COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the 9th Cohesion Report
Date: 2024-03-27
Institutions: Directorate-General for Regional and Urban Policy, European Commission
Subjects: EU employment policy, EU regional policy, climate change policy, digital transformation, economic and social cohesion, economic convergence, economic recovery, investment policy, regional development, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 27.3.2024  COM(2024) 149 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the 9th Cohesion Report {SWD(2024) 79}  
 
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

on the 9th Cohesion Report 

“In order to promote its overall harmonious development, the Union shall develop and 
pursue its actions leading to the strengthening of economic, social and territorial cohesion.” 

(Treaty on the Functioning of the European Union Article 174) 

I. Introduction 

Economic, social and territorial cohesion is a European public good  

The  EU  was  founded  on  the  values  of  solidarity,  equal  opportunities,  and  cohesion. 
From  the  outset,  the  Treaty  of  Rome  set  the  goal  of  “reducing  the  differences  existing 
between  the  various  regions  and  the  backwardness  of  the  less-favoured  regions”.  This 
economic and social cohesion, the reduction of internal disparities, has been rightly perceived 
as benefitting all of Europe and remains equally valid today.  

Since then, Cohesion Policy has been one of the key pillars of the European project. From the 
creation of the Single Market, the Economic and Monetary Union, to several enlargements, 
Cohesion  Policy  has  supported  every  step  of  European  integration  –  including,  in  recent 
years,  the  green  and  digital  transitions.  Market  forces  alone  cannot  ensure  that  the  benefits 
from these key integration steps are evenly spread across Europe, therefore Cohesion Policy 
is  necessary  to  help  Member  States  and  regions  contribute,  benefit  and  reach  their  full 
potential.  Over  time,  Cohesion  Policy  has  also  acted  as  an  economic  stabiliser,  a  reliable 
source of support  and investment  during  the  financial crisis,  and, more recently,  during the 
pandemic and Russia’s war of aggression against Ukraine, along with other instruments such 
as  the  Recovery  and  Resilience  Facility.  With  its  regional  focus  and  place-based  approach, 
Cohesion Policy is one of the most visible expressions of European solidarity, an integral part 
of the European growth model, and a cornerstone of our European house. 

Stakeholders confirm the key role and importance of Cohesion Policy.  They have made 
this clear in discussions  on the future of the Policy. Over the past year, regional authorities 
and other stakeholders have provided inputs and 20 Member States have organised debates. A 
High-Level Group of Specialists published key orientations for the future policy1 in February. 
The European Parliament, the Council of the European Union, the European Economic and 
Social Committee and the European Committee of the Regions have all adopted opinions and 
conclusions regarding key elements for the future of Cohesion Policy. Taken together, these 

1 Forging a sustainable future together - Cohesion for a competitive and inclusive Europe: report of the High-
Level Group on the Future of Cohesion Policy  

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inputs  confirm  the  key  role  of  the  policy,  paint  a  picture  of  emerging  challenges,  together 
with lessons learned and possible responses.  

Thirty  years  after  the  parallel  launch  of  the  European  Single  Market  and  of  a 
reinforced Cohesion Policy, and twenty years after the 2004 enlargement, the long-term 
trend is clear: many parts of Europe have experienced a remarkable upward economic 
and social convergence. However, socio-economic disparities persist and a growing number 
of regions risk struggling with new challenges. In this context, it is necessary to take stock: 
not  just  of  the  achievements  of  Cohesion  Policy,  but  also  how  it  can  adapt.  The  Treaty 
objective  of  economic,  social  and  territorial  cohesion  remains  as  relevant  as  ever,  but  the 
methods should evolve. 

Map 1. Economic Development Index at NUTS3 level, 2001-2021 

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II. Cohesion Policy: long-term growth and competitiveness, quality jobs 

The  historic  EU  enlargement  in  2004  is  a  clear  example  of  the  positive  impact  of 
Cohesion Policy. Twenty years later, the average GDP per capita in the Member States that 
joined since then has increased from about 52 % of the EU average in 2004 to nearly 80 % in 
2023. Unemployment rates in these Member States have decreased from an average of 13 % 
to 4 % over this period.  

This  upward  convergence  has  been  driven  by  an  increase  in  productivity  (GDP  per 
person employed) in less developed regions. This testifies to the long-term improvement of 
the competitiveness and business environment of these regions. This catching-up also enabled 
tangible  social  progress,  for  instance  in  terms  of  better  health  outcomes,  and  reductions  in 
unemployment and poverty rates across almost all regions over the last ten years.  

However,  convergence  has  been  uneven  across  the  EU.  This  reflects  differences  in 
productivity  and  competitiveness.  Whereas  several  Eastern  regions  have  experienced 
impressive  catch-up  since  2004,  benefiting  from  a  post-enlargement  economic  boost,  many 
other regions have experienced a gradual divergence, meaning they fail to catch up with the 
EU average. This  is  notably  the case of regions  in  Southern Member States,  and especially 
since the financial crisis of 2008, but also of a group of transition regions in more developed 
Member States. In fact, about a third of EU regions have yet to see a return to 2008 levels of 
GDP per head. These regions cover all stages of development and can be found even in more 
developed Member States.  

Real GDP per capita has even declined in several regions in  Southern Member States since 
the  turn  of  the  century  reflecting  the  impact  of  economic  shocks  and  persisting  structural 
challenges: productivity growth, quality of institutions and the smooth functioning of labour 
markets. At the same time, most Eastern regions should maintain the convergence momentum 
and  extend  their  drivers  of  growth  beyond  metropolitan  areas  to  mitigate  deepening 
interregional disparities. 

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Map 2. GDP per head (pps), 2022 

Map 3. Regional growth of GDP per head 
compared to EU and national averages, 2001-
2021

Note: Map 3 shows regional GDP per capita growth since 2001. All the regions in green (light and dark) experienced growth 
above  EU  average,  whereas  the  growth  of  regions  in yellow  and  orange  was  below  EU  average. The  shade  of  the  colour 
(light and dark green, and yellow and orange) shows regional growth vis-à-vis the national average. 

Cohesion  Policy  has  contributed  to  a  better  functioning  of  the  Single  Market  by 
stimulating  long-term  growth  and  competitiveness.  It  has  improved  access  to  goods  and 
services  through  physical  and  digital  infrastructure,  increasing  connectivity.  Furthermore, 
Cohesion Policy has boosted local economies and attractiveness by improving innovation and 
entrepreneurship  through  support  for  SMEs,  as  well  as  reinforcing  human  capital  with 
training  and  education.  Cohesion  Policy  has  also  supported  good  governance,  cooperation 
and administrative efficiency. 

Cohesion  Policy  has  played  a  key  role  in  supporting  public  investment.  For  example, 
Cohesion  Policy  represents  almost  13 %  of  total  government  investment2  in  the  EU  as  a 
whole, and 51 % in less developed Member States3. These investments have strengthened the 
European growth model, spurring economic growth in line with key policy priorities from the 
twin  transition,  to  innovation,  business  and  skills,  from  childcare,  education  and  health  to 
protection from natural disasters.  

