National plans, regional voices: cohesion policy in the next European Union budget

Executive summary

For the 2028–2034 European Union budget (Multiannual Financial Framework, MFF), the European Commission has proposed to integrate cohesion, agricultural, migration and security policies – until now, standalone budget components – into a single framework, structured around National and Regional Partnership Plans (NRPPs). Some EU spending would also be reallocated from cohesion and agriculture to competitiveness, defence and external action, while the rules for disbursing cohesion and agriculture spending would link spending to national-level reform.

This policy brief assesses this proposed re-organisation of cohesion policy against the criterion of European added value. We argue that the NRPP structure is conceptually sound. Integrating multiple policy areas within unified plans can reduce long-standing overlaps and coordination failures and support more strategic investment choices. There is scope to strengthen performance-based budgeting, including by using national reform milestones in certain cases. Finally, selective reduction of cohesion funding is justifiable. 

However, some significant changes should be made to the Commission’s proposal. Sub-national cohesion spending should be made conditional on national reform only if such reforms have beneficial local impacts or generate cross-border benefits. Policy-specific requirements should only apply to measures within that policy area. The Council of the EU and the European Parliament, rather than the Commission, should approve milestones and targets. The European Parliament should also participate in the approval and modification of NRPPs.

A robust methodology is needed to ensure that milestones and targets are sufficiently ambitious across all plans, and that plans have a clear results focus. The consistency of regional and national objectives needs to be assured, and the derivation of national milestones and targets clarified. Independent evaluation is needed of NRPPs, the Commission’s assessments of NRPPs and the actual results achieved. Minimum thresholds should be set for inclusion of cross-border projects. Addressing these issues during MFF negotiations will be crucial to ensure that NRPPs enhance the European added value of cohesion policy.

On 16 July 2025, the European Commission set out proposals for the 2028-2034 European Union budget, potentially triggering a major overhaul. The current framework is organised under seven headings, each of which involves various funds, targets and disbursement criteria. Cohesion policy – which supports smarter, greener, connected, social and local development throughout the EU, but especially in poorer regions – and agricultural policy each receive about a third of the current budget. The new proposal would reduce the number of headings to four and the number of spending programmes from 52 to 16¹. It also seeks to simplify and harmonise EU budget rules, extend budget flexibility and strengthen performance assessments. It would steer EU spending away from agricultural and cohesion policies, and put greater emphasis on competitiveness and defence spending.

The proposed four headings are: 

1. National and Regional Partnership Plans (NRPPs), which would bring cohesion, social, regional, agricultural, fisheries, maritime, migration, border management, and internal security policies into a single framework;

2. Competitiveness, prosperity and security: focusing on research, competition and defence;

3. Global Europe, relating to external action;

4. European public administration.

NRPPs, which would be drawn up by EU countries and regional authorities, would mark a move away from policy implementation via various funds, often with different rules. Instead, a single fund would be established, with streamlined and harmonised access rules. Plans per EU country would improve coordination across the policy areas (see European Commission, 2025a, for the proposal for a law to establish the NRRPs; we refer to this hereafter as the draft NRPP regulation). The remaining headings would involve centrally managed spending by the European Commission. NRPP management would be shared between the Commission, national governments and regions, similarly to cohesion funds in the current EU budget cycle – the Multiannual Financial Framework (MFF).

The proposed switch to NRPPs has been criticised. In October 2025, the European Parliament threatened to reject it unless major changes are made. The European Commission subsequently signalled amendments but has not issued a revised proposal². The Commission has also suggested early access to Common Agricultural Policy (CAP) funds to facilitate the approval of the Mercosur trade deal³. Talks on the proposal are ongoing and adoption of negotiation positions by the European Parliament and Council of the EU is expected towards the end of 2026.

In this context, this Policy Brief analyses the planned switch to NRPPs. We assess a number of criticisms of the plan raised by EU bodies⁴:

1. The plan would reduce cohesion policy funding substantially;

2. The plan lacks minimum funding requirements for certain categories of European regions that are currently receive dedicated EU funding;

3. NRPPs would combine multiple policy areas, rather than maintaining dedicated budgets;

4. Cohesion policy would suffer ‘re‑nationalisation’ through the centralisation of NRPP preparation, implementation and monitoring;

5. The European Parliament would be excluded from approval and modification of NRPPs, and from decisions on programming flexibility and adjustments; and

6. Sub‑national cohesion policy investments would be made conditional on unrelated national reforms.

The fifth point is a valid criticism. The sixth has some merit. But the other points are unpersuasive. We also highlight other aspects of the Commission proposal that would benefit from improvement. These relate to the aggregation of regional targets into national plans, the design of the performance framework and its targets, the independence of the plan evaluation process and the role of cross-border projects.

