(1)

This Regulation lays down a financial envelope for the Digital Europe Programme (the ‘Programme’) for the period 2021-2027, which is to constitute the prime reference amount, within the meaning of point 18 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources (4), for the European Parliament and for the Council during the annual budgetary procedure.

(2)

The Programme should be established for a period of seven years to align its duration with that of the multiannual financial framework laid down in Council Regulation (EU, Euratom) 2020/2093 (5) (MFF 2021-2027).

(3)

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (6) (the ‘Financial Regulation’) applies to the Programme. The Financial Regulation lays down rules on the implementation of the Union budget, including the rules on grants, prizes, procurement, indirect management, financial instruments, budgetary guarantees, financial assistance and the reimbursement of external experts.

(4)

In accordance with Article 193(2) of the Financial Regulation, a grant may be awarded for an action which has already begun, provided that the applicant can demonstrate the need for starting the action prior to signature of the grant agreement. However, the costs incurred prior to the date of submission of the grant application are not eligible, except in duly justified exceptional cases. In order to avoid any disruption in Union support which could be prejudicial to the interests of the Union, it should be possible to provide in the financing decision, during a limited period of time at the beginning of the MFF 2021-2027, and only in duly justified cases, for the eligibility of activities and underlying costs from the beginning of the 2021 financial year, even if they were implemented and incurred before the grant application was submitted.

(5)

In accordance with the Financial Regulation, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (7) and Council Regulations (EC, Euratom) No 2988/95 (8), (Euratom, EC) No 2185/96 (9) and (EU) 2017/1939 (10), the financial interests of the Union are to be protected by means of proportionate measures, including measures relating to the prevention, detection, correction and investigation of irregularities, including fraud, to the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, to the imposition of administrative penalties. In particular, in accordance with Regulations (Euratom, EC) No 2185/96 and (EU, Euratom) No 883/2013, the European Anti-Fraud Office (OLAF) has the power to carry out administrative investigations, including on-the-spot checks and inspections, with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union. The European Public Prosecutor’s Office (EPPO) is empowered, in accordance with Regulation (EU) 2017/1939, to investigate and prosecute criminal offences affecting the financial interests of the Union, as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council (11).

In accordance with the Financial Regulation, any person or entity receiving Union funds is to fully cooperate in the protection of the financial interests of the Union, grant the necessary rights and access to the Commission, OLAF, the Court of Auditors and, in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, the EPPO, and ensure that any third parties involved in the implementation of the Union funds grant equivalent rights.

(6)

Pursuant to Council Decision 2013/755/EU (12), persons and entities established in overseas countries and territories should be eligible for funding subject to the rules and objectives of the Programme and to possible arrangements applicable to the Member State to which the relevant overseas country or territory is linked. The effectiveness of their participation in the Programme should be monitored and regularly evaluated by the Commission.

(7)

Pursuant to paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (13), the Programme should be evaluated on the basis of information collected in accordance with specific monitoring requirements that correspond to existing needs and comply with Regulation (EU) 2016/679 of the European Parliament and of the Council (14), while avoiding an administrative burden, in particular on Member States, and overregulation, and taking into account existing measuring and benchmarking frameworks in the digital field. Those requirements, where appropriate, should include measurable quantitative and qualitative indicators as a basis for evaluating the effects of the Programme on the ground.

(8)

The Programme should ensure utmost transparency and accountability of innovative financial instruments and mechanisms that involve the Union budget, with respect to their contribution towards achieving Union objectives, both as regards initial expectations and the end results.

(9)

The Tallinn Digital Summit of September 2017 and the Conclusions of the European Council of 19 October 2017 indicated the need for the Union to invest in digitising its economies and addressing the skills gap to maintain and enrich European competitiveness and innovation, quality of life and social fabric. The European Council concluded that digital transformation offers immense opportunities for innovation, growth and jobs, will contribute to our global competitiveness, and will enhance creative and cultural diversity. Seizing those opportunities requires collectively tackling some of the challenges posed by the digital transformation and reviewing policies affected by the digital transformation.

(10)

The European Council concluded in particular that the Union should urgently address emerging trends, including issues such as artificial intelligence (AI) and distributed ledger technologies (e.g. blockchain), while at the same time ensuring a high level of data protection in full compliance with Regulation (EU) 2016/679, digital rights, fundamental rights and ethical standards. The European Council invited the Commission to put forward a European approach to AI by early 2018 and called on the Commission to put forward the necessary initiatives to strengthen the framework conditions with a view to enabling the Union to explore new markets through risk-based radical innovations and to reaffirming the leading role of its industry.

