With under a year to go before the Commission presents proposals for the next MFF and the future of Cohesion Policy, the reform debate is intensifying. Cohesion Policy is in a weak position given its poor implementation record in 2021-27 with slow absorption (only 5 percent of payments by September 2024) and a rising error rate (6.7 percent in 2022) leading the ECA to question its approach to assurance. The RRF has made quicker progress in terms of disbursement of funding, but an assessment of performance is not yet possible. Risks to timely absorption include the significant number of milestones and targets still to be fulfilled, and administrative costs have increased over time. Looking forward, the EU is seeking ways to strengthen its industrial and technological base and economic resilience, ensure better connectivity and improved productivity, in order to achieve strategic autonomy. These are key priorities for the next MFF along with acceleration of the green and digital transitions, dealing with demographic challenges and enhanced security. However, the gap between EU ambitions and the funding available is evident from the difficult discussions over the Mid-Term Revision of the current MFF for the period 2024-2027. Developing and funding a strategy for enlargement is a further challenge. Much will depend on the approach by the new Commission and a European Parliament with a different political balance. The Commission President is looking for an MFF for 2028-35 that is: more focused on EU priorities and objective; simpler with fewer programmes and investment linked to reforms; and more impactful, focusing more on competitiveness. Radical changes to the MFF have been suggested, potentially merging all shared management funds. For Cohesion Policy, the Commission is seeking a more place-based approach, tailoring intervention to the specific development needs of territories (including development traps), defending multilevel governance and the role of subnational authorities, greater coherence with other EU and national policies, a more performance-based delivery model, combining reforms and investments putting more emphasis on institutional capacity building. Indeed, DG Budget is considering a radical reshaping of the MFF, merging Cohesion funding with other shared management funds and delivery through national plans/programmes. At this stage, most Member States have not published their official positions on the reform, but some indication of the national and subnational thinking is provided by EoRPA research, including their perceptions of the added value of the policy and views on the recommendations in the HLG report. This paper examines the current state-of-play of Cohesion Policy and its future reform beyond 2027. It begins with an overview of the political and policy context for Cohesion Policy. It reviews the current state of play for programming in 2021-27 and also progress with the Recovery & Resilience Facility, which offers an alternative model for implementing EU funding. The paper then discusses the political and policy debates around the current and future MFFs before focusing on the agenda for Cohesion Policy, reviewing the emerging policy positions of the EU institutions and Member States. The final section discusses the key challenges and questions facing Cohesion Policy in the future The paper concludes by discussing five important questions:
a) the place of Cohesion and Cohesion Policy in the new MFF; b) the design of a strategic framework to ensure more coherence across EU policies; c) the changes needed at Member State level to ensure that EU strategic priorities are implemented effectively; d) how the place-based approach of Cohesion Policy should be strengthened; and e) the lessons from the experience of implementing NRRPs are applicable to Cohesion Policy to achieve simpler and more results-based management.