At a time when think tanks and civil society organisations committed to democracy and European integration are under increasing pressure, the European Commission’s latest interpretation of Horizon Europe funding guidelines risks producing exactly the opposite of what simplification was supposed to achieve. In the name of streamlining administration, it is making participation in European research financially riskier for these actors.
At the centre of the issue is a seemingly technical change in how indirect costs are reimbursed under Horizon projects. Previously, organisations could claim evidenced indirect costs linked to the real overheads generated by research activities. Now, under the simplified system, indirect costs are reimbursed through a fixed percentage agreed at the outset of the project.
Such simplification in itself is not necessarily problematic. Many organisations welcomed the idea of reducing administrative burdens and avoiding endless accounting exercises. But the Commission’s latest interpretation creates a serious and potentially damaging contradiction.
According to this interpretation, organisations receiving an operating grant under programmes such as CERV can no longer receive indirect costs in Horizon lump-sum budgets because this is deemed to constitute potential double funding. This applies even where organisations can clearly demonstrate, as they have in the past, that the costs covered under Horizon are different from those financed through the operating grant. In other words, even where there is no actual double funding, the simplified mechanism treats it as if there were.
The problem becomes even more acute because this interpretation is now being applied retrospectively to projects already underway. Organisations that entered into grant agreements in good faith, based on the agreed financial assumptions and implementation practices in place at the start of the project, now face a revised interpretation being applied to ongoing projects after costs have already been incurred. The ineligibility is being applied to all indirect costs, regardless of the proportion of CERV in the total budget of the affected organisations, i.e. no proportionality is being applied. Some of the organisations affected are now only realising this, leaving a gap in their budgets that will have consequences for their operational capacity.
This raises fundamental concerns about legal certainty and trust.
European research funding depends on long-term planning. Organisations commit staff, infrastructure and financial resources based on contracts agreed with the Commission. If operational interpretations of funding rules can shift over the lifetime of projects in ways that materially alter their financial viability, participation in Horizon becomes riskier.
The Commission risks sending a damaging message: that it is not a reliable funding partner.
The consequences are particularly severe for smaller organisations, non-profits and think tanks. Large universities or major research institutions may have the financial reserves to absorb unexpected shortfalls. Smaller civil society organisations do not. Ironically, a reform presented as simplification disproportionately disadvantages precisely those actors with the least administrative and financial capacity.
The long-term implications could be profound. If organisations are effectively forced to choose between applying for an operating grant and participating in these Horizon research projects, many will conclude that combining the two is financially impossible. The likely result is a narrowing of participation in European research ecosystems, with fewer civil society actors and independent think tanks able to contribute.
That would weaken European research and policymaking alike. Horizon has always aimed not only to fund scientific excellence but also to foster broad societal participation and interdisciplinary collaboration. Civil society organisations and think tanks play a critical role in connecting research with policy, democratic debate and societal impact. Pushing them out of the system would impoverish the quality and diversity of European research networks.
The Commission should urgently reconsider this interpretation and, at the very least, ensure that retrospective application is halted. Preventing genuine double funding is legitimate and necessary. But where organisations can transparently evidence distinct cost bases, treating them as if they were double claiming serves neither accountability nor simplification.
Whatever the underlying motivation, the result risks reducing the ability of civil society to participate in European research and weakening the connection between research, policymaking and democratic debate.
Fabian Zuleeg is Chief Executive and Chief Economist at the European Policy Centre.
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