(11)

Building a strong European digital economy and society would be enhanced by the proper implementation of the Connecting Europe Facility established by a Regulation of the European Parliament and of the Council and the European Electronic Communications Code established by Directive (EU) 2018/1972 of the European Parliament and of the Council (15).

(12)

In its communication of 14 February 2018, entitled ‘A new, modern Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020’, the Commission, taking into consideration the options for the new multiannual financial framework, outlines a programme for Europe’s digital transformations to deliver strong progress towards smart growth in areas such as high-quality data infrastructure, connectivity and cybersecurity. The Programme would seek to secure European leadership in supercomputing, next generation internet, AI, robotics and big data. It would reinforce the competitive position of industry and business in Europe across the digitised economy and would have a significant impact on bridging and filling the skills gap across the Union so that citizens have the necessary skills and knowledge to face the digital transformation.

(13)

The Commission communication of 25 April 2018, entitled ‘Towards a common European data space’, addresses the new measures to be taken as a key step towards a common data space in the Union, a seamless digital area with a scale that will enable the development and innovation of new products and services based on data.

(14)

The general objectives of the Programme should be to support the digital transformation of industry and to foster better exploitation of the industrial potential of policies on innovation, research and technological development, for the benefit of citizens and businesses across the Union, including its outermost regions and its economically disadvantaged regions. The Programme should be structured into five specific objectives that reflect key policy areas, namely: High Performance Computing; Artificial Intelligence; Cybersecurity and Trust; Advanced Digital Skills; and Deployment and Best Use of Digital Capacities and Interoperability. For all those key policy areas, the Programme should also aim to better align Union, Member State and regional policies, and to pool private and industrial resources in order to increase investment and develop stronger synergies. In addition, the Programme should strengthen the Union’s competiveness and the resilience of its economy.

(15)

The five specific objectives are distinct but interdependent. For example, AI needs cybersecurity to be trustworthy, high performance computing (HPC) capabilities are key for supporting learning in the context of AI, and all three capacities require advanced digital skills. Although individual actions under the Programme relate to a single specific objective, the objectives should not be viewed in isolation, but rather as forming the core of a coherent package.

(16)

There is a need to support small and medium-sized enterprises (SMEs) that intend to harness the digital transformation in their production processes. Such support would allow SMEs to contribute to the growth of the European economy through an efficient use of resources.

(17)

A central role in the implementation of the Programme should be attributed to European Digital Innovation Hubs, which should stimulate the broad adoption of advanced digital technologies by industry, in particular by SMEs and by other entities that employ up to 3 000 people (mid-caps), by public organisations and by the academic community. In order to clarify the distinction between digital innovation hubs that comply with the eligibility criteria under the Programme and digital innovation hubs established following the Commission communication of 19 April 2016 entitled ‘Digitising European Industry – Reaping the full benefits of a Digital Single Market’ and financed by other sources, the hubs financed under the Programme should be called European Digital Innovation Hubs. European Digital Innovation Hubs should serve as access points for the latest digital capacities, including HPC, AI, cybersecurity, as well as for other existing innovative technologies such as key enabling technologies, available also in fablabs or citylabs. European Digital Innovation Hubs should act as single-entry points in accessing tested and validated technologies and should promote open innovation. They should also provide support in the area of advanced digital skills, for example by coordinating with education providers for the provision of short-term training for workers and internships for students. The network of European Digital Innovation Hubs should ensure broad geographical coverage across Europe and should contribute to the participation of the outermost regions in the Digital Single Market.

(18)

During the first year of the Programme, an initial network of European Digital Innovation Hubs should be established through an open and competitive process from among entities designated by Member States. To that end, Member States should be free to propose candidates in accordance with their national procedures and national administrative and institutional structures. The Commission should take the utmost account of the opinion of each Member State before selecting a European Digital Innovation Hub in the territory of that Member State. Entities which already carry out functions as digital innovation hubs in the context of the Digitising European Industry Initiative could be designated by Member States as candidates as a result of an open and competitive process. The Commission should be able to involve independent external experts in the selection process. The Commission and the Member States should avoid the unnecessary duplication of competences and functions at Union and national level. There should therefore be adequate flexibility when designating the hubs and determining their activities and composition. In order to ensure a broad geographical coverage across Europe, as well as a balance of coverage of technologies and sectors, the network might be further enlarged through a subsequent open and competitive process.

