Good afternoon, everyone. Thank you for joining us today and for your attention.
I am delighted to announce that the College has approved today the Commission's new initiative to modernise the Cohesion policy.
As you know, Cohesion policy is at the heart of European policy, representing one-third of the EU budget. Its fundamental mission is to reduce disparities among European regions and promote balanced development.
The first principle of Cohesion Policy is shared management, and in full respect of this principle, this proposal comes after a lot of meetings and exchanges.
At the beginning of this mandate, I started a consultation with all Member State and stakeholders involved in the implementation of cohesion policy.
I sent a letter to the Ministers of Cohesion to meet with them. Then I met all European ministers responsible for Cohesion Policy.
I visited 8 Members States, and in my visits, I met with Prime Ministers, Ministers, but also and overall, with Mayors, president of Regions.
Being on the ground is crucial to understand the different needs of the European regions. Going around Europe it is clear that Cohesion Policy will continue to provide tailored solutions adapted to local needs, ensuring responses that address specific regional strengths and requirements.
For example, in my visit to Greece, I met with Mayors of Islands. When I visited Finland, I have been in Lappeenranta, meeting with representatives of eastern borders regions. These are two very different territories that have different challenges and need different actions.
I also met with the European Parliament, the REGI Committee, I have been at the Plenary session of the Committee of the Regions and also with the Council of the EU on cohesion. Here we discussed the future of cohesion policy, overall in the framework of the next MFF debate.
The current Cohesion policy programmes were discussed between 2019 and 2021 and signed in 2022. And the implementation is basically starting now. Since then, the world has changed significantly. Member States, regions, and territories now face new and intensified challenges.
Traditional challenges, such as housing and water management, have intensified, and new challenges, including competitiveness, defence, security, and resilience, have emerged.
We are proposing targeted changes to the European Regional Development Fund and the Cohesion Fund Regulations.
These changes offer increased possibilities to Member States and regions to direct funding to the new emerging priorities now. Timing is a crucial point.
- Member States and regions that want to use this opportunity must submit their program amendments within two months of the entry into force of the revised legislation.
- The Commission will assess and engage with authorities to adopt the revised programs within two months of submission.
The reprogramming process is expected to be completed by the end of 2025, allowing for updated program implementation from 2026 onwards.
We highlight in our proposals five priorities:
Competitiveness: We offer the possibility for increased investments in strategic technologies.
Defence: We propose that Member States and regions can use Cohesion funding to support certain defence actions. For example, this can include support to companies in the defence sector or critical infrastructure protection. Specific incentives are also provided to Eastern borders regions, which face the dual challenge of increasing security and relaunching their economies.
Affordable Housing: We aim to tackle the housing investment gap and double Cohesion Policy funding for affordable housing as per the President's Political Guidelines. In all my meetings with Mayors and Ministers, housing is a priority and it is important to push in this direction. 75% people live in cities, creating a problem of overpopulation, while rural areas suffers the opposite challenge, the depopulation.
Water Resilience: We have seen regions facing water scarcity while others are affected by floods. We propose changes to encourage investments in water resilience, including digitization of water infrastructure and mitigation of drought and desertification impacts.
Energy Transition: The proposals support an increased focus on the energy transition, in particular for energy interconnectors and recharging infrastructure.
To achieve these goals, we will provide incentives and remove barriers that prevent efficient and timely fund utilization.
First, increased pre-financing and co-financing:
- Investments in each of the five strategic priorities highlighted before will benefit from 30% pre-financing rates.
- Investments in these priority areas will also be eligible for an EU co-financing rate of up to 100%.
- Cohesion programmes that allocate at least 15% of their funds to the five strategic priorities will benefit from pre-financing of 5% (compared to the current level of 0.5%).
- For Eastern border regions, this pre-financing will be 10%, with an EU co-financing rate of up to 100%.
Second, more flexibility in allocating and implementing EU Cohesion funds:
- In all my meetings with stakeholders, there is a wide call for more simplification and flexibility.
- We are already taking first steps in this direction with this proposal.
- We are for example simplifying the use of the Just Transition Fund.
- And to ensure that implementing authorities have time to amend their programmes and complete the new investments, we are proposing to extend the date for eligibility by one year, to 2030, only for those programmes which allocate at least 15% of their funds to the five strategic priorities.
The Regulation is accompanied by a Communication which explain very clearly what the purpose of this work is, the actions we are taking, as well as the road map for the future.
The Communication explains the principles of cohesion policy, that we all respect. We are working to modernize it, we are modernising the method, and adding simplification.
In the coming months we will work on specific areas, like the Urban agenda, to support cities, and on the outermost regions.
In the end I want to clarify an important point, just to be clear after having read many inappropriate and wrong news about the communication.
With this regulation, the Commission is giving Member States and regions the opportunity of the Mid Term Review to adapt their current programmes to invest in priority areas according to the needs of their territories. That is what we are doing. It is on voluntary basis and up to Member States and regions to decide if they want to take this opportunity. The resources of the cohesion remains at the disposal of Member States and regions.
