Single market, innovation and digital: Heading 1 of the 2021-2027 MFF

The European Union's long-term budget, the multiannual financial framework (MFF) sets out the maximum annual amounts of spending for a seven-year period. The 2021 2027 MFF is structured around the EU's spending priorities, reflected in broad categories of expenditure or 'headings'. Following the Covid 19 outbreak, the EU's recovery instrument, Next Generation EU (NGEU), will reinforce the EU long-term budget. Heading 1 – Single market, innovation and digital – covers spending in four policy areas: research and innovation, European strategic investments, single market, and space. With an allocation of €132.8 billion (in 2018 prices), it represents 12.4 % of the MFF. It is complemented by additional funds of €10.6 billion from the recovery instrument allocated under two flagship programmes, Horizon Europe and InvestEU for the duration of NGEU. This heading is key for the mobilisation of private investment and EU growth, issues that have been the centre of focus throughout the discussions on the future financing of the EU. This briefing presents the structure and budget allocation under Heading 1. It describes the evolution of the budgetary positions in the different steps of the negotiations and presents the policy clusters. It then details some considerations that could influence forthcoming budgetary discussions. This is an update of a briefing from January 2020.