The European Union will spend €1 billion (US$1.3 billion) on digital services and improving high-speed broadband networks as part of a deal agreed on Wednesday.
The total is a big comedown from the €9.2 billion that was first proposed, but cut by E.U. leaders a year ago.
The European Parliament on Wednesday voted in favor of the reduced funding for the Connecting Europe Facility without further haggling.
With the reduced funds, the program will only be able to provide seed funding for a limited number of broadband projects. Only 15 percent of the budget has been earmarked to support broadband, and one third of those must aim for speeds of 100 Mb per second or above.
Other digital projects that apply for funding will need to "demonstrate state-of-the-art technological solutions and represent either innovative business models or highly replicable solutions."
Priority will be given to so-called 'building-block' services such as e-identification, e-signature, e-invoicing and automated translation, explained Digital Agenda Commissioner Neelie Kroes.
The European Commission will award the grants after proposals have been evaluated by external experts. A strict "use it or lose it" policy will see money withdrawn from projects that are not completed within their specified time frame.