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Charting alternative routes for EU Cohesion Policy Post 2027

Jul 4, 2024 | News, Opinions

“Last Chance Saloon for Cohesion”: New AEIDL policy brief launched

The European Association for Innovation in Local Development (AEIDL) has published an analysis of the future of EU Cohesion Policy post 2027. Written by Serafin Pazos-Vidal, Senior Expert on Rural and Territorial Development, the report outlines significant challenges and proposes new ideas to shape the next generation of the policy, emphasising that the upcoming EU budget cycle may mark a turning point for Cohesion Policy.

Cohesion Policy was initially aimed at achieving EU goals for Economic, Social, and Territorial Cohesion, but it has historically been under continuous scrutiny. Major past reports and reforms have consistently questioned its effectiveness and scope. The policy has increasingly been tasked with addressing broader EU objectives, from the Europe 2020 Strategy to the EU Green Deal, resulting in a strained and complex policy framework.

This time is (really) different

The COVID-19 pandemic brought unprecedented changes, notably through the Next Generation EU (NGEU) and its Recovery and Resilience Facility (RRF). This new instrument has  double the size  of Cohesion Policy and introduced a more centralised management approach at EU level, contrasting with the traditionally decentralised Cohesion Policy based on partnership and multilevel governance. The perceived success of the RRF in delivering faster and more efficient funding raises questions about the future structure and management of Cohesion Policy post 2027.

One or many Cohesion policies? Bonfire of EU instruments?

The AEIDL report presents several key proposals for the evolution of Cohesion Policy. It considers the merit of reintegrating the European Agricultural Fund for Rural Development with other Cohesion Policy funds to avoid fragmented implementation and suggests simplifying local development instruments to reduce complexity.

The end of Cohesion as the emergency wallet of the EU budget?

The report also stresses that Cohesion Policy should no longer serve as EU’s emergency financial first responder, considering instead the use of common EU debt issuance for crisis management.

 The report underscores that the post 2027 EU budget negotiations due in Spring 2025 will be significantly influenced by these evolving dynamics, particularly with new instruments like the EU Social Climate Fund or STEP already shaping the landscape.

No Cohesion without the Right to Stay?

The language of the Letta Report should be harnessed across EU policies and not just Cohesion Policy by operationalising of the “Do No Harm To Cohesion” principle.

No Cohesion without capacity and structural reforms?

This policy brief also emphasises the need for continued capacity building and structural reforms within member states and making structural reforms binding in Cohesion programs. It also proposes a hybrid financing system combining traditional reimbursement with payment by milestone models when results are measurable and suggests a horizontal earmark of 8% across all European Structural and Investment Funds for local development, with streamlined financial rules for small-scale interventions

Some of these ideas drawn from the recent collective book on the Regional Studies Association Cohesion Policy Network (CPNet) and AEIDL Policy Statement for the new EU Term are being considered in the draft Maupertuis Opinion in the Committee of the Regions on “EU Budget and Place Based Policies” first discussed on 3rd July.

Next Steps

AEIDL will continue working on formulating post 2027 EU policy proposal based on evidence from our research projects. Interested stakeholders can join the European Local Innovation Forum (ELIF) to be updated on our policy events and outputs. AEIDL is  also co-organising a workshop on post 2027 Cohesion with the Regional Studies Association and the Joint Research Centre at the EU Week of Regions and Cities in October 2024.