Council adopts €330 billion cohesion package for 2021-2027

The Council gave its final green light to the adoption of the cohesion package for the financial period 2021-2027.

The package is a set of regulations governing the structural and investment funds, which amount to more than €330 billion (in 2018 prices) or nearly one third of the EU’s long-term budget. The funds will finance regional and local projects designed to reduce economic and social disparities between member states and regions, while boosting a sustainable recovery from the pandemic by investing in green and digital priorities.

Cohesion policy is at the heart of European solidarity. It is close to the citizens and its benefits are felt at local level. The legislative package for the next programming period will focus on the challenges of the green and digital transitions, supporting regions, companies and workers along the way.

Nelson de Souza, Portuguese Minister for Planning, Council presidency

The 2021-2027 package follows the established cohesion policy of multiannual investment, with most of the resources going to less developed countries and regions in order to foster social, economic and territorial cohesion across the EU.

However, it simplifies the rules and reflects the new EU priorities of enhancing innovation and digitalisation, transitioning towards a net zero carbon economy, further improving connectivity with strategic transport and digital networks, and focusing on social inclusion.

Overall, around 30% of the structural funds will contribute to the decarbonisation of the economy, with each type of investment activity having a specific climate coefficient. Projects should also respect the ‘do no significant harm’ principle, in line with the EU’s environmental goals.

The package consists of an overarching piece of legislation setting up the rules for eight funds jointly managed by the member states and the Commission – the common provisions regulation – and several other regulations defining the specific objectives and scope of each fund.

The main cohesion policy funds are:

  • European Regional and Development Fund (ERDF) – €200 billion for regional funding with tailored support for certain regions and areas and increased focus on cities and sustainable urban development; supporting competitiveness and job creation in small and medium-sized enterprises. Funded by ERDF, the Interreg programme will spend over €8 billon on cross-border projects to help border regions develop their full economic potential
  • Cohesion Fund – €42.5 billion for member states whose per capita GNI is below 90% of the EU average; supports trans-European transport networks as well as energy and transport projects benefitting the environment
  • European Social Fund Plus (ESF+) – €88 billon to support job creation, education and training, as well as social inclusion

Next steps

The adopted Council’s first reading positions on the regulations still need the formal confirmation vote by the European Parliament plenary (expected by the end of June) before they are published in the Official Journal of the European Union. The regulations will enter into force on the day after their publication.