Today, the European Court of Auditors provided an opinion on the European Commission’s proposed changes to the 2021-2027 cohesion policy framework. The changes aim to enable cohesion policy resources to be re-allocated to newly defined EU priorities, one of which is defence. The auditors acknowledge the urgent need to respond to the rapidly changing security environment. Nevertheless, they flag certain risks and unclear aspects of the proposal that will affect the way it is applied.
On 1 April 2025, the Commission issued two legislative proposals setting new priorities for cohesion policy funds, particularly in the areas of defence, housing, energy, and water resilience. The proposed changes would allow and incentivise managing authorities in the EU member states – as part of the mandatory mid-term review of the 2021–2027 cohesion policy programmes – to re-allocate cohesion policy resources to these newly–defined EU priorities. The proposed measures are voluntary, and do not involve any top–up of the initial allocation available to EU countries.
The auditors note that the decision about the priorities to which cohesion policy resources should be allocated is a political matter for the EU’s co-legislators. While acknowledging the need for cohesion policy to adapt to evolving challenges, they observe that implementing cohesion policy funding effectively already entails challenges, and that the same funds are now being used as a vehicle to support evolving EU strategic objectives. The auditors warn that the proposed measures may increase complexity, put pressure on administrative capacity, and dilute the policy’s focus on reducing regional disparities. They also highlight the lack of an impact assessment, and call for clearer eligibility rules and better coordination with existing EU instruments.
Among the concerns the auditors raise is how transparency obligations and the “Do No Significant Harm” principle (i.e. ensuring that EU initiatives are in line with the EU’s climate and environmental objectives) can apply to defence investments. The proposals also provide for the possibility of financing “affordable housing”, but the term is not defined, the auditors note. The auditors also warn that the use of financial incentives, such as 100% EU funding (i.e. no obligation for public or private co-financing) irrespective of the regional level of economic development, may disproportionally favour rich regions and reduce the overall leverage effect of EU cohesion funds.
Background information
The legislative proposals reflect the Commission’s objectives of accelerating the deployment of cohesion policy funds (ERDF, CF, JTF and ESF+), aligning EU spending with recent strategic initiatives, and considering the current geopolitical context, including Russia’s war of aggression against Ukraine. The proposals set new priorities for the use of cohesion policy funds, offer increased flexibility for reprogramming existing resources, extend the scope of eligible interventions, and introduce financial incentives. Specific provisions are also made for regions bordering Russia, Belarus and Ukraine.
EU law requires the European Court of Auditors to be consulted when EU funding is involved. This opinion follows a formal request from the European Parliament dated 14 April 2025, and aims to identify issues for the European Parliament and the Council to consider, as co-legislators, when they examine the Commission’s proposals. The opinion is available on the ECA’s website in English; other EU languages will follow shortly.