EU budget for the future : regional development and cohesion : a more tailored approach to regional needs.
Date: 2018-08-21
Institutions: Directorate-General for Regional and Urban Policy
Subjects: EU budget, EU financing, EU investment, EU regional policy, economic and social cohesion, regional development

EU BUDGET
FOR THE FUTURE
Regional Development and Cohesion 

#EUBudget #FutureofEurope

29 May 2018

A MORE TAILORED APPROACH TO REGIONAL NEEDS

The new Cohesion Policy will tailor further its interventions to regional and local needs. It will target resources where 
they are most needed, and support locally-led development strategies. The 2021-2027 Cohesion Policy stands for 
a Europe moving closer to citizens.

TARGETING RESOURCES WHERE THEY ARE MOST NEEDED
Modernised and further focused on results, the future Cohesion Policy targets resources to regions that 
need to catch up with the rest of the EU the most, to ensure convergence and a fair treatment for all.

The new allocation method for the funds is still largely based on GDP per capita. It builds on the ‘Berlin formula’, which 
has been adopted by the European Council in 1999.

youth unemployment

low education level

climate change

GDP
per capita

integration of migrants

unemployment

Today the Commission proposes a modification of 
the method. It is slightly modified to focus further 
resources in less developed Member States and give 
more financial support to regions facing industrial 
transition. 

It also includes new criteria for all categories of 
regions in order to better mirror the socio-economic 
situation on the ground – youth unemployment, low 
education  level,  climate  change  and  the  reception 
and integration of migrants. Finally, the Commission 
proposes a ‘safety net’ to avoid too abrupt changes 
in Member States’ allocations.

As  regards  the  Cohesion  Fund,  the  method  is 
unchanged:  Member  States  whose  GNI  per  capita 
is below 90% of EU average will benefit from the 
Cohesion Fund.

 
A COHESION POLICY FOR ALL REGIONS
Cohesion Policy will keep on investing in all regions to help low-growth and low-income regions in the 
South and East of Europe catch up, but also to address pockets of poverty in richer Member States. Territories 
facing industrial transition, spread out all across Europe, will continue to benefit from an EU helping hand.

In addition, regional co-financing rates will increase, returning to pre-crisis levels. It will improve ownership and 
incentivise quality spending. The EU’s contribution will be set at a maximum of 40% to 70%. 

GDP/HEAD (PPS) BY NUTS2 REGION, AVERAGE 2014-2015-2016

Canarias

Guadeloupe 
Martinique

Guyane

Mayotte Réunion

Açores

Madeira

Index, EU-27=100

<75% (less developed regions)

75%-100% (transition regions)

>= 100% (more developed regions)

Index, EU-27=100

<75% (less developed regions)

75%-100% (transition regions)

>= 100% (more developed regions)

0

500km

REGIOgis

@ EuroGeographics Association for the administrative boundaries

0
* the Outermost region of Saint-Martin is included in the NUTS2 Guadeloupe region

500km

@ EuroGeographics Association for the administrative boundaries

GOING LOCAL: SUPPORTING LOCALLY-LED DEVELOPMENT 
STRATEGIES

The  2021-2027  Cohesion  Policy  framework  goes  further  local:  it  supports  the  development  of  local  growth 
strategies by urban, local or other territorial authorities, which should now be put in charge of or involved in the 
selection of EU-funded projects.

The new framework also supports the continuation of ‘Community-Led Local Development’, i.e. the design of local 
growth strategies by action groups involving local authorities, civil society and business partners.

A STRONGER FOCUS ON SUSTAINABLE URBAN DEVELOPMENT
Cities  are  engines  of  growth  and  innovation  but  are  also  faced  with  pressing  challenges:  air  pollution, 
unemployment, social exclusion, to name a few.

6% of the ERDF will be earmarked for investments in sustainable urban development. In addition, the 2021-
2027  framework  creates  the  European  Urban  Initiative,  a  new  tool  for  city-to-city  cooperation,  innovation  and 
capacity-building across all the priorities of the Urban Agenda for the EU (integrating migrants, housing, air quality, 
urban poverty or energy transition, among others).

INTERREG: REMOVING CROSS-BORDER OBSTACLES AND 
SUPPORTING INTERREGIONAL INNOVATION PROJECTS
Interregional and cross-border cooperation will be facilitated by the new possibility for a region to use 

parts of its own allocation to fund projects anywhere in Europe jointly with other regions. 

Meanwhile, ‘Interreg’ programmes will continue to help Member States and regions work together across borders to 
tackle common challenges, with €9.5 billion from the ERDF.

The Commission proposes a new instrument, the European Cross Border Mechanism, to help overcome remaining 
cross-border obstacles by making it possible, on a voluntary basis, for the rules of one Member State to apply in a 
neighbouring  Member  States  for  a  specific  project  or  action  limited  in  time.  This  could  help  more  cross-border 
transport infrastructure or healthcare facilities see the light of day.

The  new  Cohesion  Policy  rules  also  create  Interregional  Innovation  Investments.  Regions  with  matching  ‘smart 
specialisation’ assets will be given more support to work together. The aim is to scale up ‘bankable’ interregional 
projects that can create European value chains in priority sectors such as big data, bioeconomy, resource efficiency 
or connected mobility.

THE EU’S OUTERMOST REGIONS STILL BENEFIT FROM SPECIAL 
SUPPORT
In line with the new Strategy for the Outermost regions, these regions will be given the means to develop 
their  assets,  such  as  blue  growth,  space  sciences  and  renewables.  They  will  keep  receiving  an  additional  EU  funds 
allocation, worth over €1.6 billion from the European Regional Development Fund and will get special support under 
the new Interreg programmes to deepen their integration into their regional space and intensify cooperation among 
themselves or with neighbour countries.

© European Union, 2018 
Reuse is authorised provided the source is acknowledged. The reuse policy of European Commission 
documents  is  regulated  by  Decision  2011/833/EU  (OJ  L  330,  14.12.2011,  p.  39).  For  any  use  or 
reproduction of photos or other material that is not under the EU copyright, permission must be sought 
directly from the copyright holders.

Print

PDF

ISBN 978-92-79-86224-3

ISBN 978-92-79-86236-6

doi: 10.2776/51800

doi: 10.2776/92280

KN-04-18-510-EN-C

KN-04-18-510-EN-N