Busquin wants looser stability pact with view to boosting R&D

Date: 18/07/02

By Peter Chapman

SCIENCE Commissioner Philippe Busquin is pressing for the budgetary straitjacket around member states to be loosened a little to give them more scope to invest in research, innovation and education.

Speaking to European Voice, Busquin said he favours new guidelines to the EU's stability and growth pact to allow countries 'on the margin' to grant subsidies or specific tax cuts to boost know-how.

He said he was arguing for the budget boost in an R&D paper, to be unveiled in September, which he has drawn up with counterparts Pedro Solbes, monetary commissioner, and Mario Monti, competition chief.

'Maybe this type of investment must be considered positively because they prepare the future. It's not consumption - its real investment,' he said, adding: 'We keep excellence in Europe and we keep the best for the future.'

The joint paper follows a pledge by EU leaders at the Barcelona summit last March to nurture annual investment in R&D at a level of 3 of GDP to match the US.

However, Busquin stressed this did not mean countries lurching towards the red should be able to spend as much as they like on R&D.

'Fundamentally we cannot accept deficits and we cannot accept too large debts. But within these constraints we can be more open about some types of investment,' he said.

At the same time he acknowledged that not all government spending or tax cuts would work - and that measuring their likely economic impact was tricky because the results are 'subjective'.

Some tax-cutting member states - notably France - are attracting the ire of Solbes for failing to live up to the terms of the stability pact. Busquin said such member states should consider specific tax breaks aimed at bolstering R&D.

A good example, he said, was the UK government's decision to give companies a 25 tax credit for investment in research.

'Maybe it is preferable to give some differentiation for investment for the future - it must have more value,' he said.

On state aid, Busquin said member states must continue to subsidise R&D to help the EU plug the huge gap in R&D spending with the US - despite tough rules aimed at stamping out distortions to the Union's single market.

He said he agreed with Mario Monti - who opposes state aid designed to give national champions a leg up in the market.

Instead, he said hand-outs should go to upstream research in the 'pre-competitive' stage - five or ten years before a product is placed on the market.

'It's not possible for enterprises to pay for all the research,' he added.

Science Commissioner Philippe Busquin is pressing for the budgetary straitjacket around Member States to be loosened a little to give them more scope to invest in research, innovation and education.