(19)

European Digital Innovation Hubs should develop appropriate synergies with relevant actions funded by Horizon Europe – the Framework Programme for Research and Innovation established by Regulation (EU) 2021/695 of the European Parliament and of the Council (16) (Horizon Europe) or by other research and innovation programmes, with the European Institute of Innovation and Technology (EIT) established by a Regulation of the European Parliament and of the Council, in particular its Knowledge and Innovation Communities (KICs), as well as with established networks such as the Entreprise Europe Network, or the InvestEU Advisory Hub established in accordance with Regulation (EU) 2021/523 of the European Parliament and of the Council (17).

(20)

European Digital Innovation Hubs should act as facilitators to bring together industries, businesses and public administrations which are in need of new technological solutions, with businesses, in particular start-ups and SMEs, that have market-ready solutions.

(21)

A consortium of legal entities may be selected as European Digital Innovation Hubs in accordance with point (c) of Article 197(2) of the Financial Regulation that allows entities which do not have legal personality under the applicable national law to participate in calls for proposals, provided that their representatives have the capacity to undertake legal obligations on behalf of those entities and that those entities offer guarantees for the protection of the financial interests of the Union that are equivalent to those offered by legal persons.

(22)

European Digital Innovation Hubs should be allowed to receive contributions from Member States and participating third countries, including from public authorities within Member States and those third countries, contributions from international bodies or institutions, and contributions from the private sector, in particular from members, shareholders or partners of the European Digital Innovation Hubs. European Digital Innovation Hubs should also be allowed to receive revenues generated by the European Digital Innovation Hubs’ own assets and activities, bequests, donations and contributions from individuals and funding from the Programme and other Union programmes, including in the form of grants.

(23)

The Programme should be implemented through projects that reinforce and widen the use of essential digital capacities. Such implementation should involve co-financing with Member States and, where necessary, the private sector. The co-financing rate should be established in the work programme. By way of derogation from the general rule, the Union funding should be able to cover up to 100 % of eligible costs. In particular, such financing should require reaching a critical mass in procurement to obtain better value for money and to guarantee that suppliers in Europe stay at the forefront of technology advancements.

(24)

The policy objectives of the Programme should also be addressed through financial instruments and budgetary guarantees under the InvestEU Programme established by Regulation (EU) 2021/523.

(25)

The Programme’s actions should be used to improve further the Union’s digital capacities and to address market failures or sub-optimal investment situations, in a proportionate manner, without duplicating or crowding out private financing, and should provide clear European added value.

(26)

In order to achieve maximum flexibility throughout the lifetime of the Programme and to develop synergies between the components of the Programme, it should be possible for each of the specific objectives to be implemented through any of the instruments available under the Financial Regulation. The delivery mechanisms to be used are direct management and indirect management, where Union financing should be combined with other sources of financing or where execution requires the setup of commonly governed structures. Moreover, in order to respond in particular to new developments and needs such as new technologies, the Commission is allowed to propose to deviate from the indicative amounts set out in this Regulation in the context of the annual budgetary procedure and in accordance with the Financial Regulation.

(27)

In order to ensure the efficient allocation of funds from the Union budget, it is necessary to ensure the European added value of all actions and activities carried out under the Programme and their complementarity with Member States’ activities, while consistency, complementarity and synergies should be sought with funding programmes that support policy areas that are closely linked to each other. Although the relevant work programmes provide a tool for ensuring consistency for directly and indirectly managed actions, collaboration between the Commission and the relevant Member States authorities should be established to ensure consistency and complementarities between directly or indirectly managed funds and funds that are subject to shared management, while complying with the applicable provisions of a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (the ‘Common Provisions Regulation for 2021-2027’).

(28)

The HPC capacities and the related data processing in the Union should ensure the wider use of HPC by industry and, more generally, in areas of public interest, in order to seize unique opportunities that supercomputers bring to society as regards health, environment and security, as well as to the competitiveness of industry, in particular SMEs. Acquiring world-class supercomputers would secure the Union’s supply system and would help deploy services for simulation, visualisation and prototyping, while ensuring that HPC systems comply with Union values and principles.

