regulation (EU) 2019/715 of 18 December 2018 on the framework financial
regulation for the bodies set up under the TFEU and Euratom Treaty and referred to in Article 70 of
Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (OJ L 122,
10.5.2019, p. 1).
17 ~~OJ L 357, 31.12.2002, p. 72.~~

### EN 13 EN

developments in the fields of science, technology, higher education, innovation and

(20) It is appropriate that the Commission initiate ~~an~~ independent, external ~~evaluation~~

 294/2008 recital 24 (adapted)

~~It is appropriate to pursue a gradual, phased implementation of the EIT in view of its long-~~
~~term development. An initial phase with a limited number of KICs is needed in order to~~
~~evaluate properly the functioning of the EIT and the KICs and, where necessary, to introduce~~
~~improvements. Within a period of 18 months from its creation, the Governing Board should~~
~~select two or three KICs in areas that help the European Union to face current and future~~
~~challenges, which could include such fields as climate change, renewable energy and the next~~
~~generation of information and communication technologies. The selection and designation of~~
~~further KICs should be enabled after the adoption of the first SIA, which, in order to address~~
~~the long-term perspective, should also include detailed modalities on the operation of the EIT.~~

 294/2008 recital 25 (adapted)

(21) Since the ~~objective~~  objectives  of  this Regulation  ~~the action to be taken,~~
~~namely to establish the EIT,~~ cannot be sufficiently achieved by the Member States ~~and~~
 but  can  rather  ~~therefore,~~ for reasons of scale and transnationality, be
better achieved at ~~Community~~  Union  level, the ~~Community~~  Union  may
adopt measures, in accordance with the principle of subsidiarity as set out in Article 5
of the Treaty  on European Union  . In accordance with the principle of
proportionality, as set out in that Article, this Regulation does not go beyond what is
necessary in order to achieve  those objectives  ~~that objective~~,

### EN 14 EN

 294/2008 (adapted)

HAVE ADOPTED THIS REGULATION:

_Article 1_

**Subject matter**

A European Institute of Innovation and Technology ( ~~hereinafter referred to as the~~ ‘EIT’) is
~~hereby~~ established.

_Article 2_

**Definitions**

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

 1292/2013 Art. 1.1(a)

(1) ‘innovation’ means the process, including its outcome, by which new ideas
respond to societal or economic needs and demand and generate new products,
services or business and organisational models that are successfully introduced into
an existing market or that are able to create new markets and that provide value to
society;

(2) ‘Knowledge and Innovation Community’ (KIC) means an autonomous
 large-scale European  partnership of higher education institutions, research
organisations, companies and other stakeholders in the innovation process in the
form of a strategic network, regardless of its precise legal form, based on joint midto long-term innovation planning to meet the EIT challenges and contribute to

 1292/2013 Art. 1.1(c)

### EN 15 EN

(3 ~~)5.~~ ‘partner organisation’ means any ~~organisation~~  legal entity  which is a
member of a KIC and may include, in particular, higher education institutions,
 vocational education and training providers,  research organisations, public or
private companies, financial institutions, regional and local authorities, foundations
and non-profit organisations;

(4 ~~)6~~ ‘research organisation’ means any public or private legal entity which
undertakes research or technological development as one of its main objectives;

(5 ~~)7~~ ‘higher education institution’ means a university or any type of higher
education institution which, in accordance with national legislation or practice, offers
degrees and diplomas  in particular  at masters or doctoral level, irrespective of
its denomination in the national context;

 294/2008

(7 ~~)9~~ ‘Strategic Innovation Agenda’ (‘SIA’) means a policy document outlining the
priority fields and the long-term strategy of the EIT for future initiatives,  its
capacity to generate the best innovation added-value,  including an overview of
planned higher education, research and innovation activities over a period of seven
years , covering the respective MFF  ;

 1292/2013 Art. 1.1(g)

(8 ~~)9a~~ ‘Regional Innovation Scheme’ (‘RIS’) means an outreach scheme targeted at
partnerships between higher education institutions, research organisations,
companies and other stakeholders, in order to foster innovation across the Union;

### EN 16 EN

(9 ~~)10.~~ ‘Stakeholder Forum’ means a platform open to representatives of  Union
institutions,  national, regional and local authorities, organised interests and
individual entities from business, higher education, research, associations, civil
society and cluster organisations, as well as other interested parties from across the
knowledge triangle;

(11 ~~).~~ ’KIC added-value activities’ means activities carried out by  KIC  partner

education, research and innovation, including the establishment, administrative and
coordination activities of the KICs, and contributing to the overall objectives of the
EIT; ~~.~~

_Article 3_

**Mission and** ~~**oOb**~~ **jectives**

The EIT’s mission is to contribute to sustainable ~~European~~  Union  economic growth
and competitiveness by reinforcing the innovation capacity of the Member States and the
Union in order to address major challenges faced by  the  ~~European~~ society. It shall do
this by promoting synergies and cooperation among, and integrating, higher education,
research and innovation of the highest standards, including by fostering entrepreneurship.

### EN 17 EN

 294/2008

_Article 4_ ~~_17_~~

**SIA**

impact and its capacity to generate the best innovation added-value. The SIA shall take into
account the results of the monitoring and evaluation of the EIT as referred to in Article 19 ~~16.~~

 294/2008 (adapted)

3. The SIA shall include an estimate of financial needs and sources in view of the future
operation, long-term development and funding of the EIT. It shall also contain an indicative
financial plan covering the period of the ~~financial framework~~  respective MFF  .

4. The EIT shall submit its contribution to the Commission’s proposal for the SIA.

### EN 18 EN

 1292/2013 Art. 1.14(c)
(adapted)

5 ~~4.~~ Acting on ~~a~~  the  proposal from the Commission, the European Parliament and
the Council shall adopt the SIA in accordance with Article 173(3) of the Treaty on the
Functioning of the European Union.

 294/2008

_Article 5_ ~~_4_~~

**EIT bodies**

1. The bodies of the EIT shall be:

(a) a Governing Board composed of high-level members experienced in higher
education, research, innovation and business. It shall be responsible for steering the
activities of the EIT, for the selection, designation , monitoring  and evaluation
of the KICs, and for all other strategic decisions; ~~.~~

(c) a Director, appointed by the Governing Board, 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  responsible for its operations and day
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.

### EN 19 EN

2 ~~3.~~ The detailed provisions regarding the EIT bodies are set out in the Statutes of the EIT,
annexed to this Regulation.

_Article 6_ ~~_5_~~

**Tasks**

In order to achieve its objective, the EIT shall  in particular  :

 1292/2013 Art. 1.4(a)

(a) identify, in accordance with the SIA, its main priorities and activities;

 294/2008

(b) raise awareness among potential partner organisations and encourage their
participation in its activities;

(c) select and designate KICs in the priority fields in accordance with Article 9 ~~7~~
and define their rights and obligations by  framework partnership agreements and
grant  ~~contractual~~ ~~agreement~~  agreements , provide them with appropriate
support, apply appropriate quality control measures ~~,~~  and  continuously
monitor and periodically evaluate their activities;

(d) ensure an appropriate level of coordination and facilitate communication and
thematic cooperation between the KICs  and launch calls for cross-KIC activities
and shared services  ;

(e) ~~encourage~~  strengthen  the recognition  outside the EIT Community 
~~in the Member States~~ of degrees and diplomas which are awarded by
 participating  higher education institutions ~~that are partner organisations~~ and
which may be labelled EIT degrees and diplomas  and extend them to lifelong
learning programmes  ;

 1292/2013 Art. 1.4(c)

(f) promote the dissemination of best practices for the integration of the
knowledge triangle, including among KICs, in order to develop a common

### EN 20 EN

innovation and knowledge transfer culture, and encourage participation in outreach
activities, including in the RIS;

excellent innovation partners  ;

 1292/2013 Art. 1.4(d)

