EU Commission Proposes New Cohesion Policy Framework for 2028-2034, Sparking Debate on Competitiveness vs. Territorial Equity
The European Commission has put forward its strategic initiative for the European Union's long-term budget and Cohesion Policy for the 2028-2034 period. The announcement comes one year after former ECB President Mario Draghi's influential report on European competitiveness, which called for significant reforms to address the bloc's relative economic decline. The new proposals aim to foster innovation and strategic autonomy but have ignited a debate over whether they can successfully balance a top-down push for competitiveness with the foundational EU principle of territorial cohesion.
The policy objectives are ambitious, seeking to implement the reformist vision outlined by Draghi. His report identified key vulnerabilities, including stagnant productivity and chronic underinvestment, and proposed a new 'Competitiveness Pillar' within the EU budget to channel collective investment into strategic sectors. The Commission's plan incorporates this by introducing National and Regional Partnership Plans, which will aggregate various funds, including those from the Common Agricultural Policy (CAP), under a single national strategy. The framework also emphasizes greater programmatic flexibility and a shift towards performance-based payments.
The implementation strategy and timeline will see these new regulations take effect from 2028. A key assurance from the Commission is that no less developed region will receive less funding than in the current period, and differentiated co-financing rates will be maintained. However, the move towards a single, centralized plan per member state has raised concerns among regional authorities about a potential loss of decision-making power and a dilution of the policy's traditional place-based approach.
The affected population groups and geographic areas are at the heart of the debate. Critics warn that a focus on performance and competitiveness could inadvertently favor regions that are already more administratively capable, thereby exacerbating existing disparities. This has led to what some are calling a potential 'budgetary hunger games,' where different sectors and territories within a country must compete for a finite pool of resources. Preserving the focus on territorial development is seen as essential for political legitimacy, as neglecting certain regions can fuel political disaffection. This is a critical consideration for the geographic and sector deep dives that inform investment.
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The budget allocation and funding mechanisms are still under discussion, but the proposed structure represents a conceptual shift. Some analysts have noted a trend of 'Hyper-lisbonization' in recent years, where cohesion funds are increasingly centralized and used for short-term national priorities rather than long-term regional convergence. The new framework could accelerate this trend, transforming the Cohesion Policy from a tool for territorial development into a more functional instrument for top-down investment.
Stakeholder consultation and political support will be crucial in the coming months. Regional bodies and policy experts are calling for the new framework to strengthen multi-level governance and ensure the meaningful participation of local actors. One proposed evolution is the move from RIS3 (Research and Innovation Smart Specialisation Strategies) to RIS4, which would add a 'Social' dimension to regional strategies, encompassing human capital, quality of life, and demographics. Such an approach would ensure that investments are holistic and sustainable. For investors, understanding these evolving strategies is key to identifying future growth areas and potential investment risks.
The monitoring and evaluation frameworks will also need careful design. To avoid rewarding only the most advanced regions, performance indicators must include metrics that account for territorial disparities and institutional capacity. The ultimate political challenge is to merge Draghi's competitive agenda with a robust, place-based vision of cohesion. If successful, the 2028-2034 Cohesion Policy could be a powerful engine for growth across all of Europe's territories.
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