Section 2 provides background and explains how we assess cohesion spending. We then evaluate the six criticisms listed above (sections 3.1 to 3.6) and highlight issues that have received far less attention (section 4). Section 5 sets out recommendations.

The EU budget equals about one percent of GDP, whereas spending by EU national governments, excluding interest, averages over 47 percent of GDP. This implies a need to concentrate scarce EU funding on European public goods (EPGs) that cannot be delivered efficiently at national level. EPGs have a public character (undersupplied without public intervention and non-rival and non-excludable in consumption) and should be provided at EU level to internalise externalities and realise economies of scale, while taking local preferences into account (Claeys and Steinbach, 2024).

EU cohesion policy aims to promote economic convergence, competitiveness, the green transition, labour market integration and social inclusion, in particular in economically lagging regions. Rather than being an EPG as such, cohesion spending reflects an EU-level policy preference (Darvas et al, 2025)⁵. There are no clear economies of scale to be identified in cohesion spending. However, some cohesion spending components provide EPGs as a secondary effect, such as cross-border infrastructure projects and climate spending. Darvas et al (2025) concluded that less than half of current EU cohesion policy spending contributes to EPGs.

The rest of current cohesion spending is best characterised as integration-oriented redistribution, driven primarily by political commitments rather than by efficiency gains. Because redistribution within the EU transfers resources from richer to poorer countries, it cannot be nationalised, even if the spending provides national or local goods. We thus see space for cohesion policy in the EU budget, conditional on accepting the desirability of redistribution.

To incorporate cross-border considerations and exploit efficiency gains, EPGs should generally be funded and managed centrally⁶. To deliver integration-oriented redistribution however, shared management between the EU and national/regional authorities is appropriate. This is because spending decisions should follow objectives agreed at EU level, but understanding how best to reach these objectives requires information that may be available only to national and/or regional authorities. Addressing this information asymmetry requires a performance-based budgeting framework. Without it, cohesion funds might be spent in ways that respond to local and national political incentives, which may not be aligned with the EU-level integration objective.

Reflecting this concern, cohesion policy in the current MFF already incorporates elements of performance-based budgeting (Box 1). The main difference between this and the proposed NRRP framework is the possibility of withholding funds if targets and milestones are not reached.

3.1 Reduction in cohesion policy funding

The spending allocation for cohesion policy (including regional policy) in the 2028-2034 MFF will likely be less than previous periods (Table 1). In 2028-2034, a minimum of €218 billion would be reserved for less-developed regions (European Commission, 2025a). A separate €10 billion would be allocated to Interreg, a component of cohesion policy that aims to stimulate cooperation across regions. Minimum amounts are also reserved within the NRPPs for certain CAP interventions (€296 billion) and for migration and border management (€38 billion). 

That leaves €235 billion available for allocation to cohesion, agriculture, and migration, border-management and other priorities, with decisions on this money left to national discretion. Cohesion spending as a share of gross national income would remain unchanged in 2028-2034 only if the entire unallocated €235 billion went to cohesion policy. This is unlikely, meaning cohesion spending should drop.

Table 1: Cohesion policy commitment appropriations

^{Source: Bruegel based on European Commission. Note: the United Kingdom during its EU membership is excluded. Cohesion policy commitments include the ERDF, ESF+, Cohesion Fund, Interreg, Youth Employment Initiative and Just Transition Fund. Constant-price euro values for the 2014-2020 and 2021-2027 MFFs were calculated using the Harmonised Index of Consumer Prices for the EU. For 2028–2034, the lower bound reflects the sum of the proposed minimum allocation for less-developed regions and Interregional spending, while the upper bound assumes that EU countries direct all unallocated amounts to cohesion policy.}

Is the planned reduction in cohesion policy spending desirable? While the overall allocation of EU budget funds to cohesion policy is a political decision for EU governments and the European Parliament, there are three arguments for reducing cohesion spending in a context of scarce resources and competing priorities.

1. There is likely substantial scope for improving the effectiveness of cohesion spending (von Ehrlich, 2024, Darvas et al, 2019a). It should be possible to make cohesion policy more impactful by allocating funds more efficiently, despite their reduction.

2. Differences in NUTS 2⁷ regional GDP per capita were less in 2023 than two decades earlier, as reflected in the convergence of both more-developed (from above) and less-developed regions (from below) to the EU average (Figure 1)⁸. Narrower gaps could justify lower funding.