2 Gross fixed capital formation of general government.  
3 Member States with Gross National Income per capita below 90 % of the EU average. 

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Figure 1. Achievements of 2014-2020 Cohesion Policy programmes 

Beyond its direct social and economic impacts, Cohesion Policy has also contributed to 
improving  administrative  capacity  and  the  quality  of  governance  in  Member  States. 
Cohesion  Policy  investments  come  with  pre-requisites,  called  “enabling  conditions”.  These 
support  key  EU  priorities,  as  well  as  the  quality  and  sustainability  of  investments.  The 
horizontal  impact  of  enabling  conditions  are  complementary  with  the  implementation  of 
country-specific reforms promoted through the European Semester. 

In  addition,  the  fundamental  principles  ruling  the  programming  and  implementation  of 
Cohesion  Policy,  through  evaluation,  partnership,  transparency  or  audit  and  control 
requirements, have positive spillover effects on national practices.  

Cohesion Policy strengthens the Single Market and levels the playing field 

Convergence  enables  every  region  to  fully  participate  in  the  Single  Market.  Removing 
barriers to the free movement of goods, services, capital, and workers has promoted a better 
allocation of resources across the EU and fostered the exchange of ideas and innovation. The 
growing diversity of EU regions has provided the Union and its firms with an enlarged pool 
of  competitive  advantages.  By  investing  in  infrastructure,  innovation,  education,  and  other 
key areas, Cohesion Policy helps all regions to participate and reap the benefits of economies 
of  scale  created  by  the  Single  Market  and  by  international  competition.  A  larger,  well-
developed,  innovative,  connected  Single  Market  is  crucial  for  the  development  of  strong 
intra-EU value chains that are important for the EU’s open strategic autonomy. 

Cohesion  Policy  has  significant  and  positive  effects  for  Europe  as  a  whole. 
Macroeconomic modelling4 suggests that the 2014-2020 and 2021-2027 programmes, taken 
together, could increase EU GDP by 0.9 % by the end of 2030. This impact is long-lasting: 

4  The  impact  of  the  2014-2020  and  2021-2027  programmes  was  assessed  using  RHOMOLO,  a  European 
Commission spatial computable general equilibrium model. See Chapter 9 of the 9th Cohesion Report for a more 
detailed analysis. 

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remaining at 0.6 % by 2043. The impact is, of course, much stronger in Cohesion countries5 
where support is concentrated: Croatia’s GDP will be up to 8 % higher in 2030, 6 % higher in 
Poland and Slovakia  and 5 % higher in  Lithuania than in  the absence of  Cohesion  support. 
More developed regions, which receive lower per capita support from Cohesion Policy, also 
benefit  from  strong  positive  spillovers  generated  by  programmes  elsewhere.  Developed 
regions gain partners in their supply chains, and markets for their exports and investments.  

The  positive  return  on  investment  of  Cohesion  Policy  to  the  Single  Market  can  be 
illustrated  by  the  multiplier.  Each  euro  invested  in  the  2014-2020  and  2021-2027 
programmes will have generated 1.3 euros of additional GDP in the Union by 2030 and will 
almost  triple  in  2043,  which  is  equivalent  to  an  annual  rate  of  return  of  around  4 %. 
Modelling also estimates around 1.3 million additional jobs for the EU as a whole by 2027, 
with a large share in the sectors linked to the green and digital transitions. 

The targeted nature of Cohesion Policy support largely  mitigates the risk of crowding 
out private investment. Cohesion Policy mostly focusses on areas where private investment 
is  insufficient,  either  because  of  the  existence  of  market  failures  (e.g.  access  to  finance  for 
start-ups,  micro-  and  small  enterprises)  or  in  order  to  support  public  goods  (e.g.  education, 
childcare).  Quantitative  analyses  underpinning  the  9th  Cohesion  Report6  consistently  show 
positive  net  effects  –  confirming  that  the  policy  encourages  significant  private  investment 
over and beyond the lifetime of programmes. The increased use of financial instruments can 
help lever in further private investment.  

Future enlargements will require the integration in the Single Market of new Member 
States. The EU’s Cohesion Policy objectives remain valid in a wider Union, both in current 
and  future  Member  States7.  However,  socio-economic  convergence  with  the  EU  should 
already start in the pre-accession phase. The New Ukraine Facility, the Growth Plan for the 
Western  Balkans  and  the  Reform  and  Growth  Facility  for  the  Western  Balkans  have  the 
threefold  objective  of  increased  access  to  the  EU  Single  Market,  increased  financial 
assistance and accelerated reform implementation.  

Cohesion Policy has helped mitigate the asymmetric impacts of recent crises 

The  series  of  unprecedented  crises  has  had  an  uneven impact  across  the  Union.  From 
the  COVID-19  pandemic  to  Russia’s  war  of  aggression  against  Ukraine,  different 
regions  and  social  groups  have  been  affected  very  differently.  For  the  pandemic,  the 
effects were more severe in regions dependent on tourism, cultural industries or other labour-
intensive services, as well as industries deeply  integrated in  global value  chains.  Regarding 
Russia’s war of aggression against Ukraine, the negative impacts were particularly felt in the 
border  regions,  as  well  as  in  regions  where  industry  is  vulnerable  to  high  energy  prices,  or 
supply chain disruptions. In general, for all the crises, peripheral and less developed regions 

5 Czechia, Poland, Slovakia, Croatia, Bulgaria, Romania, Estonia, Greece, Cyprus, Latvia, Lithuania, Hungary, 
Malta and Slovenia. 
6 See Chapter 9 of the 9th Cohesion Report. 
7 COM(2024) 146 final, 20.3.2024. 

6 

 
 
were  more  exposed.  And  asymmetric  impacts  were  magnified  by  the  uneven  institutional 
capacity at the various levels required to respond to challenges. 

The EU has reacted promptly to mitigate the impacts of the crises and pave the way for 
a  robust  recovery.  Cohesion  Policy  has  been  quick  in  mobilising  support  to  vulnerable 
regions,  reducing  the  risk  of  further  widening  disparities.  Actions  included  the  injection  of 
new  liquidity  to  support  investment,  flexibility  to  support  the  continuation  of  projects,  job 
retention  schemes,  and  further  targeted  flexibilities  in  programming  and  implementation. 
Notably  through  the  Coronavirus  Response  Investment  Initiative  (CRII)  packages.  In 
addition, under NextGenerationEU, comprehensive support has been channelled to Member 
States  to  foster  their  economic  recovery  process  and  long-term  resilience,  through  the 
implementation  of  reforms  and  investments  under  the  Recovery  and  Resilience  Facility 
(RRF),  as  well  as  the  Recovery  Assistance  for  Cohesion  and  the  Territories  of  Europe 
(REACT-EU).  Together  with  REPowerEU,  launched  in  the  wake  of  Russia’s  war  of 
aggression  against  Ukraine,  the  flexibilities  provided  under  Cohesion  Policy  with  the 
Supporting Affordable Energy (SAFE) initiative, have been instrumental to support the most 
vulnerable,  in  particular,  people  at  risk  of  energy  poverty  and  SMEs  vulnerable  to  high 
energy  prices.  In  parallel,  the  Cohesion  Actions  for  Refugees  in  Europe  (CARE)  provided 
financial support to local authorities and NGOs welcoming people fleeing Ukraine, as a result 
of Russia’s war of aggression.  