(29)

The support for the Union’s intervention in the HPC area was expressed by the European Parliament and by the Council. Moreover, between 2017 and 2018, 22 Member States signed the European Declaration on HPC, a multi-government agreement in which they committed to collaborating with the Commission to build and deploy state-of-the-art HPC infrastructures and data infrastructures in Europe that would be available to scientific communities and to public and private partners across the Union.

(30)

As highlighted in the impact assessment accompanying the Commission proposal for a Council Regulation establishing the European High Performance Computing Joint Undertaking, in order to achieve Specific Objective ‘High Performance Computing’, a joint undertaking is deemed to be the most suitable means of implementation, in particular to coordinate Union and national strategies and investments in HPC infrastructure, as well as research and development, pool resources from public and private funds, and safeguard the economic and strategic interests of the Union. Moreover, the national High Performance Computing competence centres within the meaning of the Council Regulation (EU) 2018/1488 (18) provide HPC services to industry, including SMEs and start-ups, the academic community and public administrations.

(31)

Developing capacity related to AI is a crucial driver for the digital transformation of industry, services and the public sector. Ever more autonomous robots are used in factories, deep sea applications, homes, cities and hospitals. Commercial AI platforms have moved from testing to having real applications in the health and environmental sectors. All major car manufacturers are developing self-driving cars, and machine-learning techniques are at the heart of all main web platforms and big data applications. It is essential for Europe to join forces at all levels to be competitive internationally. Member States have acknowledged this through concrete commitments for collaboration in a coordinated action plan.

(32)

Libraries of algorithms may cover a large set of algorithms, including simple solutions such as classification algorithms, neural network algorithms and planning or reasoning algorithms. They may also cover more complex solutions, such as speech recognition algorithms, navigation algorithms embedded in autonomous devices, such as drones or autonomous cars and AI algorithms built into robots to enable them to interact with and adapt to their environment. Libraries of algorithms should be made easily accessible to everyone on the basis of fair, reasonable and non-discriminatory terms.

(33)

In its resolution of 1 June 2017 on digitising European industry, the European Parliament pointed out the impact of language barriers on industry and on the digitisation of industry. In that context, the development of large-scale AI-based language technologies, such as automatic translation, speech recognition, big data text analytics, dialogue and question-answering systems, is essential to preserving linguistic diversity, ensuring inclusiveness and enabling human-to-human and human-to-machine communication.

(34)

Products and services based on AI should be user-friendly, should comply with the law by default and should provide consumers with more choice and more information, in particular regarding the quality of products and services.

(35)

The availability of large-scale data sets and of testing and experimentation facilities are of major importance to the development of AI, including language technologies.

(36)

In its resolution on digitising European industry, the European Parliament highlighted the importance of a common European cybersecurity approach and recognised the need to raise awareness. It considered cyber-resilience as a crucial responsibility for business leaders and national and European industrial and security policymakers, as well as the implementation of security and privacy by design and by default.

(37)

Cybersecurity is a challenge for the entire Union that cannot be addressed only by national initiatives. Europe’s cybersecurity capacity should be reinforced to endow Europe with the necessary capacities to protect its citizens, public administrations and businesses from cyber threats. In addition, consumers should be protected when using connected products that can be hacked and can compromise their safety. Such protection should be achieved together with Member States and the private sector by developing projects to reinforce Europe’s capacities in cybersecurity, by ensuring coordination between those projects and by ensuring the wide deployment of the latest cybersecurity solutions across the economy, including dual-use projects, services, competences and applications, as well as by aggregating competences in this field to ensure critical mass and excellence.

(38)

In September 2017, the Commission put forward a package of initiatives setting out a comprehensive Union approach to cybersecurity, with the aim of reinforcing Europe’s capacity to deal with cyberattacks and cyber threats and to strengthen technology and industrial capacity in this field. That package includes Regulation (EU) 2019/881 of the European Parliament and of the Council (19).

(39)

Trust is a prerequisite for the Digital Single Market to function. Cybersecurity technologies such as digital identities, cryptography and intrusion detection, and their application in areas such as finance, industry 4.0, energy, transport, healthcare, and e-government are essential to safeguarding the security of, and trust in, online activities and transactions by citizens, public administrations, and businesses.

