Cohesion policy has been  described as the ‘glue that holds Europe together’ and as ‘the most important stabilising tool of the EU’. It is widely recognised that by contributing to the creation of a level playing field within the Single Market, cohesion policy reinforces the core principles of solidarity and unity in the EU. Accounting for one third of the EU budget, EU cohesion policy aims to reduce disparities and inequalities in economic, social and territorial terms across EU regions. The Cohesion Fund also invests in environment, social inclusion, infrastructure and transport projects in poorer regions of fifteen Member States to assist them in ‘levelling up’, in order to build a more harmonious and cohesive union. However, challenges such as demographic shifts, rifts between large metropolitan areas and other regions, and the persistence of ‘development traps’ in some of the least developed regions signal a need to reflect on how cohesion policy can be reimagined and improved in the post-2027 Multi-Annual Financial Framework (MFF). 

The discussions on reform of cohesion policy and repurposing of cohesion policy funds are taking place in a fraught geopolitical environment in which the European Commission and many Member States want to respond quickly and decisively to new defence realities. This has transformed the debate on the future of cohesion policy, to focus not only on post-2027 cohesion policy, but also on the immediate repurposing of cohesion policy funds through its mid-term review mechanism.  Cohesion policy now faces the prospect of both longer-term revisions and immediate-term adjustments, with many voices urging differing priorities.

Reshaping Cohesion Policy: Mid-Term Review and Emerging Defence Priorities

While the European Commission’s Communication on ‘The Road to the Next Multiannual Financial Framework’ in February 2025 proposed future amendments to cohesion policy, such as simplification and a focus on performance-based metrics, the sudden pivot towards prioritising defence in the EU over the past two months has sharpened the debate on cohesion policy and cohesion funding. The Commission’s March 2025 White Paper on European Defence Readiness 2030 identified cohesion policy funds as a pool of funds from which national governments could immediately reallocate funds within existing programmes towards defence capabilities.

The Commission published further revisions to cohesion policy on 1 April 2025, announcing that cohesion programmes developed under the EU strategic priorities that include backing the defence industry and supporting Eastern border regions – as well as affordable housing, water resilience, and the energy transition – will be entitled to 30% of prefinancing. Executive Vice-President Fitto agrees that cohesion policy funds should be realigned so as to fit with the EU’s ‘new priorities’, which, it is clear, include economic competitiveness and defence. However, a strong response from Prime Minister Meloni made clear that Italy would not divert important cohesion funds towards the purchase of weapons.

It seems clear that the choice to repurpose cohesion policy funds to invest in defence would be decided primarily at the national level rather than regional level. This begs the question whether such repurposing would risk damaging the multi-level governance approach at the core of cohesion policy. It is likely also that large defence industries would receive more support than smaller businesses in less developed regions. Prioritising defence at the expense of social and economic cohesion may well lead to a failure by the EU to take a holistic view of security in its broad sense.

The newly elected President of the Committee of the Regions, Kata Tüttő, has stated that the possibility of diverting cohesion funds towards defence spending would be a ‘catastrophic mistake’. While acknowledging the current need for increased defence spending in the EU, in her view, security encompasses more than just military defence and that cohesion policy plays a role in the broader security framework of strengthening critical infrastructure, community resilience, and emergency preparedness.

EU Member States’ Competing Views

The views of several Member States, who feel very strongly about the future of cohesion policy were aired in a series of papers in advance of the recent General Affairs Council of the EU on 28 March 2025.

Already in May 2024, a Joint Declaration of 11 ministers responsible for cohesion policy from Baltic and Central and Eastern EU Member States was issued on the Future of Cohesion Policy after 2027.The Declaration favoured the use of EU cohesion funds to provide greater support to countries bordering Russia and Belarus and called for strengthening of the subsidiarity principle and the bottom-up approach of cohesion policy. It also stated that cohesion policy should be able to adapt to changing circumstances, while continuing to pursue its long-term objectives.

While many Member States are in favour of directing cohesion policy towards competitiveness, a fair transition, and the EU's resilience, the fact remains that EU enlargement looms on the horizon, which could thrust Poland and other Central and Eastern EU Member States from being net beneficiaries of cohesion policy funds to net contributors. Poland, in turn, as the largest net beneficiary of cohesion policy funds will have to manage its own competing domestic strategic priorities, as it also supports increased defence spending across Europe. Therefore, even more incentives for structural reform in EU cohesion policy from 2028 to 2034, may be required.