(h) promote multidisciplinary approaches to innovation, including the integration
of technological, social and non-technological solutions, organisational approaches
and new business models;

(i) ensure complementarity and synergy between EIT activities and other Union
programmes, where appropriate;

(j ~~k)~~ ~~establish~~  organise regular meetings of  a Stakeholder Forum to inform
about the activities of the EIT, its experiences, best practices and contribution to
Union innovation, research and education policies and objectives and to allow
stakeholders to express their views; ~~.~~ ~~A meeting of the Stakeholder Forum shall be~~
~~convened at least once a year.~~

least twice a year, independently from  ~~shall meet in a special configuration, within~~
the ~~meeting~~  meetings  of the Stakeholder Forum, to ensure appropriate
communication and flow of information with the EIT, and be informed of the
achievements of, give advice to, and share experiences with, the EIT and the KICs.
The ~~special configuration of~~ Member States’ R ~~re~~ presentatives  Group  ~~within the~~
~~Stakeholder Forum~~ shall also ensure appropriate synergies and complementarities
between EIT and KIC activities with national programmes and initiatives, including
the potential national co-financing of KIC activities; ~~.~~

### EN 21 EN

_Article 7_ ~~_6_~~

**KICs**

1. KICs shall  in particular  undertake ~~in particular:~~

integrating the higher education and research dimensions to attain a critical mass and
stimulating the dissemination and exploitation of results;

(b) ~~cutting-edge and~~ innovation-driven ~~research~~  experimentation, prototyping
and demonstration  in areas of key economic and societal interest and drawing on
the results of ~~European~~  Union  and national research, with the potential to
strengthen ~~Europe’s~~  Union’s  competitiveness at international level and find
solutions for the major challenges faced by European society;

(c) education and training activities  in particular  at masters and doctoral
level, as well as professional training courses, in disciplines with the potential to
meet future European socio-economic needs and which expand the Union’s talent
base, promote the development of innovation-related skills, the improvement of
managerial and entrepreneurial skills and the mobility of researchers and students,
and foster knowledge-sharing, mentoring and networking among the recipients of
EIT-labelled degrees and training;

 1292/2013 Art. 1.5(a)

(d) outreach activities and the dissemination of best practices in the innovation
sector with a focus on the development of cooperation between higher education,
research and business, including the service and financial sectors;

 1292/2013 Art. 1.5(a)

(e) to seek synergies and complementarities between KIC activities and existing
European, national and regional programmes, where appropriate.

### EN 22 EN

their internal organisation and composition, as well as their precise agenda and working
methods. In particular, KICs shall:

(a) establish  internal  governance arrangements which reflect the knowledge
triangle of higher education, research and innovation;

(b) ~~aim to be open~~  ensure their openness  to new members whenever they
add value to the partnership;

(c) function in an open and transparent way, in accordance with their internal
rules;

(d) establish  and implement  business plans ~~with objectives and key~~
~~performance indicators~~ ;

(e) ~~develop~~  establish and implement  strategies for financial sustainability.

3. The relationship between the EIT and each KIC shall be based on ~~a contractual~~
 framework partnership agreements and grant  ~~agreement~~  agreements  .

_Article 8_

**Rules for participation and dissemination**

 294/2008

_Article 9_ ~~_7_~~

**Selection of KICs**

### EN 23 EN

1. A partnership shall be selected and designated by the EIT to become a KIC following

 1292/2013 Art. 1.6(b)

2 ~~1a.~~ The EIT shall launch the selection and designation of KICs according to the priority
fields and time schedule defined in the SIA.

 1292/2013 Art. 1.6(c)

### EN 24 EN

3. The minimum condition to form a KIC is the participation of at least three

4. In addition to the condition set out in paragraph 3, at least two thirds of the partner
organisations forming a KIC shall be established in the Member States. At least one higher
education institution , one research organisation  and one private company shall be part
of each KIC.

5. The EIT shall adopt and publish criteria and procedures for financing, monitoring and
evaluating the activities of the KICs prior to the launching of the selection procedure for new
KICs. The ~~special configuration of~~ Member States’ R ~~re~~ presentatives  Group referred to in

_Article 10_ ~~_7a_~~

**Principles for the evaluation and monitoring of KICs**

continuous monitoring and periodic external evaluations of the output, results and impact of
each KIC. The results of such monitoring and evaluations shall be reported to the European
Parliament and to the Council and shall be made public.

### EN 25 EN

_Article 11_ ~~_7b_~~

**Duration, continuation and termination of a KIC**

~~2~~ 1.  By way of derogation from Article 130(4)(c) of the Financial Regulation,  t ~~T~~ he
EIT may establish a framework partnership agreement with a KIC for an initial period of

seven years.

framework partnership agreement with a KIC beyond the  initial  period ~~initially set,~~

~~4~~ 3. In the event that evaluations of a KIC show inadequate results  or lack of European
added value , the Governing Board shall take appropriate measures, including the
reduction, modification or withdrawal of ~~its~~  the EIT’s  financial ~~support~~
 contribution  or the termination of the  framework partnership  agreement.

_Article 12_ ~~_8_~~

**Degrees and diplomas**

1. Degrees and diplomas relating to the higher education activities referred to in point (c)
of Article 7 ~~6~~ (1 ~~)(c)~~ shall be awarded by participating higher education institutions in
accordance with national rules and accreditation procedures. The  framework partnership
agreements and grant  ~~contractual agreement~~  agreements  between the EIT and the
KICs shall provide that these degrees and diplomas may also be labelled EIT degrees and
diplomas.

### EN 26 EN

2. The EIT shall encourage participating higher education institutions to:

(a) award joint or multiple degrees and diplomas, reflecting the integrated nature
of the KICs. However, these may also be awarded by a single higher education
institution;

 1292/2013 Art. 1.8

(b ~~aa)~~ disseminate best practices on horizontal issues;

 294/2008 (adapted)

( ~~cb)~~ take into account:

(i) ~~Community~~  Union  action undertaken in accordance with
Articles ~~149~~  165  and ~~150~~  166  of the Treaty;

(ii) action undertaken in the context of the European Higher Education
Area.

_Article 13_ ~~_9_~~

 **Operational**  **i** ~~**I**~~ **ndependence of the EIT and consistency with**  **Union** 

~~**Community**~~ **, Member State or intergovernmental action**

1. The EIT shall carry out its activities independently of national authorities and external

pressures.

2. The activity of the EIT shall be consistent with other action and instruments to be
implemented at ~~Community~~  Union  level, in particular in the fields of higher education,
research and innovation.

3. The EIT shall also take appropriate account of policies and initiatives at regional,
national and intergovernmental levels in order to make use of best practices, well established
concepts and existing resources.

_Article 14_ ~~_11_~~

**Legal status**

1. The EIT shall be a ~~Community~~  Union  body and shall have legal personality. In
each of the Member States, it shall enjoy the widest possible legal capacity accorded to legal
persons under national legislation. In particular, it may acquire or dispose of movable and
immovable property and be a party to legal proceedings.

2. ~~The~~ Protocol  No 7  on the Privileges and Immunities of the European
~~Communities~~  Union  shall apply to the EIT.

### EN 27 EN

_Article 15_ ~~_12_~~

**Liability**

1. The EIT shall be solely responsible for meeting its obligations.

2. The contractual liability of the EIT shall be governed by the relevant contractual
provisions and the law applicable to the contract in question. The Court of Justice shall have
jurisdiction pursuant to any arbitration clause contained in a contract concluded by the EIT.

3. 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 shall have jurisdiction in any dispute relating to compensation for such
damage.

4. 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.

5. The Court of Justice shall have jurisdiction in actions brought against the EIT under
the conditions provided for in Articles ~~230~~  263  and ~~232~~  265  of the Treaty.