Together  with  the  Support  to  mitigate  Unemployment  Risks  in  an  Emergency  (SURE)  and 
NextGenerationEU,  notably  the  RRF,  Cohesion  Policy  interventions  contributed  to  a  fast 
economic  recovery  in  2021  and  2022,  especially  for  less  developed  regions,  and  to  low 
unemployment  rates.  Whereas  the  COVID-19  crisis  had  triggered  a  contraction  of  GDP  of 
5.7 %,  income  had  virtually  returned  to  the  2019  level  in  two  years  in  all  categories  of 
regions. In contrast, following the 2008 crisis, the downturn was less sharp (4.3 % of GDP), 
but two years later, in 2010, less developed regions had contracted even further and transition 
and  more  developed  regions  had  barely  started  to  recover.  Supported  by  the  mitigation 
measures  mentioned  above  and  national  support  actions,  EU  labour  markets  have  shown 
remarkable resilience. It took just one year to return to, or surpass, 2019 employment levels 
in  most  EU  regions.  In  contrast,  during  the  2008  financial  crisis,  the  contraction  in 
employment  lasted  until  2013,  returning  to  pre-crisis  levels  by  2016  and  only  by  2019  in 
Southern EU countries. 

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The recent crises have, nonetheless, highlighted the vulnerability of many regions – and the 
need for more resilience in their economies and labour markets. To this end, the promotion of 
future-proof European value chains should be encouraged – notably through the uptake and 
upscaling of critical and emerging technologies in strategic sectors, as supported through the 
Strategic Technologies for Europe Platform (STEP)8.  

Social convergence has progressed, although many challenges remain 

Social  convergence  is  driven  forward  by  the  strong  commitment  taken  by  EU 
institutions,  Member  States  and  social  partners  during  the  Porto  Social  Summit  to 
achieve the targets of the European Pillar of Social Rights: 

-  At least 78 % of people aged 20 to 64 should be in employment, 
-  At least 60 % of all adults should participate in training every year, 
-  The number of people at risk of poverty or social exclusion should be reduced by at 

least 15 million, including at least 5 million children. 

Map 4. Employment rate (20-64 years old), 2022 

- 

8 Regulation (EU) 2024/795 establishing the Strategic Technologies for Europe Platform (STEP) 

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EU Cohesion Policy has played a pivotal role in the overall improvement of employment 
and social indicators in the EU in the last decade. Eastern EU countries have made significant 
progress  in  social  inclusion  and  reducing  poverty,  converging  to  the  EU  average  (poverty 
rates of 21 %). However, Southern EU countries have stagnated since 2019 (at around 25 %). 
The gap between more developed and less developed regions has also narrowed from around 
14 pp in 2016 to 9 pp in 2022. 

Yet,  positive  trends  in  social  inclusion  and  poverty  reduction  could  be  jeopardised  by 
inflation and high energy prices, and uneven progress across population groups. Rural areas 
in the East and South of the EU are the most directly affected by energy poverty. However, 
pockets  of  poverty  can  be  found  in  every  region  –  including  developed  urban  areas.  Some 
population groups, such as marginalised communities, live in persistent poverty, marked by 
housing segregation, insufficient education and employment opportunities, and limited access 
to basic services. 

Disparities  in  employment  between  regions  have  narrowed,  with  the  active  support  of 
Cohesion  Policy.  Although  employment  rates  remain  weaker  in  less  developed  regions  at 
68 % in 2022, compared to 78 % in more developed regions, the gap has narrowed by 5 pp 
since 2013. 

Unemployment  rates  have  also  converged.  The  improvement  is  impressive  in  less 
developed  regions, where the rate has almost  halved, from  15.8 % in  2013 to  8 % in  2022, 
while  the  reduction  in  more  developed  regions  from  8.3 %  to  5 %  also  shows  significant 
progress. 

However, despite progress in recent years, youth unemployment and the rate of young 
people  not  in  education,  employment  or  training  (NEETs  rate)  in  the  EU  remain  a 
significant  challenge,  as  are  the  persistent  lower  employment  rates  of  persons  with 
disabilities. The decline in youth unemployment and NEET observed since 2014 resumed in 
2021  and  2022  after  a  temporary  increase  in  2020  during  the  COVID-19  pandemic.  The 
unemployment rate of people aged 15 to  24 has sharply dropped  by  more than 10 pp since 
2013,  to  14 %  in  2022.  Nonetheless,  youth  unemployment  is  more  than  double  of  overall 
unemployment,  which  has  dropped  to  6.2 %.  The  NEETs  rate  has  declined  since  2013  by 
more than 4 pp, to 12 % in 2022. Further progress is needed to reach the European Pillar of 
Social Rights target of 9 %. 

Disparities  in  youth  unemployment  between  less  developed  regions  and  other  regions 
decreased  between  2013  and  2022,  thanks  to  higher  reductions  in  less  developed  regions 
and in Southern EU countries. They nonetheless remain high, with the youth unemployment 
rate  at  22 %  in  less  developed  regions  being  almost  twice  that  of  more  developed  regions. 
The  disparities  in  the  NEETs  rate  between  less  developed  regions  and  other  regions  also 
declined  between  2013  and  2022.  Still,  the  NEETs  rate  in  less  developed  regions  remains 
16 %, that is nearly double that in more developed regions.  

Increasingly,  low  unemployment  and  high  labour  demand  put  pressure  on  labour 
markets. Labour and skill shortages are on the rise and have become a major challenge in a 

9 

 
 
variety  of  occupations  and  sectors  across  all  skills  levels,  and  particularly  in  some  regions. 
These shortages are exacerbated by the concomitant challenges of demand for specific skills 
to respond to the digital and green transitions, structural industrial transitions and the sharp 
reduction of the working age population, which is expected to shrink by 50 million by 2050. 
In this regard, inclusive labour market participation of underrepresented groups plays a key 
role  in  achieving  convergence  and  addressing  labour  shortages  in  the  EU,  together  with 
strengthening lifelong learning and education policies, as well as with labour market reforms. 
Women’s  participation  in  the  workforce  continues  to  rise,  thanks  to  high  educational 
attainment, improved access to childcare services and more flexible work arrangements, and 
third country nationals’ employment rate rebounded after a drop in 2020. 

