What changed between the plenary report and the adopted text

T. whereas despite the regulatory improvements introduced in the 2014-2020 programming period and the improvements to the 2021-2027 regulatory framework, a number of challenges still remain; whereas the policy has proven to be very complex to implement for the managing authorities, competent local and regional bodies and final beneficiaries;

U. whereas public procurement rules in many Member States, alongside additional national auditing and monitoring, generate an additional burden for managing authorities and beneficiaries;

V. whereas, while following a strategic approach throughout the programming period is of the utmost importance, it should be possible to reassess and adjust this approach midterm; whereas, nevertheless, a sufficient degree of flexibility in cohesion policy’s programming is needed to address unexpected events that occur during the programming period;

W. whereas cohesion policy funding should comply with the Charter of Fundamental Rights of the EU, the principles of the rule of law, and the European code of conduct on partnership;

X. whereas the principles of multilevel governance and partnership need to be significantly strengthened to effectively involve the local and regional level in the programming, reprogramming and implementation of EU funds;

Y. whereas cohesion policy has effectively helped to reduce disparities over the years, but, as made clear by the eighth cohesion report, some inequalities persist among Member States, among and within regions, among different types of areas (as referred to in Articles 174 and 349 TFEU), and within the richest urban areas; whereas new disparities, such as the regional innovation divide, have also emerged;

Z. whereas the outermost regions and island territories with the status of overseas countries and territories face a significant number of structural constraints and are less developed than the continental regions of their Member States; whereas a stable and predictable regulatory environment is particularly important for the efficient management of cohesion policy funds in these regions;

AA. whereas the green and digital transitions are moving at very different speeds across the EU and should be properly managed to avoid adverse impacts on certain regions and even greater disparities;

AB. whereas while eastern EU regions have been catching up, other regions, especially in the southern EU, have stagnated; whereas certain regions are caught in a development trap, characterised by long periods of slow or negative growth, with low productivity and low levels of job creation;

AC. whereas the Russian war of aggression against Ukraine has particularly affected the EU's eastern border areas;

AD. whereas demographic ageing in the EU as a whole has led to a shrinking working-age population; whereas several EU regions are facing the ongoing departure of their young and skilled workers; whereas rural, peripheral, outermost and industrial-transition regions in the EU are particularly affected by these worrying demographic trends; whereas these trends, if left unaddressed, will have undesirable long-term effects on the EU;

AE. whereas EU pre-accession and enlargement processes require a well-balanced and targeted role for regional development and cohesion policy;

Outcomes

1. Notes that evaluations carried out by the Member States on the outcomes of 2014-2020 cohesion policy investments show that, in general, cohesion policy brought about positive results in the areas that it supported, ; acknowledges that such investments have contributed to the Europe 2020 strategy objective of smart, sustainable and inclusive growth;

12. Welcomes the cohesion policy contribution to territorial cooperation; notes that this specific goal of the ERDF helped fund cross-border transnational and interregional projects in areas such as research, development and innovation and the environment; underlines that, as reported by the Commission, without this specific cohesion support, most of these cooperation projects would not have taken place; stresses that, by the end of 2022, more than 40 000 businesses had participated in cross-border transnational or interregional research projects, and around 178 000 people had benefited from cross-border mobility initiatives; points out that, according to recent evaluations compiled by the Commission, there are examples of successful cooperation on thematic issues, such as information and communications technology projects related to smart cities in Greece and Cyprus; notes, in addition, that the Sweden-Finland-Norway Botnia-Atlantica programme has increased knowledge on sea and coastal areas protection; underlines that the impact evaluation of the 2014-2020 Central Europe Interreg programme , comprising Austria, Croatia, Czechia, Germany, Hungary, Italy, Poland, Slovakia and Slovenia, showed that, by end of 2021, the programme had had positive outcomes in the fields of innovation, low carbon, the environment, culture and transport; welcomes the fact that the Romania-Serbia Interreg programme also contributed to strengthening the cooperation between both countries in all relevant areas, and that the Croatia-Serbia programme has supported renewable electricity production and increased energy efficiency; draws attention to the positive results of the Sweden, Denmark and Norway Interreg programme in the area of the green economy;

