At its September session, the European Parliament voted in favor of reforms to the EU’s cohesion and social funds. The changes will allow member states to allocate resources to new priorities, including the development of the defense industry, dual-use infrastructure, and resilience against water shortages. The reform introduces greater flexibility in how funds are used, a principle likely to remain in the next financial perspective. However, the structure of the future budget proposed by the European Commission has already sparked significant opposition in Parliament.
Cohesion Policy in Numbers
The EU’s cohesion policy for 2021–2027 amounts to €392 billion, financed through dedicated instruments such as the Cohesion Fund (CF), the European Regional Development Fund (ERDF), and the European Social Fund Plus (ESF+). Poland received more than €76 billion, including €3.8 billion from the Just Transition Fund (JTF).
“We have introduced new priorities into the cohesion policy, which applies until 2028. Parliament, together with the Council and the Commission, decided to include defense, support for the arms industry, and—above all—SMEs producing so-called dual-use products, serving both civilian and military markets,” explained Krzysztof Hetman, MEP from the Polish People’s Party (PSL).
Defense, Security, and Climate as New Priorities
The reform enables member states and regions to redirect part of their cohesion funds to finance the defense industry, military mobility, and dual-use infrastructure. Funds may also support civil preparedness, defense skills, cybersecurity, and decarbonization initiatives.
Cohesion policy will continue to focus on small and medium-sized enterprises and less advantaged regions. Large companies may only receive support for projects in defense, technology, or decarbonization if they are located in areas with GDP per capita below the EU average.
“This is a major success for Poland. Just two or three years ago, the Commission was reluctant to even consider such financing. We managed to persuade both the Commission and our partners in Parliament,” Hetman emphasized.
Other new goals include investments in water resilience and energy infrastructure, especially in transmission and storage capacity.
Special Support for Border Regions
Regions that redirect at least 10% of program funds toward new priorities will receive an advance of 1.5% of total Cohesion Fund support. For EU regions bordering Russia, Belarus, and Ukraine, this bonus rises to 9.5%.
“These are regions such as Eastern Poland, but also Finland, the Baltic States, Slovakia, Hungary, and Romania—areas facing uncertainty, threats, and capital outflow. We decided to provide them with greater support,” Hetman said.
To accelerate implementation, funds redirected in 2026 will benefit from a one-off 20% advance payment, while co-financing levels will increase by 10 percentage points (without exceeding 100%).
Debate Over the Next EU Budget
The principle of flexibility is expected to be retained in the 2028–2034 budget. Yet the Commission’s July budget proposal—set at €2 trillion, or 1.26% of EU gross national income—has already drawn criticism in Parliament.
“The main assumption is cuts—45% less for cohesion compared to the current perspective. This would hit farmers, cities, and regions,” warned Waldemar Buda, MEP from Law and Justice (PiS).
Buda argued that new priorities should be funded with new resources, not at the expense of cohesion or the Common Agricultural Policy (CAP). He also opposed the plan to earmark €100 billion for Ukraine as a fixed budget line.
“Never before has a third country been guaranteed budget funds in this way. Support Ukraine, yes—but not by locking in such allocations. Meanwhile, there is no adequate focus on Europe’s own industries, like heavy industry struggling with energy costs,” Buda stressed.
CAP and Agricultural Concerns
Parliament also debated the post-2027 Common Agricultural Policy. MEPs called for a larger, separate budget for agriculture, less bureaucracy for farmers, and stronger incentives for meeting environmental and social goals. They insisted that CAP funds must remain distinct and not merged into broader financing categories.
“Poland should maintain streams of funding for both regions and farmers—these are the EU’s two most important policies. Of course, we can discuss flexibility for new goals, but we need less Green Deal, fewer climate targets, and more focus on real economy, technology, science, and stable rural development,” Buda added.
New Revenue Streams
The Commission’s proposal also includes new EU-wide revenue sources worth €58.5 billion annually, such as:
- proceeds from the Emissions Trading System (ETS),
- the Carbon Border Adjustment Mechanism (CBAM),
- and excise taxes on tobacco products.
Meanwhile, €200 billion is earmarked under the Global Europe program to support candidate countries and other EU partner states. Military-related support will continue to be funded via the European Peace Facility.
