[Publication] Navigating the European Commission’s MFF Proposal for 2028-2034. Mapping Risks and Opportunities for Cohesion Policy and Regional Development

The Commission’s Multiannual Financial Framework (MFF) 2028–2034 proposes merging all EU shared-management funds (Cohesion Policy, Common Agriculture Policy (CAP) and Home Affairs) into a single European Fund implemented through National and Regional Partnership Plans (NRPPs). This integrated model raises several questions on the objectives, governance and implementation of EU support relevant for Cohesion Policy (CP).

Study aim

This study assesses how the NRPP Proposal restructures the support relevant to CP and regional development. It maps continuity and change between the 2021–2027 CP framework and the post-2027 CP Proposal, examines the potential implications and offers concrete policy recommendations to enhance the Proposal’s effectiveness in achieving the Cohesion Policy objectives.

Key findings and policy recommendations

1. Capacity to pursue cohesion objectives

The NRPP Proposal is not underpinned by a clearly articulated intervention logic for promoting cohesion. It assumes that ringfencing resources to less developed regions and ensuring a balanced territorial distribution will suffice to support cohesion. However, the new architecture also offers opportunities: Integrated plans may support more coherent territorial responses and allow for greater flexibility to address new cohesion challenges. The inclusion of reforms may also steer national policies in a more cohesion-friendly direction.

To ensure that these opportunities are realised while mitigating the risks, the study recommends:

• Clarify the cohesion intervention logic: Align the Proposal’s general and specific objectives so the Plans explicitly contribute to reducing territorial disparities, or formally recognise their role in delivering sectoral EU priorities.
• Create dedicated EU cohesion recommendations: The Commission should issue standalone country-specific cohesion recommendations like the “CAP national recommendations” included in Article 2 of the 2028-2034 CAP Regulation, to guide the preparation of the Plans.
• Introduce mandatory territorial impact assessments (TIAs): If the TIA identifies important negative territorial consequences of certain NRPP interventions, Member States should justify the high net benefit of these interventions or explain how they intend to mitigate these effects through complementary national policies.
• Clarify the “right/freedom to stay” concept: Provide guidance on its meaning to ensure concrete and realistic interventions in support of the most disadvantaged areas.

2. Governance and role of regional and local authorities

In the NRPP Proposal, the role of regional and local authorities in planning and implementation is left largely to each Member State, which may decide whether to include territorial chapters. While this approach mirrors aspects of the current Cohesion Policy, the absence of strict regional earmarking, combined with an integrated approach, points to a more centralised governance model. Although such centralisation can improve coordination and efficiency, governance arrangements must continue to respect the subsidiarity principle and ensure a clear accountability chain. To strengthen territorial governance and accountability, the study recommends:

• Add a ‘legal check’ to the ‘regional check’: The regional check should verify respect for subsidiarity and the legal division of competences.
• Introduce region-specific milestones and targets in areas of exclusive regional competence: Progress and payments could be assessed per region to guarantee accountability and avoid penalising well-performing regions.
• Ensure predictable and timely payments to regions: Establish mechanisms preventing central governments from controlling payment timing through selective inclusion of milestones while preserving necessary implementation flexibility.

3. Integrated and flexible programming

The move towards more integrated programming offers opportunities to reduce overlaps between CAP and cohesion spending, but in a context of a reduced envelope in real terms, it risks intensifying budgetary competition between the two. The 10% rural target risks being absorbed by CAP-related interventions and will be difficult to monitor. The NRPP Proposal reserves 15% of the NRPP funds to be redeployed after the mid-term review to respond to new needs and performance considerations (Article 14.2b), but there is a risk that this money is being used in advance for short-term needs.

To prevent these risks from materialising, the study recommends:

• Replace the 10% rural target with a 10% earmarking to support integrated local development strategies, leaving discretion to Member States to distribute the amounts between different local realities.
• Protect ringfenced funding for less developed regions: Exclude CAP and Common Fisheries Policy spending from counting towards minimum allocations for less developed regions to ensure these funds support cohesion-related interventions.
• Prevent early access to the mid-term review reserves by eliminating the possibility to mobilise the reserve’s resources in advance “in duly justified and exceptional circumstances” (Art 14.2.b).

4. Challenges and risks of shifting towards a performance-based delivery model

The NRPP performance-based approach addresses several RRF shortcomings (e.g. by harmonising output indicators). However, it may initially increase administrative complexity and unclear audit rules could encourage continued cost data collection. Milestones may also be harder to apply to high-risk and innovative operations.

To address these challenges, the study recommends:

• Provide guidance and stronger technical assistance for weaker administrations: The Commission should issue clear methodologies to define milestones, targets and payout values, develop standard unit costs or flat rates, and offer targeted support for weaker administrations.
• Create a methodological handbook for payout values: The Commission should establish predefined payout values for reform outputs and harmonised criteria for calculating payout values across Member States for commonly supported types of investments.
• Adapt milestones for innovative or risky projects: Allow for alternative milestone designs so performance-based funding does not discourage experimentation or innovation.

Synergies with the European Competitiveness Fund (ECF)

The NRPP Proposal includes some mechanisms to promote synergies with the ECF at the implementation phase. However, these mechanisms are mainly designed to ensure EU financing for excellent projects (through ‘seals’) or reduce the administrative burden for NRPP authorities by delegating implementing tasks to the EU level (through transfers). There is a fundamental tension between the ECF, which supports competitiveness by exploiting scale economies, and the NRPPs, which aim to ensure a territorially balanced development and promote convergence. To reduce this tension, the study recommends:

• Ensure synergies between the ECF and the EU Facility: The EU Facility should complement ECF actions to support the Union’s “overall harmonious development” under Article 174 TFEU. Annex XV’s “Union action”, which allows support for cross-border and multi-country projects (including Important Projects of Common European Interest) and initiatives to close the innovation gap, should be reformulated to clarify that these interventions will be designed in close coordination with ECF actions.
• Promote place-based innovation instruments: Maintain and reinforce interregional innovative investment (I3) projects and incentivise Smart Specialisation Strategies (S3).

6. Role of the European Parliament

The NRPP Proposal offers potential benefits in terms of transparency, but risks limiting the Parliament’s capacity to exert effective scrutiny and decide on the use of the EU Facility. The study recommends:

• Strengthen parliamentary monitoring of implementation: Require more frequent Commission reporting (e.g. bi-annual implementation reports) and allow the Parliament to access annual review meeting reports so scrutiny goes beyond checking milestone completion and assesses real performance.
• Extend the time to revise delegated acts: Amend Article 87.6 (procedure to adopt delegated acts) to give two months to the Parliament and the Council to revise the content of the acts and object if necessary.
• Ensure Parliament’s involvement in the mobilisation of the EU Facility: Require the Commission to present a detailed mobilisation plan in its strategic report preceding the draft annual budget, enabling the Parliament and Council to shape funding priorities in the political steering mechanism preceding the annual budget procedure.