_Article 16_ ~~_13_~~

**Transparency and access to documents**

1. The EIT  and the KICs  shall ensure that ~~its~~  their  activities are conducted
with a high level of transparency. In particular, the EIT  and the KICs  shall set up an
accessible, free website providing information about ~~the~~  their  activities ~~of the EIT and~~
~~individual KICs.~~

 1292/2013 Art. 1.10

2. The EIT shall make public its rules of procedure, its specific financial rules referred to
in Article 2 ~~21(~~ 1) and the detailed criteria for the selection of the KICs referred to in Article 9 ~~7~~
before issuing calls for proposals for the selection of the KICs.

in Article 1 ~~815.~~

4. Without prejudice to paragraphs 5 and 6, the EIT shall not divulge to third parties
confidential information it has received for which confidential treatment has been requested
and is justified.

### EN 28 EN

5. The members of the EIT bodies shall be subject to the confidentiality requirement
referred to in Article ~~287~~  339  of the Treaty.

The information gathered by the EIT in accordance with this Regulation shall be subject to
Regulation (EU) 2018/1725 of the European Parliament and of the Council [20] ~~Regulation (EC)~~
~~No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the~~
~~protection of individuals with regard to the processing of personal data by the Community~~
~~institutions and bodies and on the free movement of such data~~ ~~[2][1]~~ ~~.~~

6. Regulation (EC) No 1049/2001 of the European Parliament and of the Council ~~of~~
~~30 May 2001 regarding public access to European Parliament, Council and Commission~~
~~documents~~ [2][2] shall apply to the documents held by the EIT. ~~The Governing Board shall adopt~~
~~practical arrangements for applying that Regulation no later than six months after the EIT has~~
~~been set up.~~

7. ~~Official documents and publications of the EIT shall be translated in accordance with~~
~~the~~  Council  Regulation No 1 of 15 April 1958 ~~determining the languages to be used~~
~~by the European Economic Community~~ [23]  shall apply to the EIT  . The ~~required~~
translation services  required for the functioning of the EIT  shall be provided by the
Translation Centre for bodies of the European Union, set up by Council Regulation (EC)
No 2965/1994 [24] .

_Article 17_ ~~_14_~~

~~_Financial resources_~~  **Financing of the KICs** 

1 ~~2.~~ The KICs shall be financed, in particular, from the following sources:

(a) contributions from partner organisations, forming a substantial source of
funding;

20 Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the
protection of natural persons with regard to the processing of personal data by the Union institutions,
bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No
45/2001 and Decision No 1247/2002/EC.(OJ L 295, 21.11.2018, p. 39).
21 ~~OJ L 8, 12.1.2001, p. 1.~~
22 Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001
regarding public access to European Parliament, Council and Commission documents (OJ L 145,
31.5.2001, p. 43).
23 Council Regulation No 1 of 15 April 1958 determining the languages to be used by the European
Economic Community (OJ 17, 6.10.1958, p. 385/58). ~~Regulation as last amended by Regulation (EC)~~
~~No 1791/2006 (OJ L 363, 20.12.2006, p. 1).~~
24 Council Regulation (EC) No 2965/1994 of 28 November 1994 setting up a Translation Centre for
bodies of the European Union (OJ L 314, 7.12.1994, p. 1). ~~Regulation as last amended by Regulation~~
~~(EC) No 1645/2003 (OJ L 245, 29.9.2003, p. 13).~~

### EN 29 EN

(b) voluntary contributions from Member States,  associated countries or 
third countries or public authorities within them;

(c) contributions from international bodies or institutions;

(d) revenue generated by the KICs’ own assets and activities and royalties from
intellectual property rights;

(e) capital endowments ~~, including those managed by the EIT Foundation;~~

(f) bequests, donations and contributions from individuals, institutions,
foundations or any other ~~national~~ bodies  established under national law  ;

(g) the  financial  contribution from the EIT;

(h) financial instruments, including those funded from the general budget of the
Union.

~~Contributions may include contributions in kind.~~

 294/2008

2 ~~3.~~ The modalities for accessing funding from the EIT shall be defined in the financial
rules of the EIT referred to in Article 22 ~~1(~~ 1).

4. The EIT  financial  contribution to the KICs may cover up to 100 % of the total

5. The KICs or their partner organisations may apply for ~~Community~~  Union 
~~assistance~~ ~~~~ financial contribution , in particular in the framework of ~~Community~~
 Union  programmes and funds, in accordance with their respective rules ~~and on an~~
~~equal footing with other applications~~ . In that case, such  contribution  ~~assistance~~ shall
not  cover the same costs  ~~be attributed for activities~~ already funded ~~through the general~~
~~budget of the European~~  under another  Union  programme  .

### EN 30 EN

 1292/2013 Art. 1.11(c)

~~6.~~ ~~The EIT contribution shall not, on average, exceed 25 % of a KIC’s overall funding.~~

7. The EIT shall establish a competitive ~~review~~  allocation  mechanism for
~~allocating~~  granting  an appropriate share of its financial contribution to the KICs. It
shall include assessing the KICs’ business plans and performance as measured by continuous
monitoring , and in particular their progress in achieving financial sustainability  .

_Article 18_ ~~_15_~~

**Programming and reporting**

containing  the following: 

(a) a statement of the major priorities and planned initiatives of the EIT and the KICs; ~~,~~

(b ~~)including~~ an estimate of financing needs and sources;

(c) ~~It shall also contain~~ appropriate indicators for monitoring the KICs and EIT activities

(d) other components as laid down in its financial rules.

~~The Commission shall deliver an opinion on EIT specific objectives as defined in Horizon~~
~~2020 and its complementarities with Union policies and instruments within three months of~~

### EN 31 EN

2. The EIT shall adopt a ~~n~~  consolidated  annual  activity  report ~~by 30 June~~
~~each year. The report~~ , which  shall ~~outline~~  include comprehensive information
on  the activities conducted by the EIT and the KICs during the preceding calendar year

education policies and objectives. It shall also  assess the results with respect to the
objectives, indicators and timetable set, the risks associated with the activities carried out, the

_Article 19_ ~~_16_~~

**Monitoring and evaluation of the EIT**

1. The EIT shall ensure that its activities, including those managed through KICs, shall
be subject to continuous and systematic monitoring and periodic independent evaluation  in
accordance with its financial rules , to ensure both the highest quality of outcome,
scientific excellence and the most efficient use of resources. The outcomes of the evaluations
shall be made public.

value of the EIT, the impact, effectiveness, sustainability, efficiency and relevance of the
activities pursued and their ~~relationship~~  coherence  and/or complementarity with

### EN 32 EN

3 ~~2a.~~ The Commission may carry out further evaluations of themes or topics of strategic
relevance, with the assistance of independent experts  selected on the basis of a transparent
process , to examine the progress made by the EIT towards the objectives set, identify the
factors contributing to the implementation of the activities and identify best practices. ~~In so~~
~~doing~~  By carrying out those further evaluations , the Commission shall fully consider
the administrative impact on the EIT and the KICs.

 294/2008 (adapted)

4 ~~3.~~ The Commission shall ~~forward~~  communicate  the results of the
 evaluations  ~~evaluation~~, ~~together with~~  accompanied by  its  observations 
~~own opinion and, where appropriate, any proposals to amend this Regulation~~, to the European
Parliament, the Council, the European Economic and Social Committee and the Committee of
the Regions. The Governing Board shall take due account of the findings of evaluations in the
programmes and operations of the EIT.

