Today, the European Commission is revising the EU's cohesion policy to better support EU competitiveness and decarbonisation, defence and security, the Eastern border regions as well as affordable housing, water resilience, and the energy transition.
The objective of this initiative is to make cohesion policy more effective, by encouraging Member States and regions to invest in the European strategic priorities, while maintaining the focus of cohesion policy on reducing economic, social and territorial disparities. Member States will be invited to reprogramme part of their 2021-2027 cohesion funds to new investments in the context of the ongoing cohesion policy's mid-term review.
Strengthening Europe's competitiveness and closing the innovation gap
Given the role of businesses, regardless of their size, in steering research, innovation, knowledge and technology transfer, the Commission is proposing to extend the support of the European Regional Development Fund to large companies in critical areas, such as defence, strategic technologies, and decarbonisation. In addition, the Commission encourages Member States to increase investments in strategic technologies under the Strategic Technologies for Europe Platform , to boost Europe's competitiveness and innovation.
Backing the defence industry and supporting Eastern border regions
Today's proposal will further enable Member States to use current cohesion funding to build resilient infrastructure to foster military mobility. It will also support productive capacities of small and large enterprises in the defence sector across all EU regions.
Moreover, cohesion programmes in the Eastern border regions, disproportionately affected by the Russian war of aggression against Ukraine, will benefit from a preferential prefinancing level, if they move at least 15% of their overall funds to the new strategic priorities.
More affordable housing
The Commission proposes, in line with the President's political guidelines , to double the amount of cohesion policy funding dedicated to affordable housing. Member States will also be able to leverage private and public financing by using a new financial instrument set up jointly with the European Investment Bank (EIB). The instrument will combine cohesion funding with the resources of the EIB and of other international financial institutions as well as national promotional and commercial banks.
Enhancing water resilience
Member States will be able to increase investments in water resilience, including in digitisation of water infrastructure, mitigation of drought and desertification impacts.
Supporting the energy transition
Cohesion funding will support investments to promote energy interconnectors and related transmission systems, as well as the deployment of recharging infrastructure. This will be crucial to accelerate the energy transition and promote clean mobility. The proposal will also make it easier to fund decarbonisation measures.
Financial incentives under the strategic priorities
While all cohesion projects developed under the EU strategic priorities will be entitled to up to 30% of prefinancing, cohesion programmes, which will move at least 15% of their overall funds to these priorities, will enjoy an even higher level of advanced payment.
In addition, the EU funding for investments in strategic priorities will cover up to 100% of the costs in all regions.
Next steps
Today's amendments of the cohesion policy legislations, proposed in the context of the 2025 mid-term review, will be discussed by the European Parliament and the Council.
The Commission's objective is to conclude the reprogramming exercise of the mid-term review with Member States and regions in 2025, so that the new programmes can start being implemented in early 2026.
Background
With a budget of €392 billion in the current programming period 2021-2027, cohesion policy is the EU's main investment policy. In line with the legal rules, the current mid-term review allows Member States to assess the implementation of their cohesion programmes and adjust them to the new political priorities in 2025.
