EU Cohesion Policy post-2027: An impactful policy for regional competitiveness – a BusinessEurope position paper

Key messages

• Cohesion policy is a core policy of the European Union (EU). Around one third of the EU budget is channeled through this policy, which accounts for €392 billion out of €1,2 trillion for the 2021-2027 period. The primary objective of cohesion policy, as enshrined in the Treaties, is to reduce regional disparities and ensure that all regions can benefit from the single market. Over the years, this policy has become the main EU investment instrument for the long-term structural transformation of regions, and it has brought about a deep transformational impact in many EU territories.
• Nevertheless, important challenges remain. The functioning of cohesion policy is overshadowed by administrative complexity, an important problem which affects its efficiency. Moreover, the policy´s outcome is difficult to evaluate with many regions continuing to face economic stagnation or development traps despite having benefited from cohesion support for decades. It is however complex to establish a direct link – positive or negative – when so many factors can impact results, including macro-level conditions. As mentioned in the Letta report, “there are many factors explaining the lack of growth and dynamism in certain EU territories and not all of them are under the control of regional and local authorities”. Therefore, there is a clear need to re-assess cohesion policy so it can deliver more tangible benefits for regions and citizens.
• From a European business perspective, cohesion policy remains a cornerstone of the EU’s mission, balancing the needs for convergence with competitiveness, as clearly stated in President Ursula Von der Leyen Guidelines and Mission Letters. European companies, large and small, stand to benefit from a well-functioning cohesion policy that delivers long-term stability and innovation-friendly environments in all EU regions. To effectively contribute to EU strategic objectives and regional
  competitiveness, cohesion policy under the next MFF requires not only adequate funding but must also undergo a serious exercise of modernization, including simplification, stronger private sector and regional involvement, and ensuring funds are invested in quality projects. This reflection should also take into account future enlargements.