 294/2008 (adapted)

~~_Article 18_~~

~~**Initial phase**~~

~~1.~~ ~~Within 12 months after its creation, the Governing Board shall submit the draft of the~~
~~first rolling triennial work programme, referred to in Article 15(a), to the European~~
~~Parliament, the Council and the Commission. The European Parliament, the Council and the~~
~~Commission may each address an opinion to the Governing Board on any subject covered in~~
~~draft within three months of the day on which they received it. Where such opinions are~~
~~addressed to it, the Governing Board shall reply within a period of three months, indicating~~
~~any adjustments in the priorities and planned activities.~~

~~2.~~ ~~Within a period of 18 months from the date of creation of the Governing Board, the~~
~~EIT shall select and designate two or three KICs in accordance with the criteria and~~
~~procedures set out in Article 7.~~

~~3.~~ ~~The Commission shall submit the proposal for the first SIA, on the basis of the draft~~
~~provided by the EIT, to the European Parliament and the Council before the end of 2011.~~

~~In addition to the content of a SIA in accordance with Article 17, the first SIA shall include:~~

~~(a)~~ ~~detailed specifications and terms of reference concerning the operation of the~~
~~EIT;~~

~~(b)~~ ~~the modalities for cooperation between the Governing Board and the KICs;~~

~~(c)~~ ~~modalities of the funding of the KICs.~~

### EN 33 EN

~~4.~~ ~~After the adoption of the first SIA in accordance with Article 17(4), the Governing~~
~~Board may select and designate additional KICs pursuant to the provisions of Articles 6~~
~~and 7.~~

_Article 20_ ~~_19_~~

~~**Budgetary commitments**~~  **EIT budget** 

_Article 21_ ~~_20_~~

**Preparation and adoption of the annual budget**

### EN 34 EN

administrative, infrastructure and operational expenses. Administrative expenditure shall be
kept to a minimum.

~~2.~~ ~~The financial year shall correspond to the calendar year.~~

2 ~~3.~~ 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.

~~4.~~ ~~Revenue and expenditure shall be in balance.~~

 1292/2013 Art. 1.16(b)

 294/2008 (adapted)

~~7.~~ ~~The budgetary authority shall authorise the appropriations for the subsidy to the EIT.~~

4 ~~8.~~ The Governing Board shall adopt 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.

5 ~~9.~~ The Governing Board shall, as soon as possible, notify the budgetary authority of its
intention to implement any project which may have significant financial implications for the
funding of the EIT budget, in particular any projects relating to property such as the rental or
purchase of buildings. It shall inform the Commission thereof.

6 ~~10.~~ Any substantial modification of the budget shall follow the same procedure.

_Article 22_ ~~_21_~~

**Implementation and control of the budget**

### EN 35 EN

 Appropriate consideration  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.

 294/2008

3 ~~2.~~ The Director shall implement the budget of the EIT.

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

 1292/2013 Art. 1.17(b)

_Article 23_ ~~_22_~~

**Protection of the financial interests of the** ~~**Community**~~  **Union** 

1. With a view to combating fraud, corruption and other illegal acts, ~~Regulation (EC)~~
~~No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning~~

~~-~~
~~investigations conducted by the European Anti~~ ~~Fraud Office (OLAF)~~ ~~[2][6]~~ Regulation (EU,
Euratom) No 883/2013 of the European Parliament and of the Council [27] shall apply to the EIT
in its entirety.

2. The EIT shall accede to the Interinstitutional 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) [28] . The Governing Board shall formalise this accession and adopt the necessary
measures to help OLAF carry out internal investigations.

26 ~~OJ L 136, 31.5.1999, p. 1.~~
27 Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of

                                                             11 September 2013 concerning investigations conducted by the European Anti Fraud Office (OLAF)
and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and
Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1).
28 OJ L 136, 31.5.1999, p. 15.

### EN 36 EN

3. All decisions adopted and ~~contracts~~  framework partnership agreements or grant
agreements  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 subcontractors which have received ~~Community~~  Union  funds, including at the premises of
the final beneficiaries.

_Article 24_ ~~_22a_~~

**Winding up of the EIT**

In the event of the EIT being wound up, its liquidation shall take place under the supervision
of the Commission in accordance with the applicable laws. The ~~contractual~~  framework
partnership agreements or grant  agreements with the KICs ~~and the act establishing the EIT~~
~~Foundation~~ shall lay down the appropriate provisions in such situation.

_Article 25_ ~~_23_~~

**Statutes**

The Statutes of the EIT  are  ~~, as~~ set out in ~~the~~ Annex ~~I, are hereby adopted~~ .

_Article 26_

**Repeal**

Regulation (EC) No 294/2008 is repealed.

 294/2008 (adapted)

_Article 27_ ~~_24_~~

**Entry into force**

This Regulation shall enter into force on the ~~20th~~  twentieth  day following  that
of  its publication in the _Official Journal of the European Union_ .

### EN 37 EN

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

Done at Brussels,

_For the European Parliament_ _For the Council_
_The President_ _The President_

### EN 38 EN

**LEGISLATIVE FINANCIAL STATEMENT**

### EN 39 EN

**1.** **FRAMEWORK** **OF** **THE** **PROPOSAL/INITIATIVE**

1.1. Title of the proposal/initiative

1.2. Policy area(s) concerned (Programme cluster)

1.3. The proposal/initiative relates to:

1.4. Grounds for the proposal/initiative

_1.4.1._ _Requirement(s) to be met in the short or long term including a detailed timeline for_
_roll-out of the implementation of the initiative_

_1.4.2._ _Added value of Union involvement (it may result from different factors, e.g._
_coordination gains, legal certainty, greater effectiveness or complementarities). For_
_the purposes of this point 'added value of Union involvement' is the value resulting_
_from Union intervention which is additional to the value that would have been_
_otherwise created by Member States alone_

_1.4.3._ _Lessons learned from similar experiences in the past_

_1.4.4._ _Compatibility and possible synergy with other appropriate instruments_

1.5. Duration and financial impact

1.6. Management mode(s) planned

1.7. Management mode(s) planned

**2.** **MANAGEMENT** **MEASURES**

2.1. Monitoring and reporting rules

2.2. Management and control system(s)

_2.2.1. Justification of the management mode(s), the funding implementation_
_mechanism(s), the payment modalities and the control strategy proposed_

_2.2.2. Information concerning the risks identified and the internal control system(s)_
_set up to mitigate them_

_2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of_
_"control costs ÷ value of the related funds managed"), and assessment of the_
_expected levels of risk of error (at payment & at closure)_

2.3. Measures to prevent fraud and irregularities

**3.** **ESTIMATED** **FINANCIAL** **IMPACT** **OF** **THE** **PROPOSAL/INITIATIVE**

3.1. Heading of the multiannual financial framework and new expenditure budget
line(s) proposed

### EN 40 EN

3.2. Estimated impact on expenditure

_3.2.1. Summary of estimated impact on expenditure_

_3.2.2. Summary of estimated impact on appropriations of an administrative nature_

_3.2.3. Third-party contributions_

3.3. Estimated impact on revenue

### EN 41 EN

**LEGISLATIVE FINANCIAL STATEMENT**

**1.** **FRAMEWORK** **OF** **THE** **PROPOSAL/INITIATIVE**

**1.1.** **Title of the proposal/initiative**

Amendment of the Regulation of the European Parliament and the Council
establishing the European Institute of Innovation and Technology (EIT), and

Decision of the European Parliament and of the Council on establishing a Strategic
Innovation Agenda of the European Institute of Innovation and Technology (EIT)
2021-2027

**1.2.** **Policy area(s) concerned (Programme cluster** )

–
Horizon Europe the Framework Programme for Research and Innovation (20212027)

**1.3.** **The proposal/initiative relates to:**

 **a new action**

 **a new action following a pilot project/preparatory action** [29]

**X** **the extension of an existing action**

 **a merger or redirection of one or more actions towards another/a new action**

**1.4.** **Grounds for the proposal/initiative**

_1.4.1._ _Requirement(s) to be met in the short or long term including a detailed ti meline for_
_roll-out of the implementation of the initiative_

The European Institute of Innovation and Technology (EIT) is an integral part of the
Commission’s proposal for Horizon Europe (2021 – 2027) under the Open
Innovation Pillar but has a separate legal base (the EIT Regulation).

