Cohesion: responding to new challenges, but focus still needed on regional inequalities 

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• Funding can be channelled to new priorities such as defence industrial capacity, military mobility, affordable housing and water resilience 
• Dual-use investments prioritised 
• Decarbonisation, competitiveness and energy interconnectors also included 
• Reducing inequalities between regions should be continued 

The Regional Development Committee adopted its position on proposals to introduce new priorities and flexibilities to the current EU cohesion funding cycle.

MEPs from the Regional Development Committee broadly endorse, in a report adopted on Wednesday with 26 votes in favour, 10 against, and 5 abstentions, a Commission proposal to adapt the EU’s cohesion policy priorities in the period 2021–2027 while introducing some targeted changes to ensure that the main cohesion policy principles remain in place.

New priorities and flexibilities

MEPs backed the proposed introduction of new objectives that would be eligible for cohesion funds, namely defence industrial capabilities and military mobility, water resilience, affordable housing, decarbonisation, and energy infrastructure. They also agreed to channel some of the funds into EU competitiveness, particularly to the Strategic Technologies for Europe Platform (STEP), and to extra support for EU regions bordering Russia, Belarus and Ukraine.

MEPs also supported more favourable funding conditions, including the possibility of 100% co-financing, 30% pre-financing and a further pay-off of 9.5% of the total funding for reallocations to the new priorities in 2026 if at least 15% of funds are reallocated to them. MEPs propose lowering this threshold to 10%.

MEPs call for preparedness investments

In their amendments, MEPs want to prioritise dual-use infrastructure (suitable for civilian and military use) when funding the defence industry and military mobility. On water management, they want to broaden the scope of support to include integrated water management (for example, irrigation and desalination). MEPs also want to make housing sustainability a priority, and allow funds to go to the protection of critical energy infrastructure and civil preparedness infrastructure.

To ensure cohesion policy’s focus on reducing inter-regional inequalities is maintained, MEPs want to update the rules such that only less developed and transition regions can access the new funding for defence and decarbonisation. They also changed a provision that would allow support to go to larger companies to specify that this can only happen when the companies commit to local employment. MEPs added a measure ensuring the consent of local and regional authorities is still needed for the transferring of already-planned territorial development funds to other purposes.

MEPs emphasise that the new flexibilities cannot be applied to cohesion funding frozen under the EU’s conditionality regulation for violations of EU values or the rule of law.

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After the vote, rapporteur and Committee Chair Dragoș Benea (S&D, Romania) said: “Parliament is stepping up to deliver concrete answers to citizens living in border regions, to families struggling to find affordable housing, and to communities facing the challenges of the green transition. By adapting the rules of cohesion policy to today’s emerging priorities, without undermining the core mission of territorial solidarity, we reaffirm our commitment to ensuring no region and no European citizen is left behind.”

Next steps

Negotiations with the Council were authorised with 31 in favour, 9 against, and 1 abstention. They will be announced during Parliament’s July 7-11 plenary session, and if there are no objections, they can proceed.

Background

The Commission’s proposal would amend the European Regional Development Fund, Cohesion Fund and Just Transition Fund. The Commission estimates that it will lead to €16.1bn in additional pre-financing paid out in 2026. The proposal does not introduce new resources, so these funds are front-loaded from subsequent years.

In parallel, the Employment and Social Affairs Committee is discussing similar proposals in the context of the European Social Fund +.