On possibilities for simplification of cohesion funds

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on possibilities for simplification of cohesion funds

(2024/2106(INI))

The European Parliament,

– having regard to Articles 4, 162, 174 to 178, and 349 of the Treaty on the Functioning of the European Union (TFEU),

– having regard to Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (Common Provisions Regulation),

– having regard to Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund,

– having regard to Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund,

– having regard to Regulation (EU) 2021/1059 of the European Parliament and of the Council of 24 June 2021 on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments,

– having regard to Regulation (EU) 2021/1057 of the European Parliament and of the Council of 24 June 2021 establishing the European Social Fund Plus (ESF+) and repealing Regulation (EU) No 1296/2013,

– having regard to Regulation (EU) 2020/460 of the European Parliament and of the Council of 30 March 2020 amending Regulations (EU) No 1301/2013, (EU) No 1303/2013 and (EU) No 508/2014 as regards specific measures to mobilise investments in the healthcare systems of Member States and in other sectors of their economies in response to the COVID-19 outbreak (Coronavirus Response Investment Initiative),

– having regard to Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005,

– having regard to Commission Delegated Regulation (EU) No 240/2014 of 7 January 2014 on the European code of conduct on partnership in the framework of the European Structural and Investment Funds,

– having regard to its resolution on of 16 January 2024 on the implementation of territorial development (CPR, Title III, Chapter II) and its application in the European Territorial agenda 2030,

– having regard to the opinion of the Committee of the Regions of 24 January 2025 entitled ‘EU budget and place-based policies: proposals for new design and delivery mechanisms in the MFF post-2027’,

– having regard to European Court of Auditors special report 22/2024 of 21 October 2024 entitled ‘Double funding from the EU budget – Control systems lack essential elements to mitigate the increased risk resulting from the RRF model of financing not linked to costs’,

– having regard to European Court of Auditors special report 13/2024 entitled ‘Absorption of funds from the Recovery and Resilience Facility – Progressing with delays and risks remain regarding the completion of measures and therefore the achievement of RRF objectives’,

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the opinions of the Committee on Budgets and the Committee on Budgetary Control,

– having regard to the letter from the Committee on Employment and Social Affairs,

– having regard to the report of the Committee on Regional Development (A100000/2025),

A. whereas cohesion policy is the EU’s most important investment tool to reduce social, territorial and economic disparities, and its long-term character should not be jeopardised by emergency measures and amendments aimed at re-purposing cohesion funds for other priorities;

B. whereas local and regional authorities (LRAs) are key partners in delivering the EU’s political agenda because they are responsible for 54 to 58 % of the total volume of public investments carried out by governments;

C. whereas the current 2021-2027 programming period has a reduced list of policy objectives, and a clearer intervention logic through indicators, lighter reporting requirements and a single audit arrangement;

D. whereas, however, managing authorities, intermediary bodies, beneficiaries and citizens still face significant administrative burdens and challenges that not only affect the implementation rate of the projects but also undermine the credibility, visibility and perception of cohesion policy as a whole;

E. whereas the evolving and complex regulatory environment has played a decisive role in the current low implementation rate of cohesion policy in all Member States;

F. whereas simplification measures should entail a balance between the need for better accessibility to funds and the protection of the EU budget and should take into due consideration concerns and inputs from institutional and non-institutional stakeholders;

G. whereas shared management, the partnership principle, multi-level governance, subsidiarity and a place-based approach should remain the cornerstone of any reform and simplification of cohesion policy;

H. whereas technical simplifications in territorial development tools (such as Integrated Territorial Investment (ITI), and Community Led Local Development (CLLD)) have already been integrated in the cohesion policy framework for the 2021-2027 programming period, but small projects still have proportionally higher administrative burdens (for beneficiaries) and administrative costs (for programme authorities) than larger projects;

I. whereas the principle of a single audit should be strengthened, and measures should be implemented to reduce duplicate controls and audits that overlap with national oversight for the same project and beneficiary;

1. Recalls the fundamental role cohesion policy has played in addressing multi-dimensional emergencies and challenges over the last five years and stresses the need to keep its long-term investment and place-based rationale and priorities;

2. Acknowledges the important simplification measures already introduced in the 2021-2027 programming period, but considers that several factors, including frequent changes to regulations, as well as gold-plating, have partially weakened this simplification;

3. Calls on the Commission to promote a bottom-up approach in the upcoming proposals for simplifying the design of the new cohesion policy, ensuring the mandatory consultation and involvement of LRAs, civil society organisations and small and medium-sized enterprises;

4. Considers that fewer different funds, a single set of rules for implementation, monitoring and control, as well as a single integrated IT interface for beneficiaries could pave the way for a more flexible policy and could enhance the possibility to shift funds to different priorities during the programming period without the need for changes to the regulatory framework;

5. Points out that the active and obligatory involvement of LRAs in the preparation, programming, implementation, delivery, monitoring and evaluation of projects in the areas they administer is a fundamental pre-condition for successful and tailored simplification;

6. Calls on the Commission to explore the inclusion of a territorial and governance impact assessment in the European Semester and the proposal of a broader set of well-being indices and indicators that could complement GDP in the distribution key, with the aim of further reducing disparities, including at intra-regional level, and of enabling better targeted investments where they are needed most;

7. Suggests exploring different options for the mandatary allocation of a certain share of the cohesion policy budget to both CLLD and ITI;