Despite a visible decline in disparities in labour market performance, some regions are 
underperforming  –  the  Central-Northern  regions  of  the  EU  have  stronger  labour  markets 
(and  broadly  speaking  a  better  social  situation)  than  Southern  and  South-Eastern  regions. 
Progress in closing the gender gap in labour market participation has slowed or stagnated in 
recent  years:  for  the  EU  as  a  whole,  the  gender  gap  still  stands  at  11  pp,  which  remains  a 
contributing factor to labour market disparities. 

There  has  been  a  general  increase  in  educational  attainment.  The  share  of  early  school 
leavers has decreased across the EU, particularly in the less developed regions. The positive 
trend in tertiary educational attainment has continued across all regions, with the overall rate 
reaching  34 %  in  2022.  In  contrast,  adult  participation  in  education  and  training  decreased 
when COVID-19 hit, but bounced back especially in less developed regions and Eastern EU 
Member States. 

Skills levels and innovation play a pivotal role in driving long-term productivity growth 
and  competitiveness.  More  skilled  and  creative  workers  are  key  for  innovation  and  the 
creation of new and competitive products and services. In 2022 there was a strong increase in 
adult  participation  in  education  and  training,  surpassing  the  pre-Covid  pace.  However, 
substantial progress is needed to  attain the target of the European Pillar of Social Rights of 
60 %  of  adults  participating  in  education  and  training  every  year.  Experience  in  some 
Member States with Individual Learning Accounts9 show a clear path for progress. 

Disparities  in  education  and  training  persist,  notably  due  to  a  strong  concentration  of 
tertiary  graduates  in  cities  (where  most  possibilities  to  acquire  tertiary  education  are 
concentrated). These lead to imbalances, sometimes further increased by the outmigration of 
tertiary  educated  people  from  the  regions  where  they  had  graduated.  This  ‘brain  drain’ 
constitutes a serious challenge for the future sustainability of regional economies and social 
fabrics.  These  imbalances  in  the  availability  of  talent  across  regions  are  due  to  insufficient 
quality job opportunities and other factors such as lower level of infrastructure endowment, 
access to childcare, education and training, health services and facilities and other services.  

Demographic  change  is  expected  to  further  exacerbate  labour  shortages  and  increase 
pressure on public budgets. After decades of growth, the EU population has been declining 

9 Individual learning accounts give people of working age a budget to spend on quality training to improve their 
skills and employability. 

10 

 
 
since 2020, as net migration is no longer compensating for negative natural growth. At EU-27 
level,  natural  population change  and net  migration are highest in  urban  regions, and lowest 
(and often negative) in rural ones. Moreover, remote regions experience overall negative net 
migration,  linked  to  a  lack  of  economic  and  employment  opportunities,  as  well  as  lack  of 
access to key services (including education, childcare and healthcare), which makes them less 
attractive and may cause people to move away. 

Map 5. Total population change, natural growth and net migration, 2010-2021 

The reduction of the working age population will require accelerated productivity gains 
to maintain living standards and increased employment rates, notably for people not yet 
active  on  the  labour  market.  In  this  regard,  regions  are  unevenly  equipped.  Regions 
combining  a  low  share  of  highly  skilled  people  and  outward  migration  of  the  young  and 
educated may fall into a talent development trap, limiting their capacity to build sustainable, 
competitive  and  knowledge-based  economies.  As  detailed 
the  Communications 
“Harnessing  talent  in  EU  regions”10  and  “Demographic  change  in  Europe:  a  toolbox  for 
action”11,  a  strategic  policy  mix  combining  reforms  and  investments  is  needed  to  revert  or 
adapt to this reality.  

in 

Demographic change requires adaptation at the level of regions and cities. For example, 
the integration of demographic projections into spatial policymaking, adjusting the provision 
of  public  services,  adapting  public  governance,  increasing  employment  rates  and  fostering 
productivity  drivers.  Vocational  education  and  training  has  a  strong  capacity  to  address 
labour  shortages  and  deliver  on  the  green  and  digital  transitions  and  play  a  major  role  in 
smart specialisation strategies: helping retain and attract talent, generate absorptive capacity 

10 COM(2023) 32 final, 17.1.2023. 
11 COM(2023) 577 final, 11.10.2023. 

11 

 
 
 
in the societies and economies in which they are located, and to help build sustainable  (and 
more equitable) communities.   

Map 6. Regions (at risk of falling) in a talent development trap 

…and not all regions benefit from the same growth dynamics 

Economic disparities remain large across the continent. More than one in four people in 
the EU (28 %) live in a region with GDP per capita below 75 % of the EU average. Most of 
them live in Eastern Member States, but also in Greece, Portugal, Spain, Southern Italy and 
outermost  regions.  Since  2001,  real  GDP  per  capita  growth  has  been  negative  in  several 
regions, notably in Greece and Italy, although it has recently been picking up. 

Changes  in  subnational  disparities  show  different  patterns  across  Member  States. 
In many  Eastern  Member  States  (such  as  Slovakia,  Bulgaria  and  Romania), increases  in 
disparities  have  been  driven  by  very  high  growth  rates  in  the  most  developed regions 

12 

 
 
 
(typically  the  capital  city  region).  In  France  and  Greece,  internal disparities  have  increased 
because  growth  of  GDP  per capita  in  poorer  regions  was  particularly  low.  In  some other 
Member States, such as Portugal, the decrease in regional disparities is due to the relatively 
poor performance of some developed, previously dynamic regions. 

In  many  Member  States  economic  development  is  driven  by  the  competitiveness  of 
capital regions and major agglomerations. Coupled with a lack of catching up of other 
areas, this leads to internal divergence. This spatial polarisation can be a source of negative 
externalities  (tensions  on  labour  and  housing  markets,  congestion,  pollution)  and  the 
underutilisation  of  economic  potential  of  the  whole  country.  This  can  undermine  Member 
States’  competitiveness  and  in  turn  the  sustainability  of  their  growth  pattern  in  the  longer 
term. 

Rural,  mountainous,  island,  and  sparsely  populated  areas  continue  to  face  specific 
challenges that hinder economic growth and development, stemming from lower physical 
and  digital  connectivity or  limited  education  and  training  opportunities.  Average  income  in 
rural  areas  is  87.5 %  of  average  income  in  urban  areas12.  However,  over  the  period  2001-
2021,  non-urban  regions  (on  average)  experienced  a  significantly  higher  GDP  per  capita 
growth than urban regions: 1.5 % as opposed to 0.8 %. The trend is nonetheless different in 
Eastern  Member  States,  where 
large 
agglomerations  and  capital  cities.  The  public  report  on  “The  long-term  vision  for  the  EU’s 
rural areas: key achievements and ways forward” sets the scene for a debate on the future of 
rural areas. 

is  more  prominently  driven  by 

the  growth 

These  territorial  disparities  compound  a  situation  in  which  a  number  of  regions  face 
economic  stagnation  or  decline,  with  the  risk  of  falling  into  a  development  trap  (i.e.  they 
fall  behind  EU  and  national  average  growth  rates,  as  well  as  their  own  past  performance). 
These include some larger former industrial poles in more developed regions. Policymakers 
in  trapped  regions  often  struggle  to  find  solutions  to  regain  the  economic  dynamism  of  the 
past. This situation fuels frustration, which is increasingly turning into political discontent.  