The Horizon Europe proposal [30] confirmed the importance and contribution of the
EIT and its KICs in delivering the EU's strategic priorities in the area of innovation.
It proposes the EIT budget for 2021-2027 [31], its scope, added-value and main areas of
activity, while pointing to a revised role of the EIT in order to reinforce its
contribution to Horizon Europe’s objectives.

The initiative aims to make the EIT Regulation compatible with Horizon Europe and
improve the functioning of the EIT taking into account the lessons learnt from the
past years. It also aims to propose a new Strategic Innovation Agenda (SIA), which

29 As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
30 COM (2018) 435 final.
31 Article 9(2)(c)(2).

### EN 42 EN

### EN 43 EN

_1.4.2._ _Added value of Union involvement (it may result from different factors, e.g._
_coordination gains, legal certainty, greater effectiveness or complementarities). For_
_the purposes of this point 'added value of Union involvement' is the value resulting_
_from Union intervention which is additional to the value that would have been_
_otherwise created by Member States alone_

Reasons for action at European level (ex-ante)

The nature and scale of the innovation challenges require mobilising players and
resources at European scale, by fostering cross-border collaboration. There is a need
to break down silos between disciplines and along value chains and nurture the
establishment of a favourable environment for an effective exchange of knowledge
and expertise, and for the development and attraction of entrepreneurial talents.

The Horizon Europe impact assessment identified specific structural weaknesses in
the EU’s innovation capacity that need to be addressed at EU level and that would be
the focus of the EIT’s contributions. In particular, European Higher Education
Institutions need to stimulate entrepreneurship, overcome disciplinary borders and
institutionalise strong EU wide non-disciplinary academia-industry collaborations.
Access to entrepreneurial talent, together with access to professional services, capital
and markets on the EU level, and bringing key innovation actors together around a
common goal are key ingredients for nurturing an innovation ecosystem. There is a
need to coordinate efforts across the EU in order to create a critical mass of
interconnected EU-wide entrepreneurial clusters and ecosystems. This level of
magnitude and scale of intervention goes beyond what Member States can do alone
and require an intervention at EU level.

Expected generated Union added value (ex-post)

The EIT is expected to meet its objectives for the period 2021 – 2027 as outlined in
the Horizon Europe proposal. The specific benefit of EU investment in the EIT will
result in:

         - the creation of new environments conducive to collaboration and innovation;

### EN 44 EN

         - stronger innovation capabilities of academia and the research sector;

         - new generation of entrepreneurial people;

         - the creation and the development of innovative ventures;

         - wider regional outreach of EIT’s innovation activities.

_1.4.3._ _Lessons learned from similar experiences in the past_

The EIT was set up in 2008 to address major societal challenges by improving the
innovation capacity and performance of the EU. In 2017, the mid-term evaluation of
the EIT concluded that the EIT remains strongly relevant and has a clear EU addedvalue. There is no other instrument that builds EU-wide innovation networks of

education, research, business and other stakeholders.

The EIT has created Europe’s an innovation ecosystem with more than 1200 partners
from business, research and education, organised in 8 Knowledge and Innovation
Communities (KICs) spanning over 40 co-location centres. More than 50% of
partners from the business sector (industry, SMEs and start-ups) demonstrate that the
instrument is close to the market. The EIT Community brings results: over 600 new
products and services launched in the market, more than 1250 start-ups and
innovative ventures supported, more than 890 MEUR of external investment; and
more than 6.000 created jobs. The first cohorts of some 1.700 graduates from EIT
labelled master courses are now entering the labour market.

The EIT’s design as an independent body allows it to be flexible, autonomous,
business driven and agile in decision-making. The time to grant is 4 months as
compared to an average of 6 months in Horizon 2020. The rules for competitive
funding, financial sustainability and simplification foster innovation in KICs. The
EIT administrative costs are very low with less than 2% of the total budget compared
to the average of 4.6% reported for Horizon 2020.

For 2021-2027, main improvements to the EIT will aim in particular at:

         - Further simplification of procedures for the efficient management of KICs (e.g.
with the introduction of a new co-funding mechanism, multi-annuality of grants,
etc.).

         - Supporting better integration of HEIs in innovation value chains and ecosystems

         - Addressing more global challenges by launching 2 new KICs

         - Reinforcing openness and transparency of the KICs and their alignment with the
proposed approach for European Partnerships under Horizon Europe

            - Increasing EIT’s impact at regional and local levels and in particular in countries
with lower innovation performance

         - Increasing the visibility of the EIT’s action in MS and beyond

        - Increasing the synergies and complementarities with other Horizon Europe and
other EU and MS instruments

### EN 45 EN

_1.4.4._ _Compatibility and possible synergy with other appropriate instruments_

### EN 46 EN

**1.5.** **Duration and financial impact**

**X** **limited duration**

**X** in effect from [01/01]2021 to [31/12]2027

**X** Financial impact from 2021 to 2027 for commitment appropriations and from

2021 to 2029 for payment appropriations.

 **unlimited duration**

Implementation with a start-up period from YYYY to YYYY,

followed by full-scale operation.

**1.6.** **Management mode(s) planned** [32]

 **Direct management** by the Commission

 by its departments, including by its staff in the Union delegations;

 by the executive agencies

 **Shared management** with the Member States

**X** **Indirect management** by entrusting budget implementation tasks to:

 third countries or the bodies they have designated;

 international organisations and their agencies (to be specified);

 the EIB and the European Investment Fund;

**X** bodies referred to in Articles 70 and 71 of the Financial Regulation;

 public law bodies;

 bodies governed by private law with a public service mission to the extent that

they provide adequate financial guarantees;

 bodies governed by the private law of a Member State that are entrusted with the

implementation of a public-private partnership and that provide adequate financial
guarantees;

 persons entrusted with the implementation of specific actions in the CFSP

pursuant to Title V of the TEU, and identified in the relevant basic act.

_If more than one management mode is indicated, please provide details in the ‘Comments’ section._

32 Details of management modes and references to the Financial Regulation may be found on the
BudgWeb site:
[https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx](https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx)

### EN 47 EN

**2.** **MANAGEMENT** **MEASURES**

**2.1.** **Monitoring and reporting rules**

_Specify frequency and conditions._

The EIT will apply an evaluation and monitoring framework that allows flexibility
at all relevant levels and ensures coherence with the general objectives of Horizon
Europe and the impacts sought. In particular, feedback loops between the
Commission, EIT and KICs will be ensured in order to address the objectives in a
consistent, coherent and efficient manner.

MONITORING

The EIT monitoring will be set up in line with the following layers:

1. The monitoring of the implementation of its operational budget, mainly through
KICs, will be a primary task of the EIT. The Commission will take part in the codesign of all relevant impact and monitoring tools developed or applied by the EIT in
order to ensure compatibility and consistency with the overall Horizon Europe
monitoring system, including the key impact pathways, the criteria framework for
European Partnerships and the Strategic Planning Process.

It will be a responsibility of the EIT to regularly monitor the operational performance
and results of the KICs and to adapt continuously its monitoring systems. The results
of such monitoring will feed into KICs’ business planning processes and the EIT
decision-making on the allocation of the budget, the preparation of the framework
partnership agreements and specific grant agreements with the KICs as beneficiaries.

2. The monitoring of the EIT's own activities (outputs, results and impacts of the
activities) will combine quantitative and qualitative indicators in a medium-term
perspective. Following the granting of the full financial autonomy to the EIT in
January 2018, a Memorandum of Understanding (MoU) has been signed between the
EIT and the Commission (DG EAC). This MoU defines the modalities of
cooperation between them and the detailed arrangements concerning the provision of
the financial contribution from the general budget of the European Union to the EIT.

This monitoring of EIT’s activities will track the degree of achievement of the SIA
and Single Programming Document through the analysis of its indicators. It will also
measure for instance the EIT's performance in providing support to the KICs,
manage projects linked to the EIT coordinated activities, the intensity and coverage
of awareness raising and outreach event (the number of workshop and best practice
events), dissemination and international activities and the impact of the EIT in the
wider European policy innovation, research and education agendas.