8. Opposes any form of top-down centralisation reform of the cohesion policy; acknowledges, however, some positive elements currently being developed within the Recovery and Resilience Facility, but draws attention to the fact that in programmes under direct management, the disbursement of funds to Member States does not necessarily reflect the quantity and importance of the milestones and targets included therein; stresses that the centralised model has highlighted several critical issues, including regarding the traceability of EU funding;

9. Acknowledges that performance-based mechanisms can be instrumental in making the cohesion policy more efficient and results-orientated, but cautions against the one-size-fits-all imposition of this model in the context of the new 2028-2034 programming period, taking into due consideration the specificities of different spending sectors, especially in projects related to research and social issues;

10. Acknowledges that liquidity problems deter potential beneficiaries such as municipalities from applying for cohesion policy funded projects and therefore calls for a significant and tailored increase in pre-financing in such cases;

11. Expresses its concern about the regular reports from stakeholders on the lack of application of horizontal principles by Member States in the preparation of partnership agreements; suggests that a revised European Code of Conduct should be integrated directly into the Common Provisions Regulation (CPR) to ensure its binding nature;

12. Calls on the Commission to propose further measures to prevent and avoid double funding, to ensure the interoperability of data-mining tools, and to ensure a balance between simplification and protection of the EU budget;

13. Recommends the setting up of a simplified and streamlined mechanism with the aim of ensuring direct funding for cities in the next multiannual financial framework and including smart conditionality;

14. Stresses the need to increase investments in building effective administrative capacity, especially in LRAs, with a view to encouraging effective decentralised management and implementation of EU funds, and highlights that cohesion policy outcomes rely on forward-looking and inclusive strategy, on proper stakeholder involvement and on good governance;

15. Considers that a new approach to audit and controls should be enshrined in the next cohesion policy, introducing preventive controls executed at the beginning of the budgetary perspective to detect and eliminate the possibility of repeating potential errors in subsequent years of implementation;

16. Calls on the Commission to explore different options for consolidating funds, including by reintegrating a revised EAFRD into the CPR;

17. Instructs its President to forward this resolution to the Council, the Commission, the European Economic and Social Committee, the Committee of the Regions and the national and regional parliaments of the Member States.

EXPLANATORY STATEMENT

The rapporteur acknowledges the improvements introduced in the 2021-2027 programming period, such as a reduced list of policy objectives, a clearer intervention logic through indicators, lighter reporting and the implementation of the single audit.

Despite these advancements, managing authorities, intermediary bodies, beneficiaries, and citizens continue to face significant administrative burdens. “In some Member States, Cohesion Policy funding is avoided in favour of less complex and less risky domestic funding”. This quote, which comes from the report of the High-Level Group on the Future of Cohesion Policy (February 2024), unveils an uncomfortable, yet currently widely spread perception of the policy on the ground. Frequent regulatory changes and the practice of gold-plating - where additional national rules are imposed on top of EU laws - have partially undermined simplification efforts. Moreover, small projects continue to bear disproportionately higher administrative burdens for beneficiaries and greater administrative costs for programme authorities compared to larger projects. Such situations negatively affect the credibility and public perception of cohesion policy, which is currently also coinciding with a programming period that has been already heavily delayed and modified at legislative level due to global geopolitical and health crises. Low visibility and a lack of knowledge of the source of cohesion-funded projects amongst citizens is another aspect that needs to be remedied in future funding cycles to improve the awareness of EU funds and their positive impact on the ground. While it is historically normal that the implementation rate of funds in the first half of any MFF, ahead of the mid-term review, is rising more slowly compared to its second half, further simplification measures are nevertheless necessary to enhance the policy’s efficiency. The EU needs a more stable way of realising cohesion policy that alleviates the pressure of such waves of intensity in implementation that are partially caused by too complex regulations and rules, as the concentration of projects in the final years of the programming cycle is problematic not only at an economic level, but also with regards to inflation and quality management.

The rapporteur emphasises that simplification measures must strike a balance between ensuring easier access to funding and protecting the EU budget. Furthermore, these efforts should always align with the core principles of cohesion policy, including shared management, the partnership principle, multi-level governance, subsidiarity, and the place-based approach.

Through this draft report, the rapporteur puts forward several recommendations. These include promoting a bottom-up approach, reducing the number of Funds, establishing an integrated IT interface for beneficiaries, and introducing a broader set of well-being indices and indicators to complement GDP. Other proposals include earmarking cohesion resources for integrated territorial development tools such as CLLD and ITI, exploring the mandatory enforcement of a revised European Code of Conduct on Partnership, reducing redundant controls and audits that duplicate national oversight for the same projects and beneficiaries, and considering direct funding for cities. Additionally, the rapporteur opposes any form of top-down centralisation of cohesion policy while acknowledging certain positive elements within the RRF.

The rapporteur believes that enhancing simplification is essential to strengthening cohesion policy as a whole. He also highlights that this policy has played a fundamental role in addressing the multi-dimensional emergencies and challenges of the past five years. In this context, the rapporteur underscores, however, the need to uphold the long-term investment, solidarity, and place-based principles that define cohesion policy. He also advocates for the continued and obligatory involvement of local and regional authorities at all stages, including programming, implementation, delivery, monitoring, and evaluation of projects.

With this draft report, the rapporteur aims to contribute meaningfully and constructively to the discussion on the future cohesion policy, particularly in light of the forthcoming Commission proposal on the Multiannual Financial Framework 2028-2034 and the accompanying legislative package of sectoral proposals.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur declares that he received input from the following entities or persons in the preparation of the draft report:

The list above is drawn up under the exclusive responsibility of the rapporteur.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur declares that he has submitted to the concerned natural persons the European Parliament’s Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.