As the negotiations on the future of the EU budget and the reform of Cohesion Policy enter the final phase, there is progress on the structure of the MFF, and the shape and content of the sectoral legislative package, but the amount and distribution of resources are still open. Complicating factors are uncertainty over the budgetary implications of Brexit and the policy agenda of the new Commission. The ambition of finalising MFF negotiations by end 2019 has been superseded by deadlines under the Croatian or even German Presidencies.
Many of the regulatory blocks for ESIF in 2021-27 have been agreed by the Council. Financial issues that remain open will only be resolved during the final political negotiations, notably the level and distribution of funding, macro-economic conditionalities, n+2 and co-financing rates. The proposed conditionality relating to the rule of law is particularly contentious.
Trilogues with the European Parliament have been undertaken for those blocks with Council mandates. There are important inter-institutional differences on key issues – notably the size of the MFF but also inter alia co-financing rates, pre-financing, inter-fund transfers and Interreg funding.
With the delay in finalising the MFF, the outcomes for post-2020 Cohesion Policy expenditure (published by the Commission in 2018) would be affected by updated data for key indicators. This could have a significant effect on national allocations, with gains or losses for individual Member States.
While the EU negotiations continue, programming preparations for 2021-27 have been gathering momentum at national and regional level with different speeds and levels of political and public engagement and debate. European Commission guidance on future Cohesion Policy investment priorities and factors for effective delivery were published in early 2019 as part of the European Semester country reports.
In this context, it is interesting that the Just Transition Mechanism explicitly recognises the ‘significant challenge to some territories’ involving economic restructuring, new business models and new skills requirements which have to be addressed in a way that ‘leaves no one behind’. This is clearly welcome but it begs the question of why the EU has not given the same prominence to the other ‘transitions’ affecting EU regions with similarly profound economic and social consequences. In both designing and negotiating the MFF, the EU has arguably missed a huge opportunity to put the goal of cohesion centre stage, respond to political alienation, and demonstrate that a central purpose of the Union, its institutions and policies is to address both territorial and social inequality, and that citizens wherever they live will not be left behind.