Modernising the cohesion policy to meet current challenges

Cohesion policy is the EU’s main investment policy. It plays a key role in reducing disparities between EU regions to promote economic, social, and territorial cohesion, and making the EU more competitive, sustainable, and equitable.

Under its mid-term review of the cohesion policy, the European Commission is proposing amendments to existing laws and inviting EU countries to adjust their cohesion programmes to invest in the EU’s strategic priorities. The priorities reflect the EU’s most pressing challenges and include improving EU competitiveness, defence, security and support for Eastern border regions as well as affordable housing, water resilience, and energy transition.

Specifically, it is proposing to

• strengthen Europe’s competitiveness and close the innovation gap by offering large enterprises support from the European Regional Development Fund in critical areas, such as defence, strategic technologies, and decarbonisation
• back the defence industry and support Eastern border regions by further enabling EU countries to use current cohesion funding to build resilient infrastructure to facilitate military mobility. It will also support productive capacities of small and large enterprises in the defence sector across all EU regions.
• increase affordable housing by helping EU countries to address the housing investment gap, by doubling the amount of cohesion policy funding dedicated to affordable housing
• enhance water resilience by encouraging EU countries to invest more in water resilience, including in digitisation of water infrastructure and reducing the impact of droughts and desertification
• support the energy transition by promoting energy interconnectors (land and subsea cables that connect the electricity systems of neighbouring countries) and setting up recharging infrastructure

As a financial incentive to invest in strategic priorities, EU countries and regions will be able to frontload funds in 2026 benefiting from up to 30% of prefinancing for projects developed under the strategic priorities.

The Commission is looking to conclude the cohesion reprogramming exercise with EU countries and regions in 2025, so that the new programmes can start to be implemented in early 2026.

More information: European Commission