In November 2024, Poland, Germany, Ireland, France, Slovenia and Romania submitted a position paper based on an informal meeting of cohesion ministers that called for the European Commission to ensure that, in upcoming negotiations for a future MFF, regions in the EU would  continue to have a central role in the (i) design, (ii) implementation, and (iii) selection of programmes. The signatories emphasised that cohesion policy is and must remain at its core a policy for territorial development that relies on a place-based approach, shared management and the partnership principle and called on the new EU budget Commissioner, Polish national Piotr Serafin, to present proposals ‘as early as possible in 2025’, to enable swift negotiations among Member States.

A paper setting out the Irish government’s position on the Future of Cohesion Policy was published on 25 March 2025 and stated its commitment to concentrating cohesion policy on the most disadvantaged regions and maintaining its core focus on the economic, social, and territorial integration of the Union. While it supported the view that an enhanced cohesion policy must be flexible to adapt to updated priorities over the course of the MFF, it emphasised that its repurposing should remain true to long-term goals of reducing regional disparities and promoting convergence. It addressed the need to respond to changing geopolitical challenges in the EU but asserted that the Union should work to ensure that “its response to the current crises is aligned with and informs the wider reform of Cohesion Policy, following the issuance of the Commission proposals later in 2025 rather than progressing as a set of stand-alone measures”. This suggests a caution against impulsive decisions that would redirect cohesion policy funds away from their primary objectives. The paper underscored Ireland’s support for the current conditionality regime and proposed the creation of a general legal instrument that could freeze funds for Member States who are not compliant with the rule of law.

Cohesion Policy and the Polish Presidency of the Council of the EU

On 28 March 2025, the Polish Presidency of the Council of the EU hosted a General Affairs Council dedicated to discussing Cohesion Policy post-2027. Government Ministers with responsibility for cohesion policy, including Ireland’s Minister for Public Expenditure, Infrastructure, Public Services and Reform and Digitalisation, Jack Chambers, met to exchange views on a paper published by the Polish Presidency with a view to agreeing Council conclusions that would constitute the Council’s input to the Commission plans for the future of cohesion policy. The paper acknowledged the Commission’s view that cohesion policy should evolve to align with joint EU priorities, such as competitiveness and defence, however it emphasised that the main objective of cohesion policy is to achieve, preserve, and further strengthen social, economic, and territorial cohesion within the EU. 

Kata Tüttő, President of the European Committee of the Regions, addressed the General Affairs Council – the first time a President of the Committee of the Regions has been invited to take the floor during official discussions with ministers. President Tüttő gave her views on the future of cohesion policy, arguing against it becoming a flexible magic wand to solve all the EU’s woes. She stated that ‘Cohesion Policy is the long-term glue that holds the EU together’, and that ‘transforming it into a kind of rapid glue for short-term fixes will come at a price’. President Tüttő emphasised that the EU must avoid centralisation under the guise of ‘simplification’ of cohesion policy at national level, at the expense of regional and local authorities.

The draft Conclusions of the Council reiterated the importance of the continuance of the shared management principle between the European Commission and Member States, multi-level governance, and a place-based approach to cohesion policy. The Council stated its support also for least developed regions and those suffering from demographic disadvantages or from geographic disadvantages, ‘including border regions with Ukraine, Russia and Belarus’. The Council Conclusions acknowledged that cohesion policy is not a crisis response tool, though accepted that it could be used to react to unforeseen circumstances that could undermine regional development.

It is interesting to note that conditionality is mentioned only briefly in the General Affairs Council Conclusions, which repeat the link between respect for the rule of law and conditionality of EU funds. Already, this fleeting reference has been rebuffed by Hungary, which claims that the conditionality mechanisms in the past have operated in a biased way towards it.

Conclusion

In addressing the security challenges that threaten Europe from outside, the Union must ensure that the bonds of its greatest cohesive force are not damaged.  Reshaping cohesion policy can reinforce its strengths – the place-based approach that directs funds to regions that most need it – while acknowledging that an inherent flexibility is needed so that national and regional authorities can adapt to changing priorities over the course of the next MFF.  It is imperative, however, that the debate on future-proofing cohesion policy reflects the spirit of the original objectives of cohesion policy. Serious consideration should also be given to financial options other than cohesion and development funds in respect of the EU’s defence ambitions during the negotiations on the MFF 2028-2034. It is also important that the debate on future-proofing cohesion policy reflects the spirit of its original objectives and that this debate be influenced by voices from all levels of society and from all regions of the EU.