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Road to the new MFF: the overhaul of the Cohesion Policy

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Cohesion Policy: an ever-present concern.


Concerns regarding regional development, territorial cohesion and economic inclusiveness have always accompanied the process of European economic integration since the very first days of the European Communities.


Following the downsizing of the coal and steel industries as a result of the establishment of the European Coal and Steel Community in 1951 a special Fund for the Retraining and Resettlement of Workers was set up to minimize the social impact of such industrial restructuring. This laid the groundwork for what is known today as the European Social Fund (ESF).  In the same vein, in 1975 the European Economic Community established the European Regional Development Fund (ERDF) to “finance the growth of its most backward areas.”


Among the aims listed in Article 2 of the 1957 EEC Treaty, the “harmonious development of economic activities throughout the Community” was singled out as key to raising living standards. Decades later, the same idea is carried forward in Article 174 TFEU, which states that, “in order to promote its overall harmonious development,” the Union shall pursue measures to reinforce its economic, social and territorial cohesion.


Nowadays the EU’s Cohesion Policy is programmed by the European Commission (EC) through the allocation of resources under the EU’s Multi-Annual Financial Framework (MFF), the overarching strategic document drafted by the EC to outline the EU’s revenue and expenditure for a seven-year period.


Within the broader mission conferred to the Cohesion Policy as outlined in the TFEU, projects financed through funds fuelled by the MFF’s allocations must comply with the general Cohesion Policy’s objectives set by the EC for the entire programming period. These objectives are, in turn, aligned to the EC’s strategic priorities pursuant to the European Council’s five-year strategic agenda.

 

Cohesion Policy in the 2021-2027 MFF.


The current 2021-2027 MFF  comprises four distinct funds to address aspects of the EU’s Cohesion Policy: the ERDF, ESF+, the Cohesion Fund (CF), and the brand-new Just-Transition Fund (JTF). The ERDF finances projects that foster social and economic development across EU regions and cities, while ESF+ supports quality jobs and labour-market inclusion.  The CF, devised in the early 1990s, invests in environmental and transport-related national projects in less prosperous Member States (those with GDP per capita below 90% of the EU-27 average). The new JTF helps offset regional disparities arising from the energy and technological transition towards climate neutrality by 2050 under the European Green Deal.


These projects are expected to contribute to the achievement of the five Cohesion Policy’s objectives for the 2021-2027 period, themselves an expression of three of the six EC’s strategic priorities for the 2019-2024 which in turn were defined in accordance to the four-point 2019-2024 strategic agenda drafted by EU’s heads of state and government in 2019.


In particular, projects undertaken through ERDF resources should be focused on creating a more competitive and smarter economic environment by supporting growth and innovation in small and medium enterprises and boosting investments at the local level to create a greener, low-carbon and resilient economy. These policy objectives tap clearly into the EC’s priorities about a greener European economy, fit for the digital age and more geared towards social fairness, which in turn are consistent with the European Council’s agenda advocating a stronger Single Market on which to build a climate-neutral, green, fair and social Europe.


When it comes to questions of governance, Cohesion Policy funds operate according to a “shared management”  approach between the Commission and the Member States, something which distinguishes them from programmes stemming from EU’s exclusive competences. In fact, member states and regional governments are responsible for the day-to-day management of projects approved by the EC within the framework of comprehensive Partnership Agreements, namely a list of national and regional programmes spanning the entire multi-annual programming period to which each member state has to pledge before receiving resources committed by the EC.

 

New challenges, priorities and adjustments to Cohesion Policy.


Since the approval of the regulations governing the functioning of the Cohesion Policy’s funds in July 2021 and the corresponding Partnership Agreements drafted by member states by fall 2022, the European Union has faced a deeply changing context. Many disruptive and groundbreaking events concerning international politics and the world of digital technologies have dramatically reshaped the policy environment. In particular, the Russian invasion of Ukraine, the rise of AI-powered technological breakthroughs and the general growing uncertainty plaguing the EU’s economy have presented member states and EU’s institutions with the urgent need to devise a new comprehensive strategy to fend off current and future threats while boosting the bloc’s competitiveness and resilience.


In June 2024, the European Council adopted a new strategic agenda for the 2024-2029 period. It identifies three priority areas: safeguarding EU’s democratic values and freedoms, strengthening EU security and defence and bolstering the EU’s competitiveness. In turn, the EC’s new set of seven priorities for the same period reflect the European Council's guidance  emphasizing the need to reinforce the competitiveness and attractiveness of the EU economy by supporting key industries, closing innovation gaps, creating skilled jobs, advancing a European Defence Union and upholding the rule of law and citizens’ fundamental rights and liberties.


In this respect, the adjustments applied to the Cohesion Policy through the mandatory mid-term review launched in 2025 by the EC aim to put into practice some of the new priorities. Among other proposed amendments, the review extends access to the ERDF to large enterprises active in critical sectors related to defence and strategic technologies. It also allows national and regional governments, especially those of vulnerable Eastern border regions, to redirect cohesion resources toward dual-use infrastructure projects that improve military mobility and toward energy interconnectors that enhance the integration of neighbouring countries’ electricity systems.

 

The 2028-2034 MFF: Cohesion Policy for a stronger Europe


On July 16 2025 the president of the EC, Ursula von der Leyen, announced the proposal for the new MFF covering the seven-year period between 2028 and 2034. Compared with its predecessor, the new MFF draft nearly doubles its overall financial weight reaching almost €2 trillion, thus amounting to 1,26% of EU-27’s expected GNI over the same period. The doubling of the multi-annual budget plan is justified by the incorporation of the new strategic priorities laid out in 2024 and by the ambition to consolidate the EU’s independence, prosperity and security in the coming decade.