The root causes of development traps differ between regions. This requires an individual 
diagnosis,  and  may  involve  various  interlinked  factors,  such  as  insufficient  specialisation, 
weak  public  governance,  an  inefficient  innovation  ecosystem,  a  gap  in  services  or  skills 
mismatches. These factors deserve dedicated analysis for each region and subsequent tailored 
policy responses, through a targeted set of investments and reforms.  

III.  If  left  unaddressed,  structural  and  emerging  challenges  could  widen  territorial 

disparities 

The green and digital transitions bring new opportunities and are necessary to maintain 
the competitiveness of the EU in the future, to ensure a good quality of life for citizens. 
But they also require structural changes, which need to be accompanied by supporting 
policies  –  particularly  for  people,  companies  and  regions  that  are  most  vulnerable  and 

12 Urban-rural Europe - income and living conditions - Statistics Explained (europa.eu) 

13 

 
 
exposed,  with  the  risk  otherwise  of  increasing  regional  and  social  disparities.  The  EU’s 
climate policy seeks to ensure fairness, notably with green house gas reduction targets being 
more  stringent  for  wealthier  Member  States,  whereas  those  with  lower  GDP  per  capita 
receive  a  larger  share  of  the  auctioning  revenues  from  the  Emissions  Trading  System.  In 
addition to cross-cutting EU funds, such as Cohesion Policy and the RRF, a set of dedicated 
funding instruments has also been deployed to mitigate the social and economic impacts of 
climate transition, notably through the Just Transition Mechanism and the forthcoming Social 
Climate Fund.  

Climate  change  risks  increasing  regional  inequalities.  The  frequency  and  severity  of 
weather-related disasters such as extreme temperatures,  storms, inland and coastal flooding, 
droughts and wildfires, are increasing. For example, the floods in the regions on the Belgian-
German  border  in  2021  have  inflicted  direct  damage  estimated  at  EUR  34.5  billion.  Heat-
related mortality  has  increased,  especially  in  relation to  an ageing  population.  These events 
and their impact on people and the economy, as well as their capacity to cope with them, are 
unevenly  distributed  across  Europe.  Coastal,  Mediterranean  and  Eastern  regions,  which  are 
already poorer than the EU average, are more vulnerable and disproportionally affected, and 
face estimated annual economic losses of at least 1 % of GDP and greater human exposure to 
climate-related harms. 

Map 7. The impact of climate change under a 2°C global warming scenario, 2050 

Air pollution in the EU is still characterised by socio-economic differences. Air pollution 
is generally higher in cities than in rural areas, due notably to the impact of traffic. Although 
air quality improved in both the richest and poorest regions of the EU over the period 2007-
2020,  inequalities  persist  as  the  concentration  of  fine  inhalable  particles  is  consistently 
around a third higher in the poorest regions more dependent on solid fuels for heating. 

Mitigating  climate  change  and  improving  the  quality  of  the  environment  demands  a 
rapid  reduction  of  emissions  of  greenhouse  gases  and  air  pollutants  in  all  sectors, 

14 

 
 
including through the circular economy and restoration of ecosystems. This requires action at 
all levels of government, as these challenges tend to have strong territorial and social impacts. 
Natural, geographical and socio-economic differences between regions also lead to different 
capacities to reduce emissions. 

The transition to a climate-neutral economy needs to be accomplished in a just and fair 
manner. The uneven capacity of regions to reap the benefits of this transition may exacerbate 
territorial  disparities.  The  economic shift  associated with  this transition  tends to  benefit the 
regions that are more able to attract investment and mobilise skilled labour. At the same time, 
many  rural  and  less  developed  regions  have  a  high  potential  to  produce  renewable  energy 
from  wind  and  solar  or  for  carbon  capture  and  storage  in  natural  ecosystems.  The 
development  of  this  potential  would  serve  not  only  the  regions  themselves  but  energy 
security across Europe as a whole. 

Map 8. Untapped potential for solar, wind and hydro power 

15 

 
 
 
The  climate  transition  also  brings  both  opportunities  and  challenges  for  employment 
and for households. Certain sectors that are heavily dependent on fossil fuels are likely to be 
affected  by  job  losses  or  restructuring.  At  the  same  time,  climate  change  represents  a 
challenge  for  traditional  sectors  such  as  agriculture,  tourism,  industry  or  even  energy 
production,  especially  in  areas  where  water  scarcity  becomes  the  norm.  Workers  in  sectors 
where  the  impact  of  climate  change  is  stronger  –  especially  those  with  specific  skills  or 
limited opportunities to move into other industries – may struggle to find new jobs, leading to 
unemployment and pressures on household incomes. In the case of sectors that are dominant 
in  the  regional  and  local  economies,  the  impacts  will  be  of  a  broader  scale,  requiring  the 
economies in  these  regions to  adapt  to  stay competitive. In  addition,  the implementation  of 
climate-friendly 
investments,  creating 
difficulties for low-income households.  

technologies  and  measures  require  additional 

A  comprehensive  approach  is  needed  to  foster  jobs  and  opportunities  across  regions, 
deal with the asymmetric costs of climate change and implement the climate and green 
transition,  including  accelerating  the  mitigation  of  greenhouse  gases  and  air  pollutants 
emissions,  the  necessary  investments  in  climate  resilience,  improving  the  management  of 
natural  resources  and  nature  restoration,  creating  healthy  ecosystems  and  nature-based 
solutions,  supporting  climate  change  adaptation  and  disaster  risk  management,  investing  in 
water  efficiency  and  wastewater  treatment  (where  necessary),  in  the  circular  economy,  in 
energy efficiency of dwellings and shifting to climate-friendly transport modes. 

The  digital  transition  provides  opportunities  for  all  regions  in  terms  of  increased 
productivity  of  businesses,  innovation,  resilience  and  access  to  services  and  an 
opportunity  especially  for  rural  and  more  remote  territories.  However,  the  digital 
transition  may  also  entail  risks  for  cohesion,  due  to  the  uneven  capacity  of  territories  and 
people to adopt and make use of digital technologies - including for those in disadvantaged 
situations and marginalised communities. In the absence of adequate public policies, digital 
skills  gaps  may  widen,  potentially  deepening  social  and  regional  divides  within  Europe. 
Moreover, the lack of investments in digital connectivity infrastructure and the deployment of 
digital  technologies  can  hamper  the  long-term  growth  and  competitiveness  of  affected 
regions.  This  can  have  a  negative  impact  on  the  socio-economic  attractiveness  of  such 
regions, making it more difficult to retain skilled workforce and innovative businesses. 