(40)

The European Council, in its conclusions of 19 October 2017, stressed that to successfully build a Digital Europe, the Union needs labour markets, training and education systems that are fit for the digital age and that there is a need to invest in digital skills to empower and enable all Europeans.

(41)

In its conclusions of 14 December 2017, the European Council called on Member States, the Council and the Commission to take forward the agenda of the Gothenburg Social Summit of November 2017, including the European Pillar of Social Rights, as well as education and training and the delivery of the new European Skills Agenda. The European Council also asked the Commission, the Council and the Member States to examine possible measures to address the skills challenges linked to digitisation, cybersecurity, media literacy and AI and to address the need for an inclusive, lifelong-learning-based and innovation-driven approach to education and training. In response, the Commission presented on 17 January 2018 a first package of measures, addressing key competences, digital skills, common values and inclusive education. In May 2018, a second package of measures was launched, advancing work to build a European Education Area by 2025, which also emphasises the centrality of digital skills. Media literacy includes essential competencies (knowledge, skills and attitudes) that allow citizens to engage effectively with media and other information providers and to develop critical thinking and lifelong learning skills for socialising and becoming active citizens.

(42)

Considering the need for a holistic approach, the Programme should also take into account inclusion, qualification, training and specialisation, which, in addition to advanced digital skills, are decisive for the creation of added value in the knowledge society.

(43)

In its resolution on digitising European industry, the European Parliament stated that education, training and lifelong learning are the cornerstone of social cohesion in a digital society. It further demanded that the gender balance perspective be incorporated in all digital initiatives, emphasising the need to address the gender gap within the information and communications technology (ICT) sector, since this is essential to Europe’s long-term growth and prosperity.

(44)

The advanced digital technologies supported by the Programme, such as HPC, cybersecurity and AI, are now sufficiently mature to move beyond the research phase and be deployed, implemented and scaled-up at Union level. In the same way as the deployment of those technologies require a Union response, so does the advanced digital skills dimension. Training opportunities in advanced digital skills, including data protection competencies, need to be scaled up, increased and made accessible throughout the Union. Failing to do that could impede the smooth deployment of advanced digital technologies and could hamper the overall competitiveness of Union’s economy. The actions supported by the Programme are complementary to those supported by the European Social Fund Plus (ESF+), the European Regional Development Fund (ERDF) and Erasmus+, each established by a Regulation of the European Parliament and of the Council, and Horizon Europe. Those actions will target the Union workforce in the private sector as well as the public sector, in particular ICT professionals and other related professionals, as well as students, trainees and trainers. The term ‘workforce’ refers to the economically active population, and includes both workers and self-employed people who are in occupation and unemployed people.

(45)

Modernising public administrations and services by digital means is crucial to reducing the administrative burden on businesses, including SMEs, and on citizens in general by making their interactions with public authorities faster, more convenient and less costly, as well as by increasing the efficiency, transparency and the quality of the services provided to citizens and businesses, while at the same time increasing the efficiency of public spending. Since a number of services of public interest already have a Union dimension, the support provided to their implementation and deployment at Union level should ensure that citizens and businesses will beable to benefit from access to high-quality digital services across the Union that are, where possible, multilingual. Moreover, Union support in this area is expected to encourage the re-use of public sector information.

(46)

Digitalisation can facilitate and improve barrier-free accessibility to all, including older people, people with reduced mobility or with disabilities, and people in remote or rural areas.

(47)

The digital transformation of areas of public interest such as healthcare, mobility, justice, earth or environmental monitoring, security, the reduction of carbon emissions, energy infrastructure, education and training, and culture requires the continuation and expansion of digital service infrastructures, which make possible the secure cross-border exchange of data and which foster national development. Coordination between those digital service infrastructures under this Regulation would best achieve the potential for exploiting synergies.

(48)

The deployment of the necessary digital technologies, in particular those under Specific Objectives ‘High Performance Computing’, ‘Artificial Intelligence’ and ‘Cybersecurity and Trust’, is key to reaping the benefits of digital transformation and might be complemented by other leading-edge and future technologies, such as distributed ledger technologies (e.g. blockchain).

(49)

The digital transformation should allow citizens to have access to, use and manage their personal data securely across borders, irrespective of their location or the location of the data.

