EU Cohesion Policy faces pivotal overhaul in post-2027 budget talks

The European Union’s Cohesion Policy is heading into one of the most consequential budget battles in its history, with negotiations over the next Multiannual Financial Framework (MFF) post-2027 already drawing fierce debate among regional leaders, member states, and EU institutions. At stake is a policy that currently accounts for roughly one-third of the entire EU budget — approximately €392 billion for the 2021–2027 period — and funds everything from motorway construction in Poland to digital infrastructure upgrades in southern Italy.

Committee of the Regions stakes its claim

The Committee of the Regions (CoR) has moved quickly to plant its flag in the debate. The body, which represents over 1 million local and regional authorities across the EU, has published its formal position calling for Cohesion Policy to remain a cornerstone of the next long-term budget. It’s not a small ask. The CoR argues that any attempt to renationalise cohesion funds or redirect them into centralised EU programmes would undermine decades of progress in reducing economic inequality between richer and poorer regions.

“Cohesion Policy is the EU’s most tangible investment in people’s daily lives, and we won’t allow it to become a bargaining chip in budget negotiations,” said one senior CoR official familiar with the committee’s position.

The pressure to reform is real

But the CoR’s push comes amid genuine pressure to overhaul the policy. Critics — including some economists and member state governments — argue that cohesion spending has delivered uneven results. Some regions that received billions in structural funds over two decades still lag significantly behind EU averages. Germany and the Netherlands have quietly pushed for a leaner, more results-driven approach. And the European Commission is expected to table its MFF proposals sometime in 2025, which means the political window is already narrowing.

There’s also the question of competing priorities. Defence spending, climate transition, and strategic industrial policy are all clamouring for a bigger share of the next budget. Something will have to give.

What regions stand to lose

For less-developed regions — those with GDP per capita below 75% of the EU average — the stakes are enormous. Countries like Bulgaria, Romania, and Greece depend heavily on cohesion funds to finance public investment that domestic budgets simply can’t cover. In some member states, EU structural funds represent more than 60% of total public investment. Cutting or capping those flows would have immediate, measurable consequences on infrastructure, employment, and services.

Still, the reform debate isn’t going away. Simplification of the notoriously complex cohesion rules is widely seen as overdue, and even strong defenders of the policy admit that the current system carries too much administrative burden for smaller municipalities.

A defining negotiation ahead

The post-2027 MFF negotiations will likely stretch well into 2026, if past budget cycles are any guide. And with European Parliament elections already reshaping political alliances, predicting the final outcome is nearly impossible. What’s certain is that Cohesion Policy’s future will be one of the loudest arguments in Brussels for the next two years.