Compete to Create: How the EU’s Budget Is Debuffing Creative Industries

The EU claims its next 2028–2034 budget (Multiannual Financial Framework, MFF) will be all about competitiveness, innovation, and businesses. A closer analysis, however, reveals that new budget plans for the European Competitiveness Fund seem to disregard the economic value and impact of creative industries, a sector that yields up to €11 in GDP for every €1 invested.  

This issue reopens a recent debate in cultural policy: should culture be treated primarily as an economic sector that requires dedicated market-oriented tools, or subsidised as a public good, like education or healthcare? As a recent UNESCO report shows, tax incentives make governments act as market facilitators that reduce risk and financial barriers for private investment. Then the market dictates cultural production and how diverse it can be. By contrast, direct public spending funds cultural goods with social and cultural value that markets typically will not produce on their own. 

At Culture Action Europe, we have made our case in the State of Culture report and ‘Towards the Culture Compass: a Sector Blueprint’: culture is a public good that needs public support—at least 2% of the next EU budget, including a strong AgoraEU programme and cultural priorities in other EU funding programmes.  

But in the EU’s policy reality, these two approaches are not always mutually exclusive. Rhetorically, AgoraEU refers to both ‘the intrinsic and artistic value’ of the cultural and creative sectors and their ‘extrinsic social and economic contributions, including to […] growth and job creation, competitiveness, creativity and innovation.’ In the end, even the more industry-oriented funding calls are assessed through indicators that track access, participation, and cultural and linguistic diversity. Support for creative industries is often framed less as correcting ‘market failures’ and more as improving the ecosystem that lets culture circulate and reach audiences across borders.  

While creative industries cannot be the EU’s only cultural policy lens, and while culture shouldn’t prove economic returns to deserve support, creative entrepreneurs—from bookstores and designers to independent music companies and concert venues—provide the most immediate way to access and participate in cultural life for millions of Europeans.  

Another reason to keep creative industries in focus of the budget discussions is the need to reduce reliance on American tech and promote trustworthy, decentralised, and community-oriented alternatives to platforms for media and entertainment. 

However, AgoraEU alone can’t provide the full range of support a creative ecosystem needs. The programme mainly operates through the logic of cross-border cooperation projects and cultural exchange, rather than through loan guarantees, equity support, or start-up incubation.  

All the more, we were surprised to see that the European Commission’s proposal for the new EU budget rolled back other tools that supported creative industries’ economic dimension, digitalisation, and access to finance. 

The lack of dedicated funding for creative industries could not only erode existing successful initiatives but also push market-oriented activities into unnecessary competition with cultural projects for scarce AgoraEU funding. This is especially worrying at a time when culture was also excluded from the next Horizon Europe proposal for research and innovation.  

What happened?  

Dedicated support for creative industries is practically non-existent in the proposed European Competitiveness Fund for 2028–2034. 

Today, the EU funds creative industries through several programmes. The Single Market Programme supports cross-border collaboration and business development in sectors from fashion to furniture design (according to Culture Action Europe’s estimates, at least €8 million is budgeted since 2021 through the WORTH Partnership Project). We have also identified at least €11 million for the digitalisation of cultural heritage through the Digital Europe Programme’s calls. Among others, it finances Europeana, the European data space for cultural heritage, which provides online access to more than 50 million digitised cultural artifacts. 

Another key opportunity is loan guarantees for creative enterprises. In 2016, the European Commission and the European Investment Fund launched the Cultural and Creative Sectors Guarantee Facility under Creative Europe. Creative SMEs often struggle to access bank loans for business development because they lack conventional collateral, their assets are largely intangible, and they are perceived as higher-risk borrowers. The Guarantee Facility provided financial guarantees to banks, reducing the risk of lending to creative businesses. In the current budget cycle, this scheme was integrated into InvestEU. 

According to the recent evaluation report, the Cultural and Creative Sectors Guarantee Facility was a successful programme: its uptake has been described as ‘impressive’. With the EU guarantees of €180 million, by 2020, it had helped mobilise over €1.8 billion in loans — far exceeding the initial target of €600 million — and was estimated to have supported 59,533 jobs. Loan performance was also solid. At 1.1%, default rates were comparable with other sectors. The audiovisual and multimedia sectors accounted for 44% of supported loans, but other sectors including music, performing arts and video games also benefited. 

In its proposal for the 2028–2034 EU budget, the European Commission bundles activities currently carried out under 14 programmes, including the Digital Europe Programme, the Single Market Programme, and InvestEU, into a single European Competitiveness Fund with an indicative envelope of €234.3 billion in current prices.  

The Fund is organised around four policy windows:  

Alongside these windows, the proposal sets €11 billion for cross-cutting support: the InvestEU Instrument and a tool called ‘Project Advisory’ that will provide investment advisory, business coaching and acceleration services. In the current wording, this €11 billion is intended to support the objectives of the four main policy windows, and it seems unlikely that sectors outside that scope would be able to benefit from it.  