(50)

In the Tallinn Declaration on eGovernment of 6 October 2017, the ministers in charge of eGovernment policy and coordination from the Member States and the countries which are members of the European Free Trade Association concluded that digital progress is transforming their societies and economies to the core, challenging the effectiveness of previously developed policies in a broad range of areas as well as the role and function of the public administration overall, and that it is their duty to anticipate and manage those challenges to meet the needs and expectations of citizens and businesses.

(51)

The modernisation of European public administrations is one of the key priorities for successful implementation of the Digital Single Market. The mid-term evaluation of the Digital Single Market strategy highlighted the need to strengthen the transformation of public administrations and to ensure citizens have easy, trusted, and seamless access to public services.

(52)

The Annual Growth Survey published by the Commission in 2017 shows that the quality of European public administrations has a direct impact on the economic environment and is therefore crucial to stimulating productivity, competitiveness, economic cooperation, sustainable growth, employment and high-quality jobs. In particular, efficient and transparent public administrations and effective justice systems are necessary to support economic growth and to deliver high-quality services to citizens and businesses.

(53)

The interoperability of European public services concerns all levels of administration: Union, national, regional and local. Besides removing barriers to a functioning internal market, interoperability facilitates cross-border cooperation, the promotion of European standards and the successful implementation of policies, and offers great potential for avoiding cross-border electronic barriers, further securing the emergence of new, and the consolidation of developing, common public services at Union level. In order to eliminate the fragmentation of European public services and to support fundamental freedoms and operational mutual recognition in the Union, a holistic cross-sector and cross-border approach to interoperability should be promoted in the manner that is most effective and is most responsive to end-users. Such an approach implies that interoperability is to be understood in a broad sense, spanning technical and legal layers and encompassing policy elements in the field. Accordingly, the span of activities would go beyond the usual lifecycle of solutions to include all the intervention elements that would support the necessary framework conditions for sustained interoperability at large. The Programme should also facilitate cross-fertilisation between different national initiatives, leading to the development of a digital society.

(54)

The Programme should encourage open-source solutions in order to allow reuse, increase trust and secure transparency. Such an approach will have a positive impact on the sustainability of funded projects.

(55)

The budget allocated to specific actions dedicated to the implementation of the interoperability framework and the interoperability of developed solutions is expected to be EUR 194 million.

(56)

The European Parliament’s resolution on digitising European industry stressed the importance of unlocking sufficient public and private finance for the digitisation of Europe’s industry.

(57)

On 19 April 2016, the Commission adopted the Digitising European Industry initiative to ensure that any industry in Europe, big or small, wherever situated and in any sector can fully benefit from digital innovations. This is of particular relevance to SMEs in the cultural and creative sectors.

(58)

The European Economic and Social Committee welcomed the Commission communication on Digitising European Industry and considered it, together with accompanying documents, as ‘the first step in a vast European work programme to be carried out in close mutual cooperation between all interested public and private parties’.

(59)

Reaching the target objectives may require leveraging the potential of complementary technologies in the networking and computing domains, as stated in the Commission communication on Digitising European Industry, which recognises the ‘availability of world class networking and cloud infrastructure’ as an essential component of the digitisation of industry.

(60)

By providing for a single set of rules directly applicable in the Member States legal orders, Regulation (EU) 2016/679 guarantees the free flow of personal data between Member States and reinforces trust and the security of individuals, two indispensable elements for a real Digital Single Market. All actions taken under the Programmewhich involve the processing of personal data should therefore contribute to the smooth implementation of that Regulation, for example in the field of AI and distributed ledger technologies (e.g. blockchain). Those actions should support the development of digital technologies that comply with the obligations on data protection by design and by default.

(61)

The Programme should be implemented in a manner that fully respects the Union and international framework of intellectual property protection and enforcement. The effective protection of intellectual property plays a key role in innovation and is, therefore, necessary for the effective implementation of the Programme.

(62)

Third countries which are members of the European Economic Area may participate in Union programmes in the framework of the cooperation established under the Agreement on the European Economic Area (20), which provides for the implementation of the programmes on the basis of a decision adopted under that Agreement. Third countries may also participate on the basis of other legal instruments. Those instruments should be able to provide for partial association, namely association to a limited number of specific objectives pursued under the Programme. A specific provision should be introduced in this Regulation requiring third countries to grant the necessary rights and access required for the authorising officer responsible, OLAF and the Court of Auditors to comprehensively exercise their respective competences.