3.

The periodic evaluations of the EIT activities, including those managed through
KICs, will be carried out by the Commission in 2023 and 2026 in line with the EIT
Regulation and Horizon Europe Regulation. Those evaluations will assess the
effectiveness, efficiency, relevance, coherence and EU added value of the EIT

### EN 48 EN

activities. They will be based on independent external evaluations and will feed into
the mid-term and ex-post evaluations of the overall Horizon Europe programme with
a view to ensure synergies between the EIT and other parts of the programme.
Moreover, the Commission may at any time carry out further evaluations on themes
or topics of strategic relevance. The synergies of EIT planned activities with other
EU programmes should be assured via the assessment by the Commission of the EIT
Single Programming Document.

REPORTING

The EIT is a Union body receiving a subsidy from the European Union budget. From
a financial management and control perspective, the EIT will be treated like other
bodies set up under the Treaty. This means that the Inter-institutional Agreement [33]
between the European Parliament, the Council and the Commission on budgetary
discipline, on cooperation in budgetary matters and on sound financial management
applies to the EIT.

. As regards the reporting on the implementation of the monitoring system:

         - The _Single Programming Document (SPD)_ of the EIT, adopted yearly, contains a
multiannual work programme (n+3) and an annual work programme (n+1). These
work programmes shall set out the overall strategic programming for the years n+1 to
n+3, including the objectives, expected results and performance indicators to monitor
the achievement of the objectives and the results. In addition, the SPD will contain
among others an estimate of its revenue and expenditure; a resources programming
document; information on its building policy; strategy for achieving efficiency gains
and synergies; strategy for the organisational management and internal control
systems including their anti-fraud strategy as last updated and an indication of
measures to prevent recurrence of cases of conflict of interest, irregularities and
fraud.

        - The _Annual Activity Report (AAR)_ for the previous year (n-1) will include the
results of the monitoring process for n-1 and describe how and to what extent
objectives have been achieved. The AAR should take account of the Cost and
Performance Reports of the KIC for the previous year (n-1) of their operations.

The KICs reporting conditions have been established under the Framework
Partnerships Agreement and the Grant Agreements (performance and cost reporting).
In order to increase the efficiency and cost-effectiveness and based on the experience
gained by the EIT during the implementation of the grant agreements by the KICs, a
number of simplification measures will be implemented in the grant management
process, which will have as major goals to reduce the administrative workload for
KICs and to increase the quality of data gathered.

33 COM (2018) 323 final, of 2.5.2018

### EN 49 EN

**2.2.** **Management and control system(s)**

_2.2.1. Justification of the management mode(s), the funding implementation mechanism(s),_
_the payment modalities and the control strategy proposed_

As a body fully integrated into the Horizon Europe programme, the funding
implementation mechanisms, payment modalities, and control strategy proposed are
aligned to those of Horizon Europe to ensure the beneficiaries and stakeholders
experience a consistent approach as regards eligibility rules and sound financial
management.

The EIT’s performance in 2014-2020, with an error rate found to be consistently
below 2%, is one of the best in the research family, and due to its bespoke design,
combines low error rates with a control approach which by careful use of outsourcing
keeps control costs low while retaining effectiveness and efficiency.

_2.2.2. Information concerning the risks identified and the internal control system(s) set up to_
_mitigate them_

Taking into account the clear need to manage the European budget in an efficient and
effective manner, and to ensure sound financial management, the EIT has in place
an internal control system to give reasonable assurance that the error over the course
of the multiannual expenditure period, is within, and indeed lower than, the limits
proposed under Horizon Europe.The EIT internal control framework will also build
on: the Commission Internal Control Standards, EIT’s own procedures, ex-ante
checks of 100% of KICs' declared expenditures financed by the EIT, audit
certificates, ex-ante certification of cost declaration methodologies, ex-post audits on
a sample of claims, projects results and external evaluation.

The EIT has in place the organisational structure and the internal management and
control systems and procedures suited to the performance of the EIT duties. This has
been done in compliance with the standards adopted by the Governing Board on the
basis of equivalent standards laid down by the Commission, and having due regard to
the risks associated with the management environment and the nature of the action
financed.

The Risk Management Exercise is done on a yearly basis in order to mitigate any
risks linked with the implementation of all EIT activities. In this context, the EIT
should take into account, when establishing the internal control framework, the risks
of the activities implemented, the specific characteristics of the population and
recurrence of beneficiaries, the frequency of the grants awarded and the size of
transactions as well as avoiding any overlap of funding.

A number of simplification measures put in place from 2014 have resulted in
reducing the error rates. The detected error rate resulting from the ex-post
verification of the EIT grants is well below the materiality level of 2 %.

The control system set up by the EIT provides reasonable assurance of achieving
adequate management of the risks relating to the effectiveness and efficiency of the
operations, assuring the legality and regularity of the underlying transactions and
achieving a balance between trust and control. As part of the control system

### EN 50 EN

implemented by the EIT, the audit strategy is based on the financial audit of a
representative sample of expenditure across the whole EIT budget, notably through
the annual grants awarded to KICs in a yearly basis. This representative sample may
be complemented by a selection based on an assessment of the risks related to
expenditure during the ex-ante checks of 100% of claims and the experience
obtained will be used in the assessment of the control framework of risk assessment
for grants implementation. Audits of expenditure will continue to be carried out in a
coherent manner in accordance with the principles of economy, efficiency and
effectiveness.

As regards the internal control Framework of the EIT, the EIT has developed an
overall strategy, including a supervisory structure, on the implementation of internal
control processes that support the entire expenditure life cycle. Its senior
management ensures that this overall strategy is formally accepted by the Governing
Board and implemented. Major elements of this strategy are a planning and reporting
exercise following the Commission standards and linked with the Risk-Management
approach. Moreover, the EIT has also developed a number of Standard Operating
Procedures (SOP). The SOP are detailed, written instructions to achieve uniformity
of the performance of a specific process; the instructions usually cover more than one
task or area within the EIT, Unit, Section or teams.

Audit certificates on the financial statements are provided by the KICs and the
different partners, whereby independent auditors contracted by the EIT certify the
legality and conformity of the amounts declared in the financial reports.

_2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of "control_
_costs ÷ value of the related funds managed"), and assessment of the expected levels of risk of_
_error (at payment & at closure)_

Based on the most recent estimation the cost of controls of EIT are below 3% of the
funds managed, coupled with a risk of error of 1%. Corrective actions are routinely
applied via certificates on financial statements and ex post audits. The combination
of a small size and an effective and efficient outsourcing approach enables the costs
of controls to remain low and the level of assurance sufficient, as demonstrated by
the recent declarations of assurance by the European Court of Auditors.

**2.3.** **Measures to prevent fraud and irregularities**

_Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy._

The EIT shall take appropriate measures ensuring that the financial interest of the
Union are protected.

The EIT is determined to fight against fraud at all stages of the grant management
process and other activities that are implemented. All decisions adopted and
contracts concluded by the EIT provide explicitly that the European Antifraud Office
(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 Union funds,
including at the premises of the final beneficiaries.

### EN 51 EN

The EIT has since 2015 had an Anti-Fraud Strategy in line with that of the
Commission and is continuously improving its measures to prevent and detect fraud.

