The European Union (EU) has set new priorities to respond to new challenges such as climate change, migration and security while Brexit risks unbalancing the EU budget. Ahead of the post-2020 Multiannual Financial Framework (MFF), there are heightened demands for Cohesion Policy (CP) funding, also referred to as European Structural and Investment Funds (ESI Funds), to be reduced in the EU funding strategy, either in line with the overall budget reduction or, more radically, as a lower share of the total budget than was the case in previous programming periods. Comprising 34% of EU expenditure, the reform of Cohesion Policy will represent a major element of the upcoming MFF debate.
In this context, there is a growing consensus that CP – its objectives, conditionalities and budget allocation – must be reformed to address today’s needs. There is no agreement, however, on the nature of a possible reform. A wide range of proposals have emerged on how the ESI Funds could be increasingly tied to European values (e.g. respect of the rule of law, integration of migrants) or economic governance objectives (e.g. EU growth targets or the reduction of fiscal and macroeconomic imbalances). The community in charge of implementing CP (referred to as the ‘CP community’) is concerned that proposed reforms may result in additional responsibilities that risk diluting – or further complicating the realisation of – the original mandate of economic, social and territorial convergence.
A critical element of the future CP debate will be the proposal to bolster the link between ESI Funds and the EU’s enhanced economic governance system, a set of rules and conditions that have been adopted during the eurozone crisis.
This study draws on desk research, a series of semi-structured interviews and data gathered during a workshop held on 31 May 2017 at the European Policy Centre (EPC). It examines the scope for strengthening the link between Cohesion Policy and EU economic governance objectives in the next Multiannual Financial Framework by looking more specifically at two instruments: ex-ante and macroeconomic conditionalities.
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