Continuous support for regions, especially the least prepared ones, and in particular in 
rural and remote areas, is needed to ensure that they can reap the benefits of the digital 
transformation. Such support is in particular needed as regards investments in the rollout of 
advanced digital network infrastructures and services, the acquisition of basic and advanced 
digital skills as well as the uptake of digital technologies by businesses, citizens and public 
administrations. 

The new geopolitical landscape may also severely impact numerous EU regions. Russia’s 
war  of  aggression  against  Ukraine  led  to  some  regions  experiencing  a  sharp  reduction  of 
investment, trade flows and economic activities (including tourism), as well as new economic 
barriers and job losses. The war also resulted in an unprecedented number of people needing 
shelter in the EU. With a combination of legal, operational and financial support, the EU has 

16 

 
helped  ensure  that  both  those  fleeing  to  the  EU  and  the  Member  States  receiving  them  are 
well  supported.  However,  some  regions  have  seen  a  particularly  high  number  of  arrivals, 
putting pressure on local integration systems. Regions bordering Russia and Belarus are also 
facing security challenges and the threat or use of instrumentalisation of migration.  

Continuous support is also needed to some Southern peripheral regions and outermost regions 
exposed to particular migratory pressure at the external border or experiencing an increase in 
irregular arrivals.  

Rising  tensions  and  greater  international  competition  call  for  more  diversified  value 
chains. In the  context of an open strategic  autonomy, the diversity of EU regions and their 
existing and potential competitive advantages are an asset. Regional diversity can strengthen 
the  Single  Market  and  value  chains  across  Europe.  But  to  achieve  this,  regions  must  be 
equipped with  the right physical,  human and innovation  resources  – and  be able to  unleash 
their potential and added value. 

Governance matters 

Deficiencies in public governance and administrative capacity hamper the development 
potential and remain a structural challenge in several regions and Member States. The 
quality of institutions – including respect for the rule of law, and administrative capacity – is 
crucial for the return on public and private investment. There is a strong correlation between 
the  quality  of  governance  and  the  impact  of  Cohesion  Policy  investments.  This  calls  for 
strengthening  administrative  capacity  in  European  regions,  including  in  view  of  future  EU 
enlargements, since improving the quality of governance at national, regional and local level 
can increase the effectiveness of national and European policies and investments. 

17 

 
 
Map 9. European Quality of Government Index, 2024 

The  development  potential  of  many  regions  may  also  be  affected  by  the  lack  of 
diversification  of  funding  sources  at  regional  and  local  levels,  when  relying  largely  on 
transfers from national budgets. Subnational entities are in charge, on average, of more than 
half  of  public  investments.  This  proportion  is  lower,  yet  increasing,  in  less  developed 
Member  States.  This  type  of  dependence  undermines  the  resilience  of  the  concerned 
countries  to  shocks.  Higher  and  diversified  financing  capacity  of  regional  and  local 
together  with 
authorities,  notably 
reinforcement of their institutional capacity and administrative competences, would therefore 
reinforce the sustainability of their development strategies.  

to  mobilise  private 

the  possibility 

investment, 

IV. Taking stock of Cohesion Policy achievements and drawing lessons for the future 

As highlighted above, while Cohesion Policy has successfully contributed to convergence 
between Member States, the picture at sub-national level is more nuanced. Indeed, this 
national  convergence  process  is  sometimes  overshadowed  by  increasing  sub-national 
disparities, notably between large metropolitan areas and other regions, as well as by regions 
lagging behind, often caught in a ‘development trap’.  

18 

 
 
The 2021-2027 programmes started with some delay because of the impact of the pandemic 
and, in some Member States, due to other factors such as the need to prepare Recovery and 
Resilience Plans at the same time. Managing authorities in Member States and regions had to 
deal in parallel with different governance systems and timeframes. Less developed Member 
States  and  regions,  which  most  need  Cohesion  Policy  investments,  often  encounter  design 
and implementation difficulties - and have more limited administrative resources. Despite the 
measures  to  simplify  Cohesion  Policy  introduced  through  the  2021-2027  legislative 
framework and the support to administrative capacity provided over the last decades, further 
simplification of the policy is necessary. 

To  strengthen  its  effectiveness  in  delivering  its  Treaty  objectives,  notably  in  the  light  of 
challenges,  there  is  a  need  to  reflect  on  how  the  design  of  Cohesion  Policy  could  be 
further improved.  

Delivering on the Treaty objective: reducing disparities in economic development  

Cohesion Policy has constantly evolved over past periods, to adapt to new circumstances 
and  to  support  EU  priorities.  This  has  involved  changes  to  the  investments  supported, 
geographical  coverage,  delivery  mode,  the  use  of  conditionalities  and  the  link  with  the 
European Semester process. At the same time, the fundamental values and principles of the 
policy  have  been  maintained  and  even  strengthened  over  time:  a  long-term  framework  for 
programming,  partnership  with  stakeholders  and  civil  society,  multilevel  governance, 
evaluation and data collection, and most of all, the place-based approach – where support is 
tailored to regional specific needs and opportunities.  

In line with its Treaty objectives, Cohesion Policy resources have been concentrated on 
the EU’s less developed regions and Member States: 70 % of both the European Regional 
Development  Fund and the European  Social Fund Plus  are allocated to  these regions under 
the 2021-2027 programmes. The Cohesion Fund is entirely allocated to Member States with 
GNI  per  capita  below  90%  of  the  EU  average.  Although  all  regions  receive  funding  from 
Cohesion Policy, the aid intensity in 2014-2020 is higher in the less developed regions, with 
around EUR 297 being allocated per inhabitant and per year on average, against EUR 117 for 
the average EU.  

While maintaining the main focus on less developed regions, attention should also be paid to 
development  dynamics  and  long-term  trends,  tackling  problems  before  they  become 
ingrained  and  helping  regions  caught  (or  at  risk  of  being  caught)  in  development  traps.  In 
short, taking a more pro-active approach to delivering on the Treaty objective of promoting 
harmonious development.  

Different regions have different starting points – and different development paths 

Regions have different development starting points, needs, and capacities. They are also 
unevenly equipped to cope with emerging challenges, given their different administrative and 
financial  capacities.  They  will  therefore  take  different  development  paths  to  manage 
ongoing and future transformations. 

19 

 
The  EU,  through  Cohesion  Policy  (but  not  only),  should  channel  targeted,  place-based 
support focusing on the specific needs of each region, consistent with EU priorities and with 
due attention to the challenges, frameworks, and policies in each Member State. 

Regional development programmes have long been the mainstay of Cohesion Policy, but the 
Just Transition Fund has illustrated how support can be further tailored to specific territories’ 
development  needs,  with  a  view  to  addressing  pre-identified  climate  transition  challenges. 
Similarly, smart specialisation strategies have proven to be helpful in strengthening regional 
innovation ecosystems: based on local capacities and assets, relying on a network of local and 
regional stakeholders, and addressing the innovation divide.  

The green and digital transitions, the demographic transformation, changing global economic 
trends and climate change will affect all regional economies. But the scale and nature of these 
challenges will differ between regions – as well as their ability to face them. 