3. More than half of cohesion spending does not correspond to EPGs (section 2). At a time of pressing spending needs in other areas, reducing non-EPG spending in the EU budget is reasonable.

The Commission is thus justified in reallocating some funds away from cohesion policy (and also from agricultural policy) towards EPG spending – such as competitiveness. Furthermore, EU countries would still have the option to spend substantial EU funds on cohesion policy, rather than other spending items covered in spending heading 1 (section 1), such as agriculture, migration or security spending.

Figure 1: Regional GDP per capita at PPS relative to EU average (%)

^{Source: Bruegel based on Eurostat (nama_10r_2gdp for GDP per capita at purchasing power standards (PPS) and demo_r_d2jan for population at the NUTS 2 regional level). Note: UK is excluded; Portugal is excluded due to missing data. We use the 2003 classification of NUTS 2 regions into less-developed (less than 75% of EU average GDP per capita at PPS), transition (between 75% and 100% of EU average) and more-developed (more than 100% of EU average) in the full sample period to avoid compositional changes. Among the 234 NUTS 2 regions for which data is available for 2003-2023 period, 64 are less-developed, 60 are transition and 110 are more-developed. Within each regional group, we use population data as weight to calculate the regional average GDP/capita. The EU average was calculated from regional data covering the 234 regions using population weights.}

3.2 No minimum funding for transition and more-developed regions

Unlike the 2021-2027 MFF (see the appendix), the Commission’s 2028-2034 proposal does not set allocations for transition and more-developed regions. It only sets minimum allocations for less-developed regions and Interreg. However, the proposal requires governments to reduce disparities in transition and more-developed regions, and to allocate part of the unassigned €235 billion to such regions.

It also requires NRPPs to specify how challenges faced by all categories of regions will be addressed, as well as challenges identified in the planned use of integrated territorial investment, community-led local development or other territorial tools. Regions must be involved in NRPP preparations (see section 3.4).

This approach makes sense. Since the main objective of cohesion policy is help poorer regions catch up, a minimum allocation for less-developed regions is appropriate. This argument does not apply for higher-income regions. The non-quantitative requirements related to regional challenges ensure that the specific challenges of regions that are not less-developed are incorporated in the plans.

A possible justification for setting minimum funding levels for transition and more-developed regions would have been to require this spending to serve EPGs. However, in the 2021-2027 MFF, these regions undertake only limited EPG-related spending: no ESF+ expenditure contributes to EPGs, while about 38 percent of ERDF spending serves an EPG purpose, such as when infrastructure projects generate cross-border benefits, or when spending contributes to environmental protection⁹. Given that cohesion funding for more-developed regions is minimal – less than 0.05 percent of their average GDP in the 2021-27 MFF (Table 2) – and that these regions will receive some funding under the 2028-2038 MFF even without minimum requirements, setting a mandatory minimum earmarking for EPGs may not justify the associated administrative complexity. 

However, the participation of more-developed regions in cross-border interregional projects provides a strong rationale for supporting them financially, because such projects can transfer knowledge and improve efficiency (Darvas et al, 2019b). In particular, less-developed regions could benefit from cooperation with more-developed regions, fostering convergence. Such cross-border cooperation could, however, be implemented without a minimum amount allocated to more-developed regions. Instead, funds should be allocated to cross-border projects.

The Commission’s proposal is therefore justified in not setting minimum spending allocations for transition and more-developed regions. Instead, minimum amounts should be set for cross-border projects.

Table 2: ERDF and ESF+ commitment appropriations by region type, % of regional GDP

^{Source: Bruegel based on Eurostat (nama_10r_2gdpc) and European Commission (Cohesion Data Platform, Commission implementing decision 2014/190/EU, Commission implementing decision 2014/99/EU and Commission implementing decision 2021/4894). Note: the United Kingdom during its EU membership is excluded. Regional classification is based on GDP per capita at PPS relative to the EU average (see note to Figure 1). In the 2014-2020 and 2021-2027 MFF periods, ERDF and ESF+ were allocated according to this regional classification. Regional GDP data is available until 2023 at the time of writing. For 2024-2027, we assumed regional GDP will grow the same rate as national GDP, as reflected in the European Commission’s November 2025 forecast.}

3.3 Combining multiple policy areas within NRPPs

Another criticism of the Commission’s proposal is that pooling funds weakens EU policies, such as CAP and cohesion, that have distinct objectives. We disagree with this criticism, for two reasons.

First, as discussed previously, the NRPP rules would include numerous requirements and earmarking of funds to ensure that the objectives of these policies are served.

