Good afternoon, everyone. Thank you for joining us today and for your attention.

I am pleased to announce that the College has today approved the Commissions new initiative to modernize the Cohesion policy.

Cohesion policy is crucial within European policy, representing one-third of the EU budget. Its goal is to reduce disparities among European regions and promote balanced development.

The first principle of Cohesion Policy is shared management, and this proposal is developed in line with this principle after much consultation.

At the start of this mandate, I held consultations with all Member States and stakeholders involved in the implementation of cohesion policy.

I sent a letter to the Ministers of Cohesion for discussions. Then I met all European ministers responsible for Cohesion Policy.

I visited 8 Member States and met with prime ministers, ministers, but most importantly, with mayors and presidents of regions.

Being on the ground is crucial to understand the different needs of European regions. Its clear that Cohesion Policy will continue to provide solutions tailored to local needs.

For example, during my visit to Greece, I met with mayors of islands. In Finland, I visited Lappeenranta and met with representatives of the eastern border regions. These areas have different challenges and require different actions.

I also met with the European Parliament, the REGI Committee, attended the plenary session of the Committee of the Regions, and the Council of the EU on cohesion. We discussed the future of cohesion policy, especially in the context of the next MFF debate.

The current Cohesion policy programs were discussed between 2019 and 2021 and signed in 2022. Implementation has now begun. Since then, the world has significantly changed. Member States, regions, and territories now face new and intensified challenges.

Traditional challenges like housing and water management have intensified, and new challenges such as competitiveness, defense, security, and resilience have emerged.

We propose targeted changes to the European Regional Development Fund and Cohesion Fund regulations.

These changes provide Member States and regions with increased possibilities to direct funding to new emerging priorities now. Timing is crucial.

• Member States and regions wishing to take this opportunity must submit their program amendments within two months of the revised legislation coming into force.
• The Commission will assess the proposals and collaborate 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.

We highlight five priorities in our proposals:

Competitiveness: We offer the possibility for increased investments in strategic technologies.

Defense: We propose that Member States and regions can use Cohesion funding to support certain defense actions. This can include support for companies in the defense sector or critical infrastructure protection. Specific incentives are provided for eastern border regions, which face the dual challenge of increased security and economic relaunch.

Affordable Housing: We aim to address the housing investment gap and double the Cohesion Policy funding for affordable housing as outlined in the Presidents Political Guidelines. In all my meetings with mayors and ministers, housing is a priority, and its important to push in this direction. 75% of people live in cities, causing overpopulation, while rural areas face the opposite challenge of 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, particularly 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 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 programs 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 programs and complete the new investments, we propose extending the eligibility date by one year, to 2030, only for those programs that allocate at least 15% of their funds to the five strategic priorities.

The Regulation is accompanied by a Communication that clearly explains the purpose of this work, the actions we are taking, and the road map for the future.

The Communication explains the principles of cohesion policy, which we all respect. We are working to modernize it, we are modernizing the method, and adding simplification.

In the coming months, we will work on specific areas, such as the Urban agenda, to support cities, and on the outermost regions.

Finally, I want to clarify an important point, to prevent misunderstandings after reading many inappropriate and incorrect reports about the communication.

With this regulation, the Commission is giving Member States and regions the opportunity to adapt their current programs to invest in priority areas according to the needs of their territories. That is what we are doing. It is on a voluntary basis, and it is up to Member States and regions to decide if they want to take this opportunity. The resources of cohesion remain at the disposal of Member States and regions.