Debate on the future of Cohesion Policy

February 2024

In an era of rapid technological advancement and significant social and geopolitical changes, the EU faces considerable opportunities and challenges. In light of this, the recent report by the group of high-level specialists commissioned by the European Commission sets out key messages for the evolving debate on the future of Cohesion Policy. What role should Cohesion Policy play in the changes and transformations ahead?

The report stresses that there is no alternative to a strong Cohesion Policy. At its heart, the report advocates for a revitalised Cohesion Policy, one that not only addresses current disparities but is also agile enough to respond to future challenges. Cohesion Policy is instrumental in fostering unity and solidarity among people and places in the EU, ensuring that no region is left behind.

The report emphasises the importance of place-based, people-centric policies and underlines the critical role of collaboration across various levels of governance and policy areas to achieve a cohesive and resilient Europe. Also, Cohesion Policy needs to forge synergies with other EU and national initiatives to ensure that all policies deliver on their goals.

In late 2022, The European Commission invited 18 experts from academia and politics to draw up strategic recommendations on how to maximise the effectiveness of Cohesion Policy with a view to tackling the multiple challenges it faces. Over ten meetings, the group discussed various aspects of Cohesion Policy and possible future perspectives. The public parts of the meetings and the final report of the group can be reviewed on a dedicated website (Abre numa nova janela).

Why does the EU need cohesion?

The starting question of the report touches upon the very reason for cohesion and why it is essential for the EU. The EU’s commitment to cohesion is not merely a strategic choice but a fundamental necessity to ensure its prosperity, stability and unity:

• Challenges driving the need for cohesion. The EU is losing international competitiveness while facing digital, green and demographic transitions, and increasing geopolitical uncertainties. Addressing structural and short-term challenges, the EU needs to tap into the potential of all places and people and boost their dynamics. Only when firing on all cylinders the challenges can be mastered. Accordingly, cohesion is needed to enable all places and people to make their contribution to the global competitiveness of the EU, and not leave anyone behind.

• Economic implications of cohesion. Cohesion is a catalyst for economic innovation and competitiveness within the EU. Fostering an environment where all regions can thrive not only reduces territorial disparities but also contributes to the overall economic prospects of the EU. Investments in infrastructure, research, and innovation underpin sustainable growth and job creation, highlighting the economic rationale behind the push for greater cohesion.

• Socio-political benefits of cohesion. Beyond economic benefits, cohesion plays a pivotal role in reinforcing the EU's social fabric. It promotes social inclusion, enhances the quality of life, and strengthens the sense of European identity among citizens, ensuring a more integrated and cohesive society. The geography of discontent, pointing at increasing numbers of people turning EU-sceptical due to them feeling left behind, has been intensively discussed by the group.

• Cohesion as a core EU value. Economic, social and territorial cohesion are objectives of the EU laid down in the Treaty and mirror the core values of the EU: unity, solidarity and harmony among its diverse regions and member states. Cohesion embodies the principle that, together, the EU is stronger and more resilient. In championing cohesion, the EU reaffirms its commitment to a future where every region and citizen can prosper.

What Cohesion Policy does the EU need?

To achieve cohesion, Cohesion Policy is the main instrument, but it cannot do it alone. Cohesion Policy can help to unlock the EU's full economic potential. By targeting investments in less developed regions, it fosters economic growth, supports job creation, and enhances the quality of life for citizens across the Union.

To maximise its impact, Cohesion Policy must further emphasise its role in developing regions and improving economic convergence and social cohesion. This involves mobilising economic potential, tackling structural bottlenecks, and ensuring that prosperity reaches everyone in the EU. A reformed Cohesion Policy should focus on growth, jobs, equality and opportunities, transcending traditional notions of development support:

• Revitalising Europe: an evolving vision of Cohesion Policy. Cohesion Policy is the EU's flagship strategy for promoting economic, social, and territorial cohesion across its member states. The policy aims to unlock the unique economic potential within each territory, facilitating growth and development. By addressing structural bottlenecks and promoting economic dynamism, Cohesion Policy is pivotal in mobilising resources across the continent to meet the EU's competitiveness challenge.

• Beyond traditional support: a strategy for growth, jobs, equality and opportunities. Cohesion Policy embodies a strategic bet on economic potential, targeting not only infrastructural development but also enhancing the quality of life and access to opportunities for all EU citizens. This entails a nuanced approach that respects regional differences and develops tailored investment strategies, ensuring that prosperity is evenly distributed.

