EU to Adopt New Cohesion Priorities With €16.1bn Pre-Financing

The European Parliament reported on June 25 that its Committee has agreed on updates to the EU’s cohesion policy. In a Regional Development Committee vote, 26 Members of the Parliament supported the planned changes. 10 members opposed the proposal, and 5 abstained. The revisions are for the current 2021–2027 budget period and aim to revise some priorities. The overall structure of the cohesion policy remains unchanged, yet certain new priorities have been suggested. New priorities include housing, energy markets, and regional resilience, particularly near EU external borders. The European Commission has advanced the proposal in reaction to recent social and geopolitical challenges. With this position adopted, formal negotiations with the Council may now move forward in July.

Updates to the EU’s Cohesion Policy Priorities

Several new sectors may become eligible for funding under the revised EU cohesion guidelines. Defence industrial capacity, military mobility, and water resilience are among the suggested additions. Projects in decarbonisation and affordable housing may also receive financial support through the updated rules. Regions near Russia, Belarus, and Ukraine could receive special attention under the proposal. Support for the Strategic Technologies for Europe Platform (STEP) is also part of the plan. The update does not bring in new money but reallocates existing resources earlier than planned. A total of €16.1 billion is projected for pre-financing to be used by 2026.

Financial Flexibility Proposed to Support Faster and Targeted Investments

The Committee has proposed several financial flexibility tools to support these changes. Member states may access 100% co-financing and a 30% pre-financing rate for targeted investments. They could also qualify for a 9.5% fund payout if 15% of the funds are redirected. MEPs suggest lowering this threshold to 10% to allow easier access to incentives. These financial mechanisms aim to help countries react more efficiently to emerging needs. The tools allow funding use to shift without departing from the main cohesion goals. This structure ensures quicker responses while maintaining long-term regional development objectives.

Dual-Use Sustainable Infrastructure and Support for Less Developed Regions

Improvements in European infrastructure also play a key role in the updated proposal. The Committee recommends support for dual-use projects serving both civilian and military functions. New definitions in the water sector now include irrigation and desalination systems. In housing, the focus shifts to sustainable construction and renovation efforts. Critical energy systems and civil emergency facilities may also receive targeted support. These changes are part of efforts to strengthen European infrastructure through existing cohesion funding. They aim to improve both regional stability and emergency preparedness across the EU.

To maintain fairness, certain limits have been added to the new funding priorities. Defence and decarbonisation funding should focus on less developed or transition regions. Larger businesses may only receive support if they hire local workers from the region. Local and regional authorities must approve any redirection of development funds. This measure ensures that decisions reflect regional needs and maintain transparency. The updates attempt to avoid increasing inequality between more and less developed EU areas. These conditions help preserve the original goals of the EU’s cohesion policy.

Negotiations with the Council Authorized, Awaiting Plenary Session Confirmation

Projects under investigation for violating EU laws or values will be excluded from the funding flexibilities. MEPs approved starting talks with the Council, with 31 votes in favour. These negotiations will be confirmed during the European Parliament’s July plenary session. Talks will proceed if members don’t raise formal objections during that session. The negotiations aim to finalize updates before the funding cycle progresses further.