### EN 52 EN

**3.** **ESTIMATED** **FINANCIAL** **IMPACT** **OF** **THE** **PROPOSAL/INITIATIVE**

**3.1.** **Heading of the multiannual financial framework and new expenditure budget**
**line(s) proposed**

|Col1|Budget line|Type of<br>expenditure|Contribution|Col5|Col6|Col7|
|---|---|---|---|---|---|---|
||01.010101 Expenditure related to officials<br>and<br>temporary<br>staff<br>implementing<br>research and innovation programmes– <br>Horizon Europe<br>01.010102<br>External<br>personnel<br>implementing research and innovation<br>programmes– Horizon Europe<br>01.010103<br>Other<br>management<br>expenditure for research and innovation<br>programmes– Horizon Europe<br> <br>Heading I. Single market, Innovation and<br>Digital|Non-diff.34|from<br>EFTA<br>countries35 <br>|from<br>candidate<br>countries36 <br>|from<br>third<br>countrie<br>s|within the<br>meaning of<br>Article [21(2)(b)]<br>of the Financial<br>Regulation|
||01.02.03.XX<br>European<br>Institute<br>of<br>Innovation and Technology (EIT)|Diff.|YES|YES|YES|NO|

34 Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
35 EFTA: European Free Trade Association.
36 Candidate countries and, where applicable, potential candidates from the Western Balkans.

### EN 53 EN

**3.2.** **Estimated impact on expenditure**

_3.2.1. Summary of estimated impact on expenditure_

EUR million (to three decimal places)

**Heading of multiannual financial**

**I** Heading I. Single market, Innovation and Digital
**framework**

|Col1|Col2|Col3|2021|2022|2023|2024|2025|2026|2027|Post<br>2027|TOTAL|
|---|---|---|---|---|---|---|---|---|---|---|---|
|Title I EIT Budget (Staff expenditure)37 <br>|Commitments =<br>Payments|(1)|5.413|5.588|5.768|5.954|6.147|6.346|6.551||**41.767**|
|Title II EIT Budget (Infrastructure and<br>operating expenditure)|Commitments =<br>Payments|(2)|1.309|1.335|1.362|1.389|1.417|1.445|1.474||**9.732**|
|Title III EIT Budget (Operational expenditure).<br>Operational appropriations (split according to<br>the budget lines listed under 3.1)|Commitments|(3)|386.423|394.190|402.088|410.155|418.460|426.790|435.394||**2 873.500**|
|Title III EIT Budget (Operational expenditure).<br>Operational appropriations (split according to<br>the budget lines listed under 3.1)|Payments|(4)<br>|270.496|391.860|399.719|407.735|415.969|424.291|432.813|130.618|**2.873.500**|
|01.02.03.XX European Institute of Innovation and<br>Technology (EIT)– Operational Appropriations|Commitments|(5)=(1)<br>+ (2)<br>+(3)|393.145|401.113|409.218|417.499|426.024|434.581|443.419||** 2 925.000**|

37 The cost of the EIT staff and Title II has been calculated applying the correction coefficient for HU (71.9), as indicated in the page 16, table 5 of
[https://ec.europa.eu/eurostat/documents/6939681/7070380/Annualreport2018.pdf/97053a94-29eb-4e93-8883-e826426e3d55](https://ec.europa.eu/eurostat/documents/6939681/7070380/Annualreport2018.pdf/97053a94-29eb-4e93-8883-e826426e3d55)

### EN 54 EN

|Col1|Payments|(6)=(1)<br>+(2)+(4<br>)|277.218|398.783|406.849|415.079|423.533|432.082|440.838|130.618|2.925.000|
|---|---|---|---|---|---|---|---|---|---|---|---|
|01.010101 Expenditure related to officials and<br>temporary<br>staff<br>implementing<br>research<br>and<br>innovation programmes– Horizon Europe|Commitments =<br>Payments|(7)|0.527|0.545|0.565|0.584|0.605|0.626|0.648||**4.100**|
|01.010102 External personnel implementing research<br>and innovation programmes HE|Commitments =<br>Payments|(8)|0.108|0.110|0.113|0.115|0.117|0.119|0.122||0.804|
|01.010103 Other management expenditure for<br>research and innovation programmes HE|Commitments =<br>Payments|(9)|9.445|9.629|9.816|10.006|10.202|10.398|10.600||70.096|
|Appropriations of an administrative nature financed<br>from the envelope of the programme38|Commitments =<br>Payments|(10)=(7<br>)+ (8)<br>+(9)|10.081|10.285|10.493|10.705|10.924|11.143|11.370||75.000|
|**TOTAL appropriations under HEADING 1 of the**<br>**multiannual financial framework for the EIT**|Commitments|(11)<br>=(5)+(1<br>0)|403.226|411.398|419.711|428.204|436.948|445.724|454.789||3 000.000|
|**TOTAL appropriations under HEADING 1 of the**<br>**multiannual financial framework for the EIT**|Payments|(12)=(6<br>)+(10)|287.299|409.068|417.342|425.784|434.456|443.225|452.208|130.618|3.000.000|

**Heading of multiannual financial**

7 ‘Administrative expenditure’
**framework**

[This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative](https://myintracomm.ec.europa.eu/budgweb/EN/bud/mff/Pages/mff-post-2020.aspx)
[Financial Statement, which is uploaded to DECIDE for interservice consultation purposes.](https://myintracomm.ec.europa.eu/budgweb/EN/bud/mff/Pages/mff-post-2020.aspx)

38 Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research,
direct research. This represents the maximum from the amount allocated to the EIT from the Programme, to be devoted to the Commission's administrative
expenditure.

### EN 55 EN

EUR million (to three decimal places)

|European Commission|Col2|2021|2022|2023|2024|2025|2026|2027|Post<br>2027|TOTAL|
|---|---|---|---|---|---|---|---|---|---|---|
||||||||||||
||||||||||||
||||||||||||
|**TOTAL appropriations under HEADING**<br>**7 of the multiannual financial framework**<br>**for the EIT **|(Total commitments =<br>Total payments)||||||||||

EUR million (to three decimal places)

|Col1|Col2|2021|2022|2023|2024|2025|2026|2027|Post<br>2027|TOTAL|
|---|---|---|---|---|---|---|---|---|---|---|
|**TOTAL appropriations** <br>**across HEADINGS** <br>of the multiannual financial framework for<br>the EIT|Commitments|**403.226**|**411.398**|**419.711**|**428.204**|**436.948**|**445.724**|**454.789**||**3 000.000 **|
|**TOTAL appropriations** <br>**across HEADINGS** <br>of the multiannual financial framework for<br>the EIT|Payments|**287.299**|**409.068**|**417.342**|**425.784**|**434.456**|**443.225**|**452.208**|**130.618**|**3 000.000**|

### EN 56 EN

_3.2.2._ _Summary of estimated impact on appropriations of an administrative nature_

 The proposal/initiative does not require the use of appropriations of an

administrative nature

X The proposal/initiative requires the use of appropriations of an administrative

nature, as explained below:

EUR million (to three decimal places)

|HEADING 7<br>of the multiannual<br>financial framework|Col2|Col3|Col4|Col5|Col6|Col7|Col8|Col9|
|---|---|---|---|---|---|---|---|---|
|Human resources|||||||||
|Other administrative<br>expenditure|||||||||
|**Subtotal HEADING 7** <br>**of the multiannual**<br>**financial framework**|||||||||

|Outside HEADING 7<br>of the multiannual<br>financial framework|Col2|Col3|Col4|Col5|Col6|Col7|Col8|Col9|
|---|---|---|---|---|---|---|---|---|
|Human resources. Line<br>01.010101 Officials and<br>Temporary staff<br>implementing research<br>and innovation<br>programmes HE|0.527|0.545|0.565|0.584|0.605|0.626|0.648|**4.100 **|
|Human resources. Line<br>01.010102 External<br>personnel implementing<br>research and innovation<br>programmes HE|0.108|0.110|0.113|0.115|0.117|0.119|0.122|**0.804 **|
|Line 01.010103 Other<br>management expenditure<br>for research and<br>innovation programmes<br>HE|9.445|9.629|9.816|10.006|10.202|10.398|10.600|**70.096 **|
|**Subtotal** <br>**outside HEADING 7** <br>**of the multiannual**<br>**financial framework**|10.081|10.285|10.493|10.705|10.924|11.143|11.370|**75.000 **|

The appropriations required for human resources and other expenditure of an administrative nature will be met by
appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the

### EN 57 EN

DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.