In this context, the Cohesion Policy occupies a central place  and will undergo significant financial and organisational restructuring to expand the available budget for investments, increase flexibility in funds allocation and increase spending efficiency. It will be fuelled by a more than doubled multi-annual budget, accounting for almost half of total MFF allocations, amounting to €865 billion. A major innovation  compared with the current MFF, is the planned merger of resources from the Common Agricultural Policy (CAP) with those of the cohesion funds, effectively eliminating any formal distinction among them to create a single huge investment facility.

Another major novelty concerns the framework to plan and allocate resources to national and regional governments, which replaces the current Partnership Agreements with new National and Regional Partnership Plans(NRPPs). According to the President of the EC, this shift aims to reduce redundancies and overlapping spending caused by funds with differing timelines and objectives by joining all resources under one roof. In fact, this would maximize the effectiveness of investments aimed at fostering economic convergence, supporting a resilient, competitive and sustainable agriculture, promoting people’s opportunities and social inclusion and bolstering security and defence of common borders.


The design of NRPPs, given their broader scope compared with the Partnership Agreements, will remain based on the principle of shared management. They will also ensure that funded investments are always tailored to the specific local needs and opportunities, avoiding a “one-fits-all” approach. Furthermore, the NRPPs will include additional safeguards for the protection of rights and liberties guaranteed under EU’s Charter of Fundamental Rights by strengthening the conditionality mechanism governing the disbursement of all EU funding.

Despite these assurances and the stated rationale behind  them  the new projected overhaul of Cohesion Policy within the 2028-2034 MFF has sparked widespread discontent among regional and local authorities across the EU. In October 2025, these authorities, under the banner of a newly founded “Cohesion Alliance”, and with the support of the European Committee of the Regions (CoR), urged the European Parliament and national governments to revise the Commission’s proposal.


In particular, the elected representatives of several regions, cities and municipalities have warned that the bundling of resources previously devoted exclusively to support economic, social and territorial cohesion with other facilities catering different goals and audiences related mainly to agriculture and defence could  trigger competition for allocations between local governments and other groups including farmers, fishermen, law-enforcement and armed forces. These worries have been echoed by Kata Tüttő, president of the CoR, who stated that “merging cohesion and agriculture funds in a single nationalised envelope without clear allocation criteria puts farmers in competition with local communities and disconnects the EU from its regions and cities”.


On the other hand, the European Commission Executive Vice-President for Cohesion and Reforms, Raffaele Fitto, responded questions from members of the CoR and of the European Parliament, by reaffirming the importance of the place-based and shared management approach which has characterised Cohesion Policy spending during the current MFF. He also showed openness to implement amendments to the EC’s draft proposal throughout the legislative process leading to the adoption of the 2028-2034 MFF.

 

Cohesion Policy: the path ahead


All of that being said, Cohesion Policy is undergoing a profound transformation, reflecting the increasing amount of challenges the EU faces both within and beyond its borders. Many of these challenges can be addressed by strengthening productive capacities and infrastructure at the local level, defence, energy and transport networks, economic competitiveness, and resilient food supply.


From this perspective, the traditional goal of Cohesion Policy, namely promoting the harmonious development of all parts of the European Single Market and preventing the exacerbation of structural disparities between “winners” and “losers” of economic integration, remains closely tied to the broader European ambition of achieving shared prosperity and improving living standards of all its citizens.


Even with future adjustments to the rules and management frameworks of individual funds, the central point remains that European public spending will continue to grow in importance as a driver of structural reform and investment across member states. Only through common financial strength will the Union be able to deliver the scale of investment required to meet the systemic challenges looming at the horizon.

 

 

Bibliography

 

·       Treaty establishing the European Economic Community: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A11957E%2FTXT.

·       Treaty on the Functioning of the European Union: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A12016ME%2FTXT.

·        Origins of the European Social Fund (the Retraining and Resettlement of Workers): https://ec.europa.eu/employment_social/esf/docs/50th_anniversary_book_en.pdf.

·        Cohesion Policy in the 2021-2027 MFF: https://ec.europa.eu/regional_policy/policy/what/investment-policy_en.

·        Cohesion Policy’s objectives for 2021-2027: https://ec.europa.eu/regional_policy/policy/how/priorities_en.

·        European Council strategic agenda 2019-2024: https://www.consilium.europa.eu/en/eu-strategic-agenda-2019-2024/.

·        European Council strategic agenda 2024-2029: https://www.consilium.europa.eu/en/european-council/strategic-agenda-2024-2029/.

·        European Commission’s priorities for 2019-2024: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024_en.

·        The programming and implementation of Cohesion Policy: https://ec.europa.eu/regional_policy/policy/how/programming-and-implementation_en.

·        Cohesion Policy in the 2028-2034 MFF: https://ec.europa.eu/regional_policy/policy/how/future-cohesion-policy_en.

·        Quote of Kata Tüttő, president of the European Committee of Regions: https://cor.europa.eu/en/news/future-eu-budget-regions-and-cities-urge-european-institutions-revise-proposal.

·        Declaration by European Commission Executive Vice-President for Cohesion and Reforms Raffaele Fitto concerning the new NRPP proposal: https://cor.europa.eu/en/news/meps-and-regional-leaders-urge-changes-governance-model-merging-cohesion-and-agriculture.

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