Therefore, a thorough reflection is needed on how to best further tailor the policy to the 
different  economic  profiles  and  geographical features  of  regions  to  strategically  target 
investments.  There  is  a  growing  need  to  reflect  better  multiple  development  challenges, 
reform needs and differing social and employment circumstances in order to facilitate more 
efficient  programming  of EU funds in  outermost, sparsely  populated, islands, mountainous, 
border regions, rural areas and areas affected by industrial transition and beyond.  

Promoting more balanced territorial development  

Sub-national  economic  development  is  often  characterised  by  strong  polarisation 
between  capital  regions  and  large  metropolitan  centres  on  the  one  hand,  and  regions 
with  lower  population  density  on  the  other.  The  uneven  distribution  of  growth  drivers 
leads more developed regions to perform better in terms of innovation and competitiveness, 
quality  of  public  governance  and  administration,  and  education  attainment.  This  can  also 
mean that significant economic and quality job creation potential remains to be exploited in 
less developed rural and intermediate regions. 

Metropolitan  areas,  cities  and  their  surroundings  play  a  central  role  in  regional 
development.  They  concentrate  human  capital  (including  universities,  vocational  training 
centres and R&D centres) and ensure high connectivity and high quality services. Because of 
this,  they  naturally  attract  investment.  But  their  attractiveness  comes  at  a  price:  higher 
congestion,  social  challenges,  and  housing  costs  –  which,  coupled  with  higher  wage  costs, 
may undermine their competitiveness.   

Small towns and medium-sized cities also play a pivotal role in territorial development, 
by fostering the growth of their surrounding areas. They are key in the provision of public 
and  private  services  and  offer  employment  and  education  opportunities  to  the  surrounding 
areas.  

Better  cooperation  across  EU  regions  can  also  contribute  to  achieving  more  balanced 
territorial development. Cohesion Policy, especially through Interreg programmes, has helped 
to  support  interregional  collaboration  through  cross-border  and  transnational  cooperation, 
including through macro-regional strategies. These foster innovation, development, and better 

20 

 
governance.  There  is  nonetheless  room  for  strengthening  regional  cooperation  at  different 
levels – notably in delivering common public goods across borders, given the added-value of 
supporting cross-border investments with the European budget.  

Territorial imbalances could be mitigated by a more polycentric development model: building 
on small and medium-sized cities and promoting accessibility of public services in areas far 
from  large  urban  centres.  Regional  cooperation  could  be  strengthened  by  building  the 
capacity of relevant authorities and stakeholders.  

Partnership, multilevel governance and empowerment of stakeholders 

People on the ground have more knowledge of the exact needs of their territory. As such 
they must be involved in decision and policy making. This inclusion and empowerment can 
also serve to counteract rising political discontent13 and distrust of public authorities.  

The 2021-2027 framework reinforced partnership and the involvement of regional and local 
actors, civil society, and social partners. Actions included the promotion of territorial delivery 
models,  such  as  Community-led  local  development  (CCLD)  or  integrated  territorial 
investments. These combine funding from multiple sources to serve the implementation of a 
territorially based strategy, involving local partnership, bottom-up approaches and territorial 
governance. Further reflection is needed on how to best involve sub-national authorities and 
other relevant stakeholders, and enhance territorial multi-level governance mechanisms. The 
aim is to better respond to the needs of economic and social partners and citizens, in line with 
EU  priorities.  This  enhanced  role  for  local  partners  requires  improving  their  administrative 
capacity – how best to do this should be part of the debate.  

Promoting  institutional  convergence  by  addressing  existing  public  governance  and 
administrative capacity shortcomings 

Good  governance,  strong  institutions,  respect  for  the  rule  of  law,  and  strong 
administrative  capacity  are  a  precondition  for  effective  and  efficient  design  and 
implementation  of  any  development  strategy,  and  more  generally  for  economic  and 
social  progress.  Administrative  and  governance  weaknesses  impede  some  Member  States 
and regions in reaping the full benefits of Cohesion Policy – notably due to their difficulties 
in preparing and implementing investments. 

Weaknesses in governance and capacity are still widespread. Current support from Cohesion 
Policy,  through  technical  assistance,  mostly  fills  capacity  gaps  in  fund  management  and 
delivery arrangements, including when they relate to combating fraud and corruption.  

Other EU instruments have also contributed to reinforcing administrative capacity, mostly the 
Technical  Support  Instrument,  which  increasingly  supports  regional  and  local  authorities. 
Reforms  of  public  administrations  supported  by  the  RRF  (for  example  in  permitting 

13 A. Rodriguez-Posé, L. Dijkstra and H. Poelman: The Geography of EU Discontent and the Regional 
Development Trap, Regional Policy Working Papers 03/2023  

21 

 
 
procedures or public procurement) have benefited investments financed both by the RRF and 
Cohesion Policy. 

A  more  ambitious  and  comprehensive  approach  is  necessary  to  address  weaknesses  in  the 
national  and  regional  administrations,  as  well  as  among  beneficiaries  and  partners.  Such  a 
strategic  approach  could  combine  tailored  technical  support  with  reform  requirements  in 
certain domains.  

Addressing  administrative  shortcomings  would  not  only  improve  the  effectiveness  of 
Cohesion  Policy,  but  also  contribute  to  stimulate  investments  and  exchanges  within  the 
Single  Market,  increase  the attractiveness  of the  concerned  regions and  Member States  and 
improve their capacity to implement the EU acquis.  

Enhancing the effectiveness of Cohesion Policy investments and promoting reforms 

Investments  are  a  necessary,  but  not  sufficient,  condition  to  ensure  economic 
development. Some regions, despite receiving Cohesion Policy support for many years, 
still experience weak economic performance. Reforms are needed to remove obstacles to 
regional development – be it specific investment barriers, regulatory obstacles or measures 
to improve the functioning of the labour market and the business environment.  

Cohesion  Policy, under the 2021-2027 framework, has  promoted stronger linkages  between 
investments  and  reforms  through  enabling  conditions,  and  alignment  with  the  European 
Semester.  By  removing  obstacles  to  regional  growth  and  development,  such  linkages  can 
have a positive impact on the Single Market. 

Enabling  conditions  establish  a  uniform  framework  to  increase  the  effectiveness  of 
Cohesion  Policy  investments,  ensuring  for  example  the  economic  relevance  and  financial 
sustainability  of  transport  investment  planning  or  the  coherence  of  water  management  with 
EU  priorities  and  requirements.  However,  the  application  of  these  conditions,  through  a 
common  set  of  requirements  established  in  the  regulatory  framework,  may  limit  their 
capacity to take account of Member States’ specific difficulties, needs and challenges as they 
evolve over time. 

