Mastering corner traps when setting up your Eurostars project budget

26th July 2018 at 12:17 pm

During the last cut-off in March this year, accelopment has supported a successful application of a Swiss-German collaboration. Whereas some parts of the application process are straight forward, the question of how the project will be funded is a more complex topic that needs to be addressed thoroughly since funding rules differ between the eligible countries and types of organisations.

National funding rules for SMEs

The Eurostars programme is supported by 36 Eurostars Participating States and Partner Countries and in most of them, SMEs get around 50% of their project costs funded. However, some countries distinguish not only between different types of organisations, but also between different types of SMEs. For example, in Austria, the national funding agency FFG has different funding rates for small and medium sized companies, whereas in France the national agency Bpifrance differentiates between so-called SME Eurostars and “normal” SMEs. According to Bpifrance’s definition, an “SME Eurostars” is in fact an “R&D-performing SME”, which have specific characteristics depending on their number of full-time equivalent (FTE) employees. R&D performing SMEs with up to 100 FTEs must have at least 10% of their turnover, 10% of FTE or at least 5 of their FTEs dedicated to R&D activities, whereas R&D-performing SMEs with up to 250 must have at least 10 instead of 5 FTEs dedicated to their R&D activities.

While this is already rather complicating, in some countries SMEs or other project partners can claim overheads and get these also funded. In Switzerland, SMEs participating in Eurostars can use the fixed hourly rates of Innosuisse, the Swiss national innovation agency, which also include overheads. So, in practice, the 50% funding rate for Swiss SMEs can increase to 60% and more funding of costs incurred by a company`s project activities.

For all other organisations, such as larger companies that do not fulfil the SME criteria (see the European Commission’s “User Guide to the SME Definition”), the funding rates can range from 0% (e.g. for public research bodies in the UK) to 100% (e.g. for public institutions in Germany).

In conclusion, before you apply to Eurostars, make sure you know about the specific funding rules for your country, your (exact) type of organisation and all other factors that might apply to you. Each country has a National Project Coordinator (NCP) who can provide guidelines on the national funding rules and procedures and we are happy to support you throughout the application process, as well.

Ceiling amounts for Eurostars funding

For our project with partners from Switzerland and Germany, we have carefully checked the specific funding rules that apply for the respective countries before planning the project budget, since the funding percentage of eligible costs is not all that must be considered when applying to Eurostars.

Apart from the percentage of funding you will receive for your planned project, it is also essential to know that the amount you can request is in most countries not infinite. The national funding rules specify the amount of maximum financial support, which then corresponds to the percentage of funding of eligible costs. Similar to the percentage of funding of eligible costs, these ceiling amounts can vary from country to country and often indicates the maximum financial support per project.

For example, in Switzerland, a Eurostars project can be awarded with a maximum of 500,000 euro. This equals eligible costs of up to 1 million euro for Swiss SMEs and Swiss Universities as they can request 50% of eligible costs. Fortunately, in our recent project, we only had one Swiss partner involved so that the ceiling amount did not have to be shared with other Swiss partners.

Indeed, in most Eurostars countries, there is a cap or ceiling on the amount available to one project, independent of the number of partners involved in the particular country.

And there are even more of such tricky rules regarding the maximum financial support. In Ireland, for example, the national funding agency Enterprise Ireland distinguishes between “normal” SMEs for which a maximum grant of € 450,000 is available and micro-enterprises to which a lower maximum grant of €75,000 may apply.

Once again it is therefore of the utmost importance to carefully check and consider your national funding rules when applying to Eurostars to have your project planning under control right from the beginning. Make sure you know how much you can request in your country and for your organisation type, if the ceiling amount applies to your organisation only or if you have a project partner you will need to share with, and if there are any exceptions to financial support in your country.

Budget-balancing between project partners

Distributing the overall project costs evenly among all partners would appear to be desirable but is not always possible. In our particular Swiss-German partnership, the Swiss SME did not only have higher costs due to higher salaries but also because of more labour intensive tasks, which resulted in a significantly higher budget than for its German collaborator.

In practice, the project costs are hardly ever evenly distributed across project partners for these and other reasons. However, depending on the evaluators, project budgets where one partner has substantially higher costs than others might be considered as unbalanced.

To avoid uneven allocations between project partners, Eurostars has defined eligibility criteria concerning the project budget in their Eurostars Eligibility Guidelines that must be met in order to be put forward for evaluation. Firstly, the budget (excluding subcontracting) of the R&D performing SME is equal to at least 50% of the total project budget. If there are more than one, their combined budget must equal to at least 50%. Secondly, no organisation can be responsible for more than 75% of the total project budget, and thirdly, no more than 75% of the total project budget may be allocated to one participating country.

Although it is imperative to comply with the criteria laid down in the eligibility guide to explain the planned costs of each partner carefully and any potentially perceived imbalance, it is of as much importance that the costs are justified and reflect the proposed project activities and actual costs.

How accelopment can help your Eurostars application

During the last Eurostars cut-off in March 2018, we have supported another successful Eurostars project and are eager to share our knowledge with future applicants. We at accelopment have vast experience in European grant applications, including project proposals for the Eurostars programme. In the past we have supported the awarded OPTO-BRAIN, NoCATs, MAXCOAT and only recently sus@pension. For our approved applications, we offer further support in contract negotiations and also project management to help your project get off the ground.