What stands out is how little structural space the legal proposal gives to creative industries. They appear only once, under the Digital Leadership window: ‘Support to cultural and creative industries, complementing the AgoraEU programme.’ However, in tough budget negotiations, the Council has already deleted this reference from its latest amendments to AgoraEU (mid-January 2026). 

The absence of reference to creative industries in the Fund’s legal base also weakens access to another key tool: loan guarantees for creative enterprises. 

As noted earlier, the Cultural and Creative Sectors Guarantee Facility was folded into InvestEU in the current MFF. A detailed budget breakdown for InvestEU’s Cultural and Creative Sector portfolio guarantee is not publicly available. However, based on the guarantee amounts signed with financial intermediaries under the Cultural and Creative Sectors guarantee product, the total reaches approximately €366 million as of 31 December 2024.  

In the Commission’s 2028–2034 proposal, InvestEU sits inside the European Competitiveness Fund. In the draft Regulation, the InvestEU Instrument is framed first and foremost as a delivery tool for the Fund’s four policy windows. Recital 74 leaves the door open for other sectors to benefit from the InvestEU Instrument, but on a condition: the provisioning of the financial liabilities has to be paid by those other programmes.  

AgoraEU Regulation proposal confirms this logic: if AgoraEU makes use of the ECF InvestEU Instrument, it shall provide ‘the provisioning for the budgetary guarantee and the financing to financial instruments’ (Article 15). 

Let’s recap what is happening: creative industries cannot benefit from InvestEU unless AgoraEU provides the guarantees from its own envelope. In other words, policymakers are phasing out a dedicated pot for cultural and creative loan guarantees and shifting the responsibility onto AgoraEU. 

Where, then, will creative industries be funded — especially when it comes to digitalisation, business support, and market development? At the moment, given the Council’s position, we see no clear hooks that would allow creative industries to benefit from the European Competitiveness Fund, even though it effectively ‘absorbs’ almost €400 million that currently supports the creative industries.  

The absence of creative industries from the European Competitiveness Fund is exacerbated by culture’s omission from the proposed new Horizon Europe programme. Culture-related research is no longer set out as a dedicated structural component comparable to today’s Cluster 2. 

The Horizon Europe proposal also removes a clear reference to the European Institute of Innovation and Technology (EIT). The EIT is intended to better connect business, education and research (the so-called ‘knowledge triangle’) through thematic Knowledge and Innovation Communities, including one focused on Culture and Creativity. 

In practice, it provides a wide range of support, from funding Master’s and PhD university modules in the creative industries (developed in collaboration with industry representatives) to offering grants for market entry and scaling, as well as strategic mentoring and coaching for early-stage innovation projects. 

Under the new Horizon Europe proposal, the future of the EIT remains uncertain—and with it, the future of the Culture and Creativity Knowledge and Innovation Community. 

What can be done?

While creative industries can clearly contribute across all the policy windows of the European Competitiveness Fund, from decarbonisation to health, we suggest giving them a clear home and stronger role under the Digital Leadership window. Culture Action Europe proposes to add six objectives for creative industries to the Fund’s legal base: 

• promote ethical and human-centred digital tech uptake in creative industries; 

• maintain and develop the common European data space for cultural heritage; 

• support digitisation and digitalisation of cultural heritage; 

• help creative SMEs develop and scale innovative business models; 

• improve access to global markets for creative SMEs; 

• provide finance and business support for creative SMEs to grow sustainably. 

These changes should also be reflected in the articles that define the Fund’s structure, governance and budget lines (notably Articles 1, 3 and 83).  

Now is the moment to mobilise the European Parliament, which is preparing its position on the European Competitiveness Fund. The ITRE Committee (Industry, Research and Energy) is leading, with Christian Ehler (EPP, DE) and Dan Nica (S&D, RO) as co-rapporteurs.  

The Council has deleted the reference to cultural and creative sectors, but the Parliament can still reinstate it and plant creative industries more firmly in the European Competitiveness Fund. 

In mid-March, ITRE is expected to publish its draft report on the European Competitiveness Fund. The deadline for ITRE members (shadow rapporteurs) to table amendments is 21 April, followed by 24 April as the deadline for other committees to submit their input. The Culture and Education Committee is not providing an opinion on the European Competitiveness Fund, so the cultural sector’s demands will need to land mainly through ITRE and the other committees drafting opinions.   

ITRE is provisionally scheduled to vote for the report on 10 September 2026. 

Culture Action Europe therefore calls on the European Parliament to recognise creative industries as a sector that should be supported by the European Competitiveness Fund under the Digital Leadership window. 

In parallel, we call on Member States, as they continue negotiating the European Competitiveness Fund, to reinstate and strengthen the place of creative industries so they are not excluded from the Fund’s priorities or delivery tools. 

Image Credit: Nika