Second, the literature highlights overlaps and conflicts between the rural-development component of the CAP and cohesion policy (CP), suggesting that spending allocations across these areas should in fact be undertaken jointly. For example, Crescenzi et al (2016) identified significant links between rural development and cohesion policies, but noted that synergies remain limited, while differing approaches (territorial vs. sectoral) often create coordination problems. Kah et al (2020) pointed to thematic overlaps and coordination challenges, particularly in non-urban regions, and recommended greater integration of funding streams for rural development. Mikuš et al (2019) emphasised persistent conflicts between sectoral (CAP) and territorial (CP) approaches. A systematic literature review by Lillemets et al (2022) found that CAP has had no significant impact on rural development, and its effect on regional cohesion is limited or inconclusive.

Such inefficiencies, conflicts and coordination challenges are best addressed by combining these policies, as the Commission proposes (European Commission, 2025a). While one option would be to move rural development from CAP to CP, the Commission’s proposal to merge CAP, CP and other related policies into a single, coherent NRPP framework makes sense. This approach should foster strategic and complementary development across policy areas.

3.4 Fear of re-nationalisation and sidelining of regional authorities

Despite fears that regions might not be adequately included in the NRPP budgeting cycle, according to the draft NRPP regulation, the ‘partnership principle’ and European Code of Conduct on Partnership, which currently safeguard regional participation in the cohesion fund budgeting process, would continue to apply (Box 2). If these rules are sufficient to safeguard regional participation now, it is unclear why they would not be sufficient in the next MFF cycle.

The fear of sidelining regional voices may relate to the perceived resemblance between the NRPPs, and the national recovery plans developed for the Recovery and Resilience Facility (RRF), a fund outside the MFF framework created during the COVID-19 pandemic. There was limited participation of regions in the preparation of recovery plans (Valenza et al, 2021). However, the draft NRPP regulation has provisions (that we highlight in Box 2) that the RRF regulation (Regulation (EU) 2021/241) did not. The RRF regulation neither required the partnership principle nor referenced multi-level governance, nor did it require compliance with the European Code of Conduct on Partnership. Recovery plans were thus formulated under a distinct legal framework and do not serve as templates for NRPPs.

Despite the safeguarding of the involvement of regions in the budgeting process (Box 2), there are claims that regional involvement would still come down to political good will on the part of national governments as central coordinators of NRPPs (Guderjan and Kölling, 2025). However, such political steering could be present in today’s cohesion policy as well, while other centralised national plans have been implemented with regional involvement, suggesting that these concerns are unfounded.

For example, since 2023 (under Regulation (EU) 2021/2115), rural development measures have been included within national CAP strategic plans, which are structured similarly to the proposed NRPPs. The wording in Regulation (EU) 2021/2115 is again similar to the draft NRPP regulation, in particular in saying that plans should be drawn up “where applicable in collaboration with their regions, in accordance with their institutional and legal framework” and that these partners should be involved in the drafting of plans. Münch et al (2023) noted that the drafting of these plans involved significant participatory and evaluation processes, including the application of the partnership principle.

The draft NRPP regulation, the Common Provisions Regulation and CAP regulations all reference national “institutional and legal frameworks” when specifying the partnership principle. This provision allows for differences between countries, such as centralised France and federal Germany. Despite its centralised setup, France’s national CAP plan involves regional councils as managing authorities for non-area-based aid under the European Agricultural Fund for Rural Development, while area-based support is managed by the French state¹¹. In contrast, in Germany, almost the entire CAP budgeting process – including planning and implementation – is handled by the 13 regional authorities¹². These examples suggest that regional authorities can be properly involved – according to national legal setups – in the planning and management of a single national plan, in both centralised and federal EU countries.

3.5 Limited role of the European Parliament

The draft NRPP regulation provides the European Parliament with few powers beyond its role in adopting the regulation itself and exercising oversight over delegated acts (the ability to revoke the Commission’s delegation of power and to object to adopted delegated acts; Article 87 of the draft regulation; European Commission, 2025a). The Council would approve the plans via implementing acts, while the Parliament would have no role in the approval or amendment of NRPPs, even though these plans would shape how funding is ultimately prioritised and spent. Apart from the earmarked amounts, the Parliament would have no power over the allocation of the NRPP funds. 

A possible comparison could be made to the CAP strategic plans. The Parliament was also only involved in the regulation underpinning these plans, but not involved in approval of the plans. However, the CAP plans cover a narrower part of the budget and commitment appropriations were set for the CAP plans, while the draft NRPP regulation would allow EU countries significant discretion in deciding spending priorities.

