The EU Parliament and Council agreed key updates to EU cohesion policy, enabling Europe’s states and regions to reallocate funds towards new strategic priorities, such as defence, sustainable housing, water resilience, and energy transition.
The EU’s Cohesion Policy reduces economic, social, and territorial disparities between regions to foster growth and ‘create a more equitable, competitive, and sustainable European Union’. EU funding is redirected to less developed regions to help them ‘catch up’, supporting jobs, businesses, social inclusion, and sustainable development, including recent priorities like affordable housing, water resilience, and energy transition.
EU Member States and regions looking to invest in these new priorities will benefit from higher prefinancing rates – up to 20% – to help accelerate the launch and implementation of projects. Moreover, these prefinancing rates will further increase for the programmes which will reallocate at least 10% of their total value to the new priorities.
Reprogrammed funds will also benefit from higher EU co-financing rates – 10 percentage points above the applicable rates – thus reducing the necessary top-up coming from national budgets. Finally, even more favourable conditions are foreseen for EU regions bordering Russia and Belarus adversely impacted by Russia’s war of aggression against Ukraine.
“The EU must be better prepared for tomorrow’s challenges,” said Denmark’s Minister for European affairs Marie Bjerre, for the EU presidency: “The legislation adopted today will enable member states to spend EU cohesion funds on defence, security, and civil preparedness to better address current and future challenges. This is an important step towards a European Union that takes responsibility for its own security.”
The changes were proposed in April by the Commission following consultations with Member States. As soon as they are published in the Official Journal of the European Commission, Member States and regions will be able to make use of the new flexibilities by submitting to the Commission amendments to their Cohesion programmes.
‘A modernised Cohesion policy: The mid-term review’, Commission communication, 1 April 2025