(63)

The bodies entrusted with the implementation of the Programme should comply with the provisions applicable to the Union institutions and with the national law regarding the handling of information, in particular sensitive non-classified information and EU classified information. For Specific Objective ‘Cybersecurity and Trust’, security reasons may require legal entities that are controlled from third countries to be excluded from calls for proposals and tenders under the Programme. In exceptional cases, such exclusions may also be required for Specific Objectives ‘High Performance Computing’ and ‘Artificial Intelligence’. The security reasons for such exclusions should be proportionate and should be duly justified by reference to the risks that the inclusion of such entities would represent.

(64)

Reflecting the importance of tackling climate change in line with the Union’s commitments to implement the Paris Agreement, adopted under the United Nations Framework Convention on Climate Change (21), and to the United Nations Sustainable Development Goals, the Programme is intended to contribute to the mainstreaming of climate actions and to the achievement of an overall target of 30 % of the Union budget expenditure supporting climate objectives and the ambition of 7,5 % of the budget reflecting biodiversity expenditures in 2024 and 10 % in 2026 and 2027 while considering the existing overlaps between climate and biodiversity goals. Relevant actions should be identified during the Programme’s preparation and implementation, and should be reassessed in the context of the relevant evaluations and review processes.

(65)

As the Programme is new, it is useful to provide, in an annex, a technical description of the Programme’s scope of actions. That technical description included in such an annex should be taken into account by the Commission when preparing work programmes, whereas the work programmes should be consistent with the specific objectives set out in this Regulation.

(66)

The work programmes should be adopted in principle as multiannual work programmes, typically every two years, or, if justified by needs related to the implementation of the programme, as annual work programmes. The forms of Union funding and the methods of implementation of the Programme should be chosen on the basis of their ability to achieve the specific objectives of the actions and to deliver results, taking into account, in particular, the costs of controls, the administrative burden, and the expected risk of non-compliance. That choice should include the consideration of the use of lump sums, flat-rate financing and unit costs, as well as financing not linked to costs as referred to in Article 125(1) of the Financial Regulation.

(67)

The power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union (TFEU) should be delegated to the Commission in order to amend Annex I to this Regulation to reflect technological change and market developments, with regard to the actions set out therein in a manner consistent with the objectives of this Regulation and to amend Annex II thereto with regard to the measurable indicators where considered to be necessary as well as to supplement this Regulation with provisions on the establishment of a monitoring and evaluation framework. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(68)

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission as regards the selection of the entities forming the initial and additional European Digital Innovation Hubs and the adoption of the work programmes for Specific Objectives 2, 4 and 5 and for possible other actions under direct management for Specific Objectives 1 and 3 so that the objectives of the Programme are achieved in accordance with the Union and Member States’ priorities while ensuring consistency, transparency and continuity of joint action by the Union and the Member States. Those implementing powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (22). For actions subject to indirect management, the work programmes are adopted in accordance with rules of the governing boards of the bodies entrusted with the implementation of the Programme.

(69)

This Regulation respects fundamental rights and observes the principles recognised in the Charter of Fundamental Rights of the European Union (the ‘Charter’), in particular those regarding the protection of personal data, the freedom of expression and information, the freedom to conduct business, the prohibition of discrimination, healthcare, consumer protection and the right to effective remedy and fair trial. Member States should apply this Regulation in a manner consistent with those rights and principles.

(70)

Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 TFEU apply to this Regulation. Those rules are laid down in the Financial Regulation and determine in particular the procedure for establishing and implementing the Union budget through grants, prizes, procurement and indirect management, and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 TFEU also include a general regime of conditionality for the protection of the Union budget.

(71)

Since the objectives of this Regulation, namely to support and accelerate the digital transformation of the European economy, industry and society, to bring its benefits to citizens, public administrations and businesses across the Union, and to improve the competitiveness of Europe in the global digital economy while contributing to bridging the digital divide across the Union and reinforcing the Union’s strategic autonomy, cannot be sufficiently achieved by the Member States but can rather, by reason of their scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

(72)

In order to ensure continuity in providing support in the relevant policy area and to allow implementation to start from the beginning of the MFF 2021-2027, this Regulation should enter into force as a matter of urgency and should apply, with retroactive effect, from 1 January 2021.

(73)

Decision (EU) 2015/2240 of the European Parliament and of the Council (23) should therefore be repealed,