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The new EU budget is starting to take shape. Cohesion funds could flow into a single National Plan, and the disbursement of funding could be tied to the implementation of specific reforms
The European Union's cohesion policy could soon undergo a paradigm shift, destined to modify its structure and the programming and distribution of its funding. According to the first rumours about the next Multiannual Financial Framework - that is, the EU budget for the seven-year period 2028-2034 - the European Commission would in fact be increasingly intent on managing cohesion funds, which currently make up about a third of the overall Union budget, based on a scheme inspired by the Recovery and Resilience Facility (RRF) that governs the various national plans. A single national plan for each member country, EU funding linked to the implementation of specific reforms, payments upon the achievement of agreed objectives, and greater centralisation of the entire financial structure.
In the current seven-year budget, cohesion policy mobilises 392 billion Euros, divided between 398 different programmes at national, regional or transnational level. Funding is provided through four funds: the European Regional Development Fund (ERDF), the Cohesion Fund, the European Social Fund Plus (EFS+) and the Just Transition Fund (JTF). Halfway through the seven-year period of the Multiannual Financial Framework in force, EU institutions are called upon to define the framework and the general allocation of common resources in the following financing period, namely the seven-year period 2028-2034. This is where the hypotheses on possible reforms of cohesion policy come in.
Fewer programmes and more constraints
According to a draft of the European Commission working documents seen by OBCT, the first pillar of the future budget that the Commission will have to outline by the first half of 2025 focuses precisely on the definition of a single plan for each Member State. While the 398 cohesion policy programmes are currently managed by a variety of national and regional actors, in the future cohesion funds could converge into just twenty-seven national plans, each divided into several national or regional chapters: among the possible thematic chapters the document lists, for example, "transport", "social", "energy", "agriculture", "security and migration". Each chapter should include a series of investments supported by EU funds, but also the reforms that should necessarily accompany them (such as the acceleration of authorisations for the installation of new renewable energy plants).
This is essentially a matter of replicating the model developed for the National Recovery and Resilience Plans (NRRP) established in response to the crisis triggered by the Covid-19 pandemic. According to the Commission, developing a single document for all cohesion policies relating to each State would lead to "a simpler legal framework, leaner negotiations, less bureaucracy".
Similarly, the new von der Leyen Commission would like to continue with the NRRP model also with regard to the performance- and results-based funding disbursement mechanism: payments would be gradually released upon achievement of agreed policy objectives, unlike what happens with the cohesion policy currently in force. The hoped-for inclusion of "strong conditionalities" for the "protection of the financial interests and values of the EU and the rule of law" would mean that, in the event of failure to comply with EU reforms and standards, the country in question could have its cohesion funds frozen.
The risk of centralisation
These changes would allow the European Commission to drastically reduce the number of its interlocutors, and to keep the member states under closer control during the implementation phase of the various projects. Within the individual states, however, the reform would also entail strong centralisation: the design of single national programmes would essentially be in the hands of the capitals, to the detriment of the involvement of local and regional actors. This would abandon a historical peculiarity of cohesion policy, namely its decentralised nature and attention to individual territories.
This hypothesis is being criticised by representatives of local authorities in Brussels, from the Committee of the Regions to the European Economic and Social Committee. It is no coincidence that the new European Commissioner for Budget, Polish Piotr Serafin, speaking about the future of cohesion policy during his confirmation hearing at the European Parliament, covered his tracks and observed that "we must not reproduce the Recovery and Resilience Facility in its current form".
Next steps
The topic is becoming increasingly hot, since internal work within the European Commission is intensifying to lead to the presentation of its final proposal on the new Multiannual Financial Framework and the individual financial instruments linked to it. That proposal will then have to be negotiated by the co-legislators of the European Parliament and the Council of the EU through a special procedure – that is, the consent of the majority of MEPs and the unanimous approval of the twenty-seven governments will be needed.
The search for unanimity in the Council will be one of the most complex steps in all the negotiations. While the so-called frugal countries (in particular the Netherlands) have long been pushing for greater preventive control over the way in which common funds are spent – including those of cohesion policy, other Member States (Hungary above all) could oppose the introduction of a model that ties the disbursement of EU funding to the adoption of specific reforms and respect for the rule of law.
This material is published in the context of the project "Cohesion4Climate" co-funded by the European Union. The EU is in no way responsible for the information or views expressed within the framework of the project; the sole responsibility for the content lies with OBCT.