A stronger coordination has also been put in place between the European Semester and 
Cohesion Policy investments. While the European Semester focuses on national reforms, the 
strengthened territorial and social dimension in the Semester since 2018 has increased its role 
in  guiding  Member  States  to  harness  the  economic  potential  of  their  whole  territory  and 
reduce inequalities. Indeed, the investment-related country-specific recommendations steered 
the  2021-2027  Cohesion  Policy  programmes  and  the  use  of  the  Just  Transition  Fund.  The 
2024  recommendations  will  have  a  key  role  in  the  mid-term  review  and  adjustments  of 
programmes in 2025 with an enhanced focus on regional specificities and challenges.  

In  order  to  further  stimulate  regional  growth  and  convergence,  there  is  a  need  to  explore 
how  the  link  between  investments  and  reforms  could  be  further  strengthened  to 
maximise  the  impact  of  Cohesion  Policy.  This  reflection  should  take  into  account  the 
experience  of  other  EU  instruments  –  notably  the  RRF,  which  has  introduced  a  stronger 
complementarity  of  investment  policy  and  reforms  in  Member  States.  Reflections  should 

22 

 
cover  the  scope  of  the  reforms  needed,  the  role  of  the  European  Semester,  and  the 
coordination between European, and national and regional policies. 

Better coordination and coherence with national policies 

Promoting  cohesion  is  not  the  responsibility  of  Cohesion  Policy  alone.  Leveraging  the 
economic  potential  of  all  EU  regions,  while  reducing  socio-economic  inequalities,  requires 
common effort – and should be a shared objective of investment policies, at EU and national 
levels. This has not always been sufficiently the case. Hence, there is need to further reflect 
on how EU and national action to address disparities and to promote the Treaty objective of 
economic,  social  and  territorial  cohesion  should  work  together,  reinforcing  each  other  and 
tailoring support to different types of territory.  

For  instance,  integrating,  where  relevant,  the  territorial  dimension  into  policy  design 
could  reinforce  greater  coherence  between  regional-specific  needs  and  horizontal 
(European and national) policies.      

Making delivery more effective 

Delays in programming and implementation of Cohesion Policy programmes (partially rooted 
in the backloading of financial implementation, coupled with administrative shortcomings in 
some  Member  States  and  regions)  suggest  that  the  delivery  mode  of  the  policy  can  be 
improved.  This  can  be  done  notably  by  ensuring  further  simplification  for  administrations 
and beneficiaries.  

The  2021-2027  framework  has  put  forward  important  simplification  measures  – 
including a reduced list of policy objectives, a clearer intervention logic through indicators, 
lighter  reporting,  and  single  audit  arrangements.  It  also  extended  possibilities  to  use 
alternative payment options beyond invoice-based costs, i.e. financing not linked to costs, or 
simplified  costs  options.  This  has  paved  the  way  for  simpler  implementation,  with  quicker 
payment possibilities. However, Member States have not yet made full use of these options.  

The positive experiences that have been gained through the implementation of the ESF 
and  ESF+,  moving  towards  a  performance-based  delivery  model,  can  help  provide 
lessons for the future. It is important to assess whether this delivery model, with payments 
linked to the achievement of outputs (instead of the reimbursement of incurred costs), could 
bring  a  reduction  of  administrative  burden  for  programme  authorities  and  beneficiaries, 
accelerate financial implementation, and increase the result orientation of the policy.  

The  mid-term  evaluation  of  the  RRF14  has  also  provided  some  important  reflection  to 
consider for the future design of EU funding instruments. The associated consultations show 
that  there  is  broad  support  for  performance-based  funding  instruments  at  EU  level.  Funds 
under the RRF are disbursed upon the achievement of milestones and targets, which represent 
concrete  steps  in  the  implementation  of  reforms  and  investments  by  Member  States,  thus 
rewarding progress along the way.  

14 COM(2024) 82 final, 21.2.2024.  

23 

 
 
The mid-term evaluation also finds that combining reforms and investments in an integrated 
manner provides effective incentives to deliver on long-standing reform needs – and can lead 
to  more  coherent  and  efficient  implementation.  The  recovery  and  resilience  plans  foster 
holistic policymaking by incentivising Member States to design a coherent set of reforms and 
investments,  with  clear  deliverables,  that  address  both  EU  policy  priorities  and  country-
specific  challenges.  At  the  same  time,  the  evaluation  shows  that  local  and  regional 
authorities,  stakeholders,  and  social  partners,  have  been  pointing  to  their  insufficient 
involvement,  and  recalls  the  importance  of  their  effective  involvement  –  not  only  in  the 
design,  but  also  in  the  implementation  and  monitoring  of  the  measures  that  affect  them. 
Finally,  the  evaluation  also  underlines  potential  areas  for  future  simplification  to  ensure 
sufficient  flexibility  in  the  design  and  implementation  of  the  plans,  notably  regarding  their 
revision procedure, the formulation of milestones and targets as well as the current audit and 
control framework.  

Any future change to Cohesion Policy or any new delivery model  needs to be aligned with 
the  Treaty  objective  of  economic,  social  and  territorial  cohesion,  and  take  into  account  the 
experience from Cohesion Policy programming and its regional and place-based approach, as 
well as lessons learned from the RRF. There are also practical issues which would have to be 
considered – for example, implications for the audit and control system. 

Reaching long-term objectives – but with built-in flexibility, for unforeseen circumstances 

Cohesion  Policy  programmes  pursue  long-term  development  objectives  with  an 
implementation period spanning over a decade.  

The  existing  possibility  to  amend  Cohesion  Policy  programmes  already  allows  for 
flexible adjustment to take account of changing circumstances. This flexibility has increased 
over  time.  It  has  been  used  to  great  effect  in  response  to  economic  crises  and  unexpected 
shocks,  notably  in  the  areas  of  emergency  management,  recovery  and  prevention.  The 
legislative framework includes options for a swift reallocation of funds between and within 
programmes, the mid-term review exercise, and specific provisions for temporary derogations 
in response to exceptional or unusual circumstances.  

While it was crucial for Cohesion Policy to contribute to the EU’s response to the socio-
economic fallout of the COVID-19 pandemic and of Russia’s war of aggression against 
Ukraine,  its  main  focus  must  remain  on  the  achievement  of  long-term  structural 
objectives. Economic resilience can only be achieved through long term investments, notably 
in  the  diversification  of  regional  economies,  building  adaptability  to  technological  and 
demographic change and upskilling the labour force. 

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CONCLUSION 

The 9th Cohesion Report highlights significant achievements of Cohesion Policy in terms 
of fostering upwards economic and social convergence in the Union. Challenges remain 
especially  at  regional  level,  and  these  will  be  further  impacted  by  structural 
transformations.  Lessons  learned  from  past  implementation  periods,  and  from  the 
interplay  with  other  instruments,  underline  the  need  for  further  improvement  of  the 
design  of  Cohesion  Policy.  A  stronger  and  modernised  policy  is  essential  to  fortify 
Europe’s  growth  model,  to  build  an  inclusive  Union,  and  to  deliver  on  the  Treaty 
objective of economic, social and territorial cohesion.  

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