13. Welcomes cohesion policy’s response to the latest crises; notes that more than 300 CRII and CRII+ programme amendments were adopted, resulting in almost EUR 28 billion in funds being redirected to tackle the consequences of the COVID-19 crisis; underlines that EUR 13 billion was redirected to provide business support to the companies most affected by the COVID-19 crisis; notes that only a few evaluations have been carried out in this area so far; notes, however, that, in the Netherlands, Malta and France (Grand Est), the measures funded were considered relevant to the needs of people and companies, according to available evaluations; also notes that there is evidence that the ERDF business support in Hungary made possible by this flexibility had a positive effect on the companies targeted; notes that the Commission’s preliminary evaluation of the support provided by the ESF and the Fund for European Aid to the Most Deprived under the CRII and CRII+ was also mainly positive; underlines that the CRII and CRII+ reached their objectives in most Member States, as they used this funding flexibility to efficiently reallocate remaining resources to fund short-term working arrangements, social inclusion measures and their healthcare systems, depending on their national contexts; stresses that, thanks to the CRII and CRII+, governments were also able to maintain their level of awarding contracts and expenditure during this difficult period; notes that REACT-EU support focused on recovery measures driven by future-oriented priorities, such as the green and digital transitions; highlights that an example of this support is the project Green Change Zealand, which helped 20 SMEs in Denmark reduce their energy and material consumption through green conversion plans;

Future cohesion policy

General principles

14. Insists that, owing to its regional focus, placed-based approach, strategic planning and effective implementation model, cohesion policy should remain the EU’s main investment instrument for reducing disparities, ensuring economic, social and territorial cohesion and stimulating regional and local sustainable growth and that it should continue to be a key contributor to supporting a socially just transition and recovery from symmetric and asymmetric shocks and the fight against climate change;

15. Regrets the reduction in the share of the 2021-2027 MMF dedicated to cohesion, compared to the previous programming period; recalls that the COVID-19 pandemic and the Russian war of aggression against Ukraine have created new disparities between regions; believes that there must be an increase in real terms in the overall cohesion budget and in the MFF’s share of the policy compared to the 2021-2027 programming period;

16. Considers that cohesion investments should remain under shared management for programming and implementation in order to be able to respond to the needs of Member States, regions, and urban, rural and remote areas; acknowledges that co-programming, co-financing, co-responsibility and co-ownership are the most effective methods for the successful implementation of a long-term EU investment policy and EU-financed projects;

17. Underlines that the emergence of budgetary support instruments based on direct management and a simpler delivery model could lead to a renationalisation of cohesion policy and endanger one of its basic principles: multilevel governance; opposes therefore any renationalisation of cohesion policy;

18. Insists that all EU regions should remain eligible for cohesion policy funding; underlines that this is the only way to address regional challenges, to achieve a more balanced development pattern across the EU and to tackle unique regional development problems on the ground;

19. Stresses that the future cohesion policy must continue to pay attention to regions that suffer from severe and permanent natural and demographic limitations, such as sparsely populated areas, islands, mountainous areas and cross-border regions, in full compliance with Article 174 TFEU; notes, in this context, that the EU has drawn up an urban and a rural agenda, and expects the publication of an island agenda as well;

20. Calls on the Council to unblock and start its work on the European cross-border mechanism file;

21. Underlines the importance of applying Article 349 TFEU in all EU policies to achieve the objectives set out therein; recalls the vital role played by cohesion policy in the outermost regions; emphasises the importance of designing and maintaining tailor-made programmes and measures for these regions, as the majority of the outermost regions are still among the less-developed regions or should be treated as such; calls on the Commission to guarantee high co-financing rates, specifically for the outermost regions, by designating all of these regions as less-developed regions for this purpose;

23. Believes that the ‘do no significant harm’ criteria must prevent environmentally harmful measures in order to achieve the goal of a carbon-neutral Europe by 2050 at the latest; calls on the Commission to introduce, in the forthcoming cohesion policy post-2027 legal framework, strict criteria to improve the application of the ‘do no significant harm’ principle; calls furthermore for at least the same level of climate-related spending in the new framework in order to achieve the climate objectives set by the Paris Agreement, and in line with the UN’s Sustainable Development Goals and the European Green Deal;

