The ERC is part of the European Union's massive €54.6bn Seventh Framework programme, which is designed to boost Europe's competitiveness and increase economic growth. Although the bulk of the money will be spent on large multinational projects in areas such as nanotechnology, IT and energy, this is the first time that Framework cash is being given directly to individual scientists working alone or in small teams.

Based in Brussels, the ERC will provide "starting grants" for postdocs and other young scientists who want to set up their own research groups. These will be worth up to €2m over five years. The ERC is also offering "advanced grants" to established researchers of any age, worth up to €2.5m over five years.

Grants will be awarded in all areas of science and selected on the basis of peer review, with scientific excellence being the sole criterion for selection. Scientists from any country can apply for the money provided that they carry out the research at a university or institute in Europe. They will be able to start applying for money from 19 March this year, with the deadline for the first call for proposals being 25 April.

Today's launch conference is being attended by some 300 scientists from some 30 countries and hosted by the German Research Council. Apart from Merkel, other dignitaries in Berlin include Europe Union research commissioner Janez Potočnik, the British government's chief scientific adviser David King, and CERN boss Robert Aymar.