Achievement of the full set of EU objectives in the long run requires basic and critical research in the social sciences and the humanities. A European Research Council (ERC) may offer economies of scale, the alleviation of coordination problems, and the provision of public goods or ‘club goods’ to the social sciences and humanities. It should focus on data sharing and large comparative projects; raising public awareness of the value of the social sciences and humanities, and funding basic and critical research in these disciplines – not just research offering immediate-term extrinsic pay-offs. In order to function properly, such a body should develop standards of assessment and peer review processes that are appropriate for research in the social sciences and humanities. An ERC must receive ‘fresh money’; it must minimise transaction costs – both to attract good applicants and to fund as many of them as possible – and, by giving priority to academic excellence over Lisbon relevance and geography, it must maximise its credibility as a supporter of high-quality research. At a time when competition is supposed to foster excellence in research, academies and private funding bodies must continue to be competitors of the European Research Council.