24. Underlines that the main purpose of the EU's cohesion policy is to reduce disparities among Member States and especially between and within regions in the Member States; underscores that the cohesion policy budget should be primarily used for cohesion policy goals and not for new non-cohesion policy instruments and programmes, either within or outside the MFF, including optional transfers;

25. Acknowledges the need for built-in crisis flexibility; proposes the creation of a dedicated axis for local and regional authorities to address emerging priorities; stresses, however, that the repurposing of cohesion funding should not be triggered by new legislative initiatives by the Commission, but instead should be initiated by a managing authority in a bottom-up process, after mandatory consultations with regional and local authorities and with the appropriate involvement of civil society, as provided for in the Common Provisions Regulation and the Code of conduct on partnership; underlines that this will not erode the multiannual orientation of the policy, but will help it best adapt to the fast-changing nature of our times;

26. Regrets that delays in the MFF negotiations led to considerable delays in the 2021-2027 programming period, impacting beneficiaries and especially management authorities, which faced an enormous burden in dealing with both the finalisation of the 2014-2020 funding period and the start of the current funding period; calls on the Commission, therefore, to assess the legal possibility of creating two distinct parts within the Common Provisions Regulation, namely the content-related part (political) and the MFF-related part (financial resources), for the post-2027 programming period; believes that the content-related part should be negotiated and concluded before the MFF-related part to allow for management authorities to start preparing in a timely manner in order to ensure the principle of genuine partnership and an efficient use of cohesion policy instruments;

27. Warns that the existence of multiple funds with cohesion objectives, sometimes with overlapping priorities, may hinder the effective implementation of cohesion policy; calls for a clear demarcation, as well as for alignment and complementarity, between cohesion policy and other instruments in order to avoid overlaps and competition between EU instruments; insists on the need to enhance such complementarity by bolstering the possibility of financing joint projects;

28. Draws attention to the local, regional and national authorities’ difficulties in recruiting a qualified workforce to implement, manage and audit cohesion policy funds as one of the reasons for delays in the implementation of those funds; calls on the Member States and their regions to launch efforts to train and recruit specialised staff to optimise the implementation, management and auditing of EU funds in the future in order to make those funds as effective and efficient as possible;

29. Notes that, as evidenced by the analyses of the performance of cohesion policy funds, including by the European Court of Auditors, there is room for improving the effectiveness of cohesion policy interventions for delivering on the EU’s overarching priorities and territorial challenges, such as competitiveness or the greening of the economy; believes that a broader response involving more EU policies and an effective targeting of funds will therefore be essential in fighting the geography of discontent;

30. Believes that the legislative proposal for the future cohesion policy should only be released once it takes into consideration the outcomes of a major consultation effort and an EU-wide line-up of events and formats on the ground that bring together all levels of governance and all other stakeholders;

31. Underlines the need for a comprehensive evaluation of the impact of the ESI Funds in the Member States and in the beneficiary regions and municipalities, focusing not just on the level of implementation of the funds allocated, but rather on the transformative nature of the investments and their impact on the economy and employment in the area;

32. Notes that the 2021-2027 regulatory framework has already introduced measures to simplify the delivery and management of cohesion policy; points out that, while real progress has been made, there is still a long way to go in terms of simplifying procedures for final beneficiaries and providing legal certainty for managing authorities; stresses that overlapping controls and audits of funds should be avoided; stresses that further simplification should also enable an accelerated implementation and absorption pace;

33. Underlines, therefore, that simplification should be one of the key drivers of the future cohesion policy; considers it necessary to streamline public procurement procedures, improve the alignment of cohesion policy with State aid rules, increase the use of simplified cost options, implement the single audit principle and identify ‘one-stop shops’ for potential beneficiaries; believes that the application of the rules for extrapolating the error rate creates a disproportionate administrative burden for the managing authorities and asks the Commission to look into revising these rules; calls on the Member States to avoid over-regulation in order to ensure legal certainty for the beneficiaries;

