This article was the Topic of the Week in the Newsletter of Week 30 in 2025.

As early as the 1960s, with the establishment of the European Social Fund (ESF), political decision-makers in Europe recognized: A single market only works with strong regions. This fundamental belief remains the foundation of the EU cohesion policy to this day. Its goal is to strengthen economic, social, and territorial cohesion within member states and reduce regional disparities. Today, this policy accounts for almost one-third of the EU budget. Many stakeholders are therefore eagerly awaiting July 16, when the EU Commission will present its proposals for the Multiannual Financial Framework (MFF).

Comprehensive Reforms Planned

The MFF defines how much money can be spent in various policy areas over a seven-year period. The next period – 2028 to 2034 – is the subject of extensive discussions. The future of cohesion policy, in particular, is in focus – not only due to possible financial cuts, for example, in favor of increased needs for defense spending. The future role of regions is also under scrutiny.

Known pre-considerations by the Commission, particularly regarding proposals to centralize cohesion fund administration more strongly, are being intensively debated. Such a shift in responsibilities from the regional to the national and European levels would, however, restrict the flexibility of the regions – the key players who know their own needs best. This would result in less targeted and practical measures on site.

Reducing Administrative Burdens

Companies seeking funds from programs like the European Regional Development Fund (ERDF), the ESF, or other cohesion policy funds often encounter high administrative burdens during the application process. Procedures should therefore be systematically standardized and digitalized. Pragmatic improvements, greater flexibility, and targeted business support are required to make accessing the programs easier. Additionally, effectiveness reviews and audits in their current form must be scrutinized: Effective control of fund usage remains essential – but should be efficient, focused, and unbureaucratic.

Strategic Alignment of Cohesion Policy

In addition to structural reforms, a content-related realignment is necessary. In the past, the focus of cohesion policy expanded increasingly – from purely being an internal market tool to encompassing a "mixed bag" of political mandates. Now is the right time to refocus on clear and impactful core objectives. Key approaches should include strengthening competitiveness and innovation capacity, creating attractive conditions for businesses in the regions, targeted infrastructure investments, fostering skilled workforce development, and prioritizing educational measures. Furthermore, more adaptable and thus realistic program planning is required. The balance between flexible crisis reaction and predictability for businesses remains crucial.

Especially with regard to Europe's innovation capacity, cohesion policy can also provide significant impetus. Modern infrastructure and successful skilled workforce development create the right conditions for sustainable economic development.

What Comes Next?

In the coming months, European, national, and regional stakeholders will engage intensively with the topic. Following the EU Commission's proposals, negotiations with the EU Parliament and Council will ensue. The final agreement has to be unanimously approved by the member states and confirmed in majority decision by the EU Parliament.

One thing is clear: The interests of the trade economy must not be overlooked during this process. Strong regions form the cornerstone for successful businesses.