The ex-ante RHOMOLO assessment of the macroeconomic impact of the ECF Digital Leadership window 2028-2034

This paper provides an ex-ante assessment of the macroeconomic impact of the Digital Leadership window of the proposed European Competitiveness Fund (ECF), covering the 2028–2034 programming period. The ECF Digital Leadership window plans to invest €51.5 billion in digital infrastructure, private sector digitalisation, digital skills, and programme support across EU Member States. Using the country-level version of the RHOMOLO spatial dynamic general equilibrium model, we simulate nine scenarios varying the composition of investment, the distribution of funds across Member States, and the pace of disbursement. The simulations suggest a ten-year cumulative GDP impact for the EU as a whole in the range of €95 to €114 billion, equivalent to cumulative GDP multipliers of 1.84 to 2.21. The main source of variation is the balance between direct public infrastructure spending and financial instruments that leverage private digital investment: the latter additionally activates a permanent total factor productivity gain that sustains the GDP impact beyond the disbursement period. The distribution of funds across Member States has little effect on the EU aggregate but matters substantially for individual country outcomes. A spillover decomposition shows that trade and digital spillovers together account for approximately 26% of each country's own-country GDP effect at year 10, with marked heterogeneity driven by bilateral trade integration. A sensitivity analysis on the digital spillover elasticity, varying the parameter from 1% to 5%, raises the EU27 ten-year cumulative multiplier from 1.91 to 2.91, illustrating the importance of this assumption for the aggregate results. The impact on EU exports is positive in most years, following a short-run crowding-out in the first three years of disbursement.