34. Believes that further streamlining of the architecture of EU funding instruments should be achieved across the Cohesion Fund, the ERDF, the ESF+ and the Just Transition Fund, and possibly extended to the EAFRD, as it should be covered by the Common Provisions Regulation; acknowledges that such streamlining would further simplify the programming and implementation of the policy, enhance its visibility and effectiveness, and improve beneficiaries’ access to funding; stresses the importance of streamlining the individual fund-specific regulations in order to minimise increases in implementation delays and programming complexity; notes that any streamlining of funds should preserve their thematic orientation and the financing streams for the respective policy areas;

35. Acknowledges that the performance framework introduced in the 2014-2020 period was an attempt to improve the result orientation of the policy; calls, in this regard, for a thorough modernisation of the delivery model – a shift from an activity-to-payment cycle to a performance-based implementation, based on tangible milestones, together with linkage to local and regional growth-enhancing reforms underscoring the basics of cohesion policy; emphasises that the performance-based approach will not work unless the regional and local level have a say in the definition of the targets against which the success of the policy will be measured;

36. Underlines that such a shift towards performance-based implementation should not undermine transparency, accountability and the protection of the Union’s financial interests; notes that audit and control systems should nonetheless be adapted to the performance-based framework;

37. Calls for a wider use of digital technologies and solutions in the Member States to simplify implementation, monitoring and reporting, hence contributing to more efficient administration and less physical documentation;

38. Notes that public money coming from taxpayers must not be misused; asks the Commission, the Member States and regional authorities to use and enhance existing mechanisms to detect and fight irregularities, fraud and corruption in cohesion policy funding;

39. Calls on the Commission to ensure that all Member States have an effective mechanism for reporting irregularities, in line with Commission Delegated Regulation (EU) 2015/1970; recommends that irregularities be classed as closed on the Irregularity Management System (IMS) only after the missing amounts are also recovered at national level, not only after the irregular sums are returned to the Commission; recommends that the Member States ensure, through data-mining tools such as ARACHNE, that data in the official report of irregularities and fraud in the IMS is cross-checked with the data for the approved projects;

40. Calls on the Commission to improve coordination of the powers of the European Anti-Fraud Office (OLAF) and the European Public Prosecutor’s Office (EPPO) to investigate irregularities and fraud related to cohesion policy funds;

41. Calls on the remaining Member States to join the EPPO in order to enhance the fight against corruption and the misuse of EU funds;

42. Strongly supports the implementation of the rule of law conditionality in all Member States; expects the Commission, therefore, to take rule of law aspects fully into consideration when approving partnership agreements and cohesion policy programmes, so that they are in full compliance with the enabling conditions on the effective application and implementation of the Charter of Fundamental Rights, as outlined in Annex III of the Common Provisions Regulation; further expects the Commission not to approve any partnership agreement or programme until this in-depth analysis of these specific aspects leads to a high level of assurance of no risk;

43. Reiterates the importance of safeguards that would prevent unfair penalisation of the beneficiaries situated in countries that may be subject to the activation of the rule of law mechanism; asks the Commission to consider avenues through which it can deliver the funds to their final beneficiaries;

44. Emphasises that cohesion policy must better adapt to challenges posed by the green, digital and industrial transitions and the social consequences they entail in order to remain relevant and achieve the objectives set out in the Treaties; believes that in order to achieve this, it is important to learn not only from the 2014-2020 funding period, but also from instruments such as the RRF, to address socio-economic challenges linked to recent crises and to provide adequate support to disadvantaged areas and communities;

45. Calls on the Commission, in the post-2027 cohesion policy regulations, to continue to underline the importance of, inter alia, tackling climate change mitigation and adaptation, biodiversity loss and protection of the environment, including better water and waste management, resource and energy efficiency, disaster resilience and risk prevention and management; considers, in this context, that climate mainstreaming and climate proofing mechanisms should be an integral part of programming and implementation, in particular for project selection; reminds the Commission, furthermore, that adequate support, in particular to local and regional authorities, to address socio-economic challenges linked to recent crises and to help disadvantaged areas and communities, should be an important feature in the implementation of funds;