What is the objective of the proposed changes to cohesion policy?
In the 2025 mandatory mid-term review of the 2021-2027 cohesion programmes, the Commission proposes amendments to two fund-specific regulations (the European Regional Development Fund (ERDF) and the Just Transition Fund) to allow member states and regions to align their funding plans with the EU strategic priorities.
These amendments will facilitate EU budget investments to boost competitiveness, decarbonisation, defense, affordable housing, water resilience, and energy transition in all EU regions. Additionally, eastern regions bordering Russia, Belarus, and Ukraine, facing specific economic and security challenges, will receive special support.
Is it mandatory for Member States to redirect their cohesion funds to EU strategic priorities?
No, it is voluntary. During the mid-term review, Member States and regions must assess their 2021-2027 cohesion policy programmes and adjust them to new objectives. By offering better financing conditions and more flexibility, the proposed legislative changes will encourage Member States to focus on EU strategic priorities. This way, the EU cohesion budget can now contribute to reinforcing the EUs security and resilience in the current global and economic context.
Why is the Commission using cohesion policys mid-term review to address EU strategic priorities?
The regulations governing the 2021-2027 cohesion policy funds and programmes were adopted in 2021-2022, before a series of major geopolitical and economic events, such as the Russian war of aggression against Ukraine, the energy crisis, and ongoing changes in global trade. These events have reshaped the EUs strategic political priorities.
The mid-term review of cohesion programmes is an opportunity for Member States and regions to adjust their programmes, based on progress achieved so far and new challenges identified.
Have Member States and regions been consulted on the proposed changes?
Yes, since the beginning of the mandate, the Commission has engaged extensively with Member States, regions, and local authorities. The outcome of the consultation was clear: the 2025 mid-term review should be used to integrate the priorities set out by the Presidents 2024-2029 political guidelines as well as the new emerging priorities.
What is proposed to boost competitiveness?
To enhance Europes competitive edge and close the innovation gap, the Commission proposes measures to increase investments in strategic technologies, particularly those contributing to the Strategic Technologies for Europe Platform (STEP) objectives. The proposal extends the scope of cohesion support under STEP to all enterprises, regardless of size and with no limitation in terms of amount to be reprogrammed towards STEP priorities.
To incentivize uptake, the resources reprogrammed for these specific objectives will benefit from an additional one-off pre-financing of 30% in 2026 and the possibility of up to 100% EU financing.
Additionally, the proposal extends support to industrial decarbonisation of production processes and products for all enterprises, for instance, in the automotive industry.
The Commission also proposes to enlarge the scope of support from the ERDF to include the decarbonisation of Emissions Trading System (ETS) installations, such as coke ovens and metal ore processing, and to reduce administrative checks for similar support under the Just Transition Fund. This will facilitate support for the transition of energy-intensive industries.