• A systemic policy for EU-wide development. The future of Cohesion Policy necessitates a systemic view, recognising the multifaceted nature of EU's economy. It should broaden its focus beyond the least developed regions to include a spectrum of territories that have been overlooked, thereby addressing the internal polarisation and economic concentration in urban centres. This systemic perspective ensures that every area contributes to and benefits from the EU's overall development.

• Dynamic policy for a changing Europe. Cohesion Policy must evolve from a static model to a dynamic approach that addresses emerging challenges and leverages economic opportunities across the EU. This includes supporting intermediate cities, towns, and rural areas facing development traps, enhancing connectivity, and fostering knowledge exchange to boost aggregate growth.

• A policy without borders. Cross-border integration and cooperation are essential for overcoming developmental barriers. Cohesion Policy should enhance efforts to lower border costs and promote territorial cooperation, ensuring that regions, particularly those along the EU's external borders, are integrated into broader economic and social networks.

As the EU continues to navigate a complex global landscape, Cohesion Policy stands as a critical tool for ensuring regional development and economic convergence. By adopting a more targeted, efficient and dynamic approach, the policy can address the diverse needs of all regions, fostering a more cohesive, competitive, and inclusive EU. This vision for Cohesion Policy not only supports growth and development across the continent but also reinforces the EU's commitment to solidarity and balanced progress.

How should Cohesion Policy change?

The futureproofing of Cohesion Policy is crucial for the European Union as it navigates the complexities of the 21st century. For that Cohesion Policy will have to evolve further to ensure it continues to be a cornerstone of the EU's efforts towards a more dynamic, inclusive, and competitive future:

• Strengthen the place-based and people-centric approach. For Cohesion Policy to truly resonate with the diverse needs of EU regions, it must deepen its place-based and people-centric approach. This involves harnessing local knowledge, fostering regional and local transformation, and ensuring that policies are not just imported models but are adapted to the unique characteristics and potentials of each region.

• Innovation and diversification as Key pillars. The policy must prioritise innovation and diversification, allowing regions to build on their strengths and explore new avenues for growth. This involves supporting sectors and technologies that offer sustainable and inclusive development prospects and encouraging regions to reinvent themselves in the face of changing economic landscapes.

• Strengthening inter-regional links. Enhancing connections between regions to facilitate knowledge transfer, innovation, and investment is crucial. Cohesion Policy should aim to create a cohesive network of regions that leverage each other's strengths, particularly emphasising the support for more remote and vulnerable areas.

• Aligning with broad development goals. Integration of Cohesion Policy with broader EU competitiveness goals and Sustainable Development Goals is essential. This alignment ensures that regional development efforts contribute to the EU's overarching objectives of sustainability, competitiveness and inclusivity.

• Developing strong institutions and governance. Improving institutional capacity and governance at the regional level is fundamental. Cohesion Policy should focus on building the administrative capabilities needed for effective policy implementation, emphasising transparency, accountability, and stakeholder participation.

• Harnessing global opportunities. Regions must be supported in engaging with global markets and value chains, moving beyond traditional development models to embrace innovation and higher-value-added activities. This requires a proactive approach to building regional capacities and establishing connections with global networks.

• A territorially sensitive performance-based model. A continued shift towards a more results-oriented Cohesion Policy is needed, with a stronger emphasis on performance, efficiency and impact. Importantly, Cohesion Policy needs to turn towards a territorially sensitive performance-based model.

• Simplification for greater accessibility. The complexity of Cohesion Policy has often been a barrier to its effectiveness. More concerted efforts towards simplification and streamlining of procedures can make the policy more accessible and user-friendly for all stakeholders.

• Making Cohesion Policy future and crisis proof. Finally, ensuring that Cohesion Policy is adaptable and resilient in the face of future challenges and crises is crucial. This involves incorporating flexibility and rapid response mechanisms that allow the policy to address both long-term development goals and immediate emergencies.

As the EU looks to the future, Cohesion Policy must evolve to meet the needs of a rapidly changing world. Only then, Cohesion Policy can continue to play a vital role in building a more cohesive, competitive and resilient Europe. This also needs to take into account that forthcoming enlargements will change the EU. Cohesion Policy can play a vital role in the effective integration of future member states.

Stressing the need for growth perspectives for people and places and territorially tailored approaches, the report also underlines that Cohesion Policy cannot achieve it all on its own. It needs to become a policy that forges synergies with other EU and national initiatives to ensure that all policies deliver on their goals.

The full report of the group of high-level specialists on the future of Cohesion Policy, and a range of background materials are available at the group’s website (Abre numa nova janela).

by Kai Böhme