### EN 58 EN

3.2.2.1 Estimated requirements of human resources [39]

 The proposal/initiative does not require the use of human resources.

X The proposal/initiative requires the use of human resources, as explained below:

_Estimate to be expressed in full time equivalent units_

|Years|Col2|2021|2022|2023|2024|2025|2026|2027|
|---|---|---|---|---|---|---|---|---|
|** Establishment plan posts (officials and temporary staff)**|** Establishment plan posts (officials and temporary staff)**|** Establishment plan posts (officials and temporary staff)**|** Establishment plan posts (officials and temporary staff)**|** Establishment plan posts (officials and temporary staff)**|** Establishment plan posts (officials and temporary staff)**|** Establishment plan posts (officials and temporary staff)**|** Establishment plan posts (officials and temporary staff)**|** Establishment plan posts (officials and temporary staff)**|
|Headquarters and Commission’s<br>Representation Offices|Headquarters and Commission’s<br>Representation Offices|4|4|4|4|4|4|4|
|Delegations|Delegations||||||||
|Research|Research||||||||
|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|** External staff (in Full Time Equivalent unit: FTE) - AC, AL, END, INT and JED** 40 <br>Heading 7|
|Financed from<br>HEADING 7 of<br>the multiannual<br>financial<br>framework|- at Headquarters||||||||
|Financed from<br>HEADING 7 of<br>the multiannual<br>financial<br>framework|- in Delegations||||||||
|Financed from the<br>envelope of the<br>programme 41|- at Headquarters|2|2|2|2|2|2|2|
|Financed from the<br>envelope of the<br>programme 41|- in Delegations||||||||
|Research|Research||||||||
|Other (specify)|Other (specify)||||||||
|**TOTAL**|**TOTAL**|**6 **|**6 **|**6 **|**6 **|**6 **|**6 **|**6 **|

The human resources required will be met by staff from the DG who are already assigned to management of the
action and/or have been redeployed within the DG, together if necessary with any additional allocation which
may be granted to the managing DG under the annual allocation procedure and in the light of budgetary
constraints.

Description of tasks to be carried out:

39 These figures are aligned with the overall Legislative financial statement of Horizon Europe which
includes only the authorised staff in place in 2020 in Directorates General, but do not prejudge on the
possible specific needs of staff working on EIT for the period 2021-2027.
40 AC= Contract Staff; AL = Local Staff; END = Seconded National Expert; INT = agency staff;
JPD= Junior Professionals in Delegations.
41 Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines).

### EN 59 EN

|Col1|context of Higher Education Area;<br>- Tasks related to the preparation of the Commission processes of the strategic planning<br>and programming cycle (AAR …) and budget management;<br>- Follow up of Audits from Internal Audit Capability (IAC) and Internal Audit Service<br>(IAS) and of the European Court of Auditors (ECA).|
|---|---|
|External staff|- Contribution to the preparation of the Commission opinion on the SPD;<br>- Contribution to the general coordination with other services of the Commission and<br>coordination and alignment with other EU initiatives, in particular Horizon Europe;<br>- Contribution of the Commission position at the EIT Stakeholders Platform;<br>- Contribution of the Commission position at the ‘Member States’ Representatives<br>Group’ <br>- Contribution to the organisation of the annual meetings between the EIT-KICs and<br>Commission services;<br>- Follow up of the calls for new KICs;<br>- Contribution to the assurance of compliance of the EIT labelled degrees with actions<br>undertaken in the context of Higher Education Area;<br>- Contribution to the preparation of the Commission processes of the strategic planning<br>and programming cycle (AAR…) budget; <br>- Contribution to the follow up of Audits (IAC, IAS and ECA).<br>|

3.2.2.2 Estimated requirements of human resources in the European Institute of Innovation

& Technology (EIT)

_Estimate to be expressed in full time equivalent units_

|EIT (in Budapest)|2021|2022|2023|2024|2025|2026|2027|
|---|---|---|---|---|---|---|---|
|Commission Officials||||||||
|Of which AD||||||||
|Of which AST||||||||
|Of which AST-SC||||||||
|Temporary Agents||||||||
|Of which AD|40|40|40|40|40|40|40|
|Of which AST|5|5|5|5|5|5|5|
|Of which AST-SC||||||||
|Contract Agents|23|23|23|23|23|23|23|
|SNEs|2|2|2|2|2|2|2|
|**Total**|**70**|**70**|**70**|**70**|**70**|**70**|**70**|

Description of tasks to be carried out:

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|Col1|- Coordination and alignment with other EU initiatives, in particular HorizonEurope;<br>- EIT Stakeholders Platform;<br>- ‘Member States’ Representatives Group’<br>- Preparation of the EIT Governing Board and Executive Committee meetings;<br>- Organisation of meetings and Hearings between the EIT and KICs;<br>- Consolidation of existing KICs;<br>- Monitoring and evaluation of the KICs and the EIT coordinated activities;<br>- EIT’s impact via knowledge sharing, dissemination, outreach and international<br>exposure;<br>- Designing and managing the EIT coordinated activities;<br>- Fostering cooperation and synergies between KICs;<br>- Design and coordination of education activities undertaken by the KICs;<br>- Implementation of the communication of the EIT;<br>- Launching and follow up Calls for KICs;<br>- Management of the Audits (Internal audit service, Internal audit capability and<br>European Court of Auditors).|
|---|---|
|External staff|- Contribution to the preparation of the new waves of designation and selection of new<br>KICs;<br>- Contribution to the Entrepreneurial and Education agenda of the EIT;<br>- Contribution to the EIT Stakeholders Platform;<br>- Contribution to the ‘Member States’ Representatives Group’ <br>- Contribution to the preparation of the EIT GBs and ExCo;<br>- Contribution to the assurance of compliance of the EIT labelled degrees with actions<br>undertaken in the context of Higher Education Area;<br>- Contribution to the implementation of the communication of the EIT;- Contribution to<br>the management of the EIT coordinated activities;<br>- Contribution to monitoring and follow up the KICs and the EIT coordinated activities.<br>|

### EN 61 EN

_3.2.3. Third-party contributions_

The proposal/initiative:

 does not provide for co-financing by third parties

X provides for the co-financing by third parties estimated below:

Appropriations in EUR million (to three decimal places)

|Years|2021|2022|2023|2024|2025|2026|2027|TOTAL|
|---|---|---|---|---|---|---|---|---|
|Specify the co-financing<br>body|||||||||
|TOTAL appropriations<br>co-financed42|p.m.|p.m.|p.m.|p.m.|p.m.|p.m.|p.m.|p.m.|

**3.3.** **Estimated impact on revenue**

 The proposal/initiative has no financial impact on revenue.

X The proposal/initiative has the following financial impact:

 on own resources

X on other revenue

please indicate, if the revenue is assigned to expenditure lines 

EUR million (to three decimal places)

|Budget revenue line:|Impact of the proposal/initiative|Col3|Col4|Col5|Col6|Col7|Col8|
|---|---|---|---|---|---|---|---|
|Budget revenue line:|**2021**|**2022**|**2023**|**2024**|**2025**|**2026**|**2027**|
|Item 6013|p.m.|p.m.|p.m.|p.m.|p.m.|p.m.|p.m.|

For assigned revenue, specify the budget expenditure line(s) affected.

01.02XX Appropriations accruing from contributions from third parties

Other remarks (e.g. method/formula used for calculating the impact on revenue or any other
information).

Third countries may contribute to the Programme through association agreements. The
conditions determining the level of financial contribution will be laid down in association
agreements with each country and shall ensure an automatic correction of any significant
imbalance compared to the amount that entities established in the associated country receive

42 Bilateral Association Agreements are not fixed yet. Contributions from associated countries will come
on top of the amounts presented in this Legislative Financial Statement.

### EN 62 EN

through participation in the programme, taking into account the costs in managing the

programme.

### EN 63 EN