To what extent should regional EU funding be conditional on national reforms?

The European Commission’s proposal to introduce National and Regional Partnership Plans (NRPPs) for the 2028-2034 European Union budget marks a major restructuring of EU spending. By merging cohesion, agricultural, migration and security objectives into a single framework, the NRPPs aim to reduce overlaps and improve efficiency. Spending would be governed by a new performance framework designed to ensure that EU funds deliver agreed results.

A central controversy is whether regional cohesion funding should depend on national level reforms, as suggested in the Commission’s proposal. In a new paper, we argue that this type of conditionality can be appropriate, but only in specific cases.

Cohesion funding mainly supports local goods: infrastructure, social inclusion initiatives, labour market programmes and regional development. Linking spending to national reforms that are unrelated to local objectives, such as pension or judicial reforms, would not make sense, as meeting conditions should be within the control of the implementing regional authorities. Moreover, most national reform requirements are shaped by the Commission, even when they concern areas of domestic competence. Using cohesion funds as leverage in such cases raises democratic concerns and could be perceived as Commission overreach.

We identify two scenarios in which national conditionality could be justified. First, when a national reform would directly strengthen the local impact of cohesion spending. For example, if a region aims to increase women’s labour-market participation, a national childcare reform could improve the effectiveness of locally funded measures.

Second, conditionality may be justified when a national reform generates clear cross-border benefits. For instance, a pension reform in a highly indebted country can enhance fiscal sustainability and reduce the risk of a fiscal crisis that harms other EU countries.

To work, national conditionality must be selective and legitimate. The EU can ensure this by involving regional stakeholders and the European Parliament in decisions on conditionality.

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