Under the EU Treaty, European Parliament consent is needed for the MFF and the Parliament agrees annual budgets jointly with the Council. Against that background, concentrating major EU budget spending choices into national plans in which the Parliament would have no formal involvement raises legitimate accountability concerns. We therefore recommend entrusting the European Parliament with a decision-making role in the adoption and possible later revisions of NRPPs, rather than limiting its role to the adoption of the regulation establishing the framework for these plans.

3.6. Conditioning sub-national cohesion investments on unrelated national reforms 

As argued in section 2, EU funding of local goods, which describes most cohesion spending, should be based on a results framework. The results framework measures the success of interventions and is thus distinct from rule-of-law conditionality, which must be met for all EU spending¹³. Less clear is whether it is legitimate for the regional funding performance indicators to include national targets and reforms, as envisaged by the Commission’s proposal (European Commission, 2025a).

The Commission appears to seek a high degree of discretion in setting performance conditions, partly because some of the requirements that NRPPs are supposed to meet are influenced strongly by the Commission, and partly because the Commission seeks to control the ‘financing decision’ that sets milestones and targets and links them to payout values:

• Article 22(2)(b) of the draft NRPP regulation states that NRPPs should “effectively address all or a significant subset of the challenges identified” in the European Semester (the EU’s economic policy surveillance framework), including country-specific recommendations (CSRs); CAP national recommendations; Digital Decade recommendations; National Energy and Climate Plans; and internal security recommendations.

• Article 23(8) of the draft NRPP regulation proposes that “Once the Council has adopted an implementing decision … the Commission shall adopt a financing decision … including … the milestones and targets in relation to the implementation of measures contained in the NRP Plan, and for each of them, the corresponding pay-out value”. This differs from the RRF (section 3.4), for which Council implementing decisions included milestones and targets and financial contributions.

Another set of country-wide conditions concerns breaches of certain EU economic rules and agreements: the excessive deficit procedure, the excessive imbalance procedure and macroeconomic adjustment programmes (Article 67(1)(e)). Under the draft NRPP regulation, once the Council has established such a breach, the Commission could suspend all or part of the payments. In contrast, under the current MFF, it can only propose a (partial) suspension, which the Council may reject by a qualified majority (Article 19 of Regulation (EU) 2021/1060).

Remarkably, policy-specific recommendations might not be linked to policy-specific measures and spending. While one might expect that, for example, CAP-related recommendations would apply only to agricultural measures in the NRPP (with funding conditional on their implementation), the draft NRPP regulation does not establish such links. Cohesion or internal security spending could thus, in principle, be held up by failure to implement a CAP recommendation.

Equally concerning is the requirement that NRPPs address country-wide
(non-sector-specific) European Semester recommendations¹⁴, which often cover areas including pension reforms, labour policies, improvements in the business environment or the functioning of the judiciary. In general, these do not relate specifically to any of the policy areas covered by the NRPPs. The requirement to address all or a significant subset of these recommendations may therefore imply that some cohesion measures (and other policy areas included in the NRPPs, such as agriculture and internal security) will be subject to such conditionality.

The Commission approach could perhaps be justified as a way to overcome political resistance to socially beneficial reforms opposed by vested interests, by increasing the costs to national administrations of not implementing country-wide reforms. However, there are three prima-facie arguments against such conditionality.

1. It makes no sense to make spending on local goods conditional on policy measures that are unrelated to whether this spending achieves the desired results. Moreover, such conditionality could be counterproductive if it were to lead to the interruption of locally useful funding because national authorities fail to reach the indicated milestones. 

2. Design and democratic legitimacy: the challenges and recommendations that should be addressed in full or to a significant degree, as listed in Article 22(2)(b) of the draft NRPP regulation, are largely controlled by the Commission. While some European Semester country-specific recommendations have specific legal bases (fiscal, macroeconomic, rule of law), others relate to policy areas under national competence¹⁵. Given the lack of stakeholder and parliamentary involvement in the design of most of these recommendations¹⁶, they may suffer from a democratic deficit.

3. Making EU funding conditional on the implementation of actions that fall within national competences may conflict with the principle of subsidiarity.

The first of these concerns is addressed in Article 22(2)(l) of the draft NRPP regulation, which requires national budgets to continue payments to beneficiaries, even if EU funding is suspended, ensuring protection of approved projects and beneficiaries. Hence, the concern that locally useful cohesion spending would be at the mercy of unrelated national reforms does not apply. Instead, it is implied that conditioning national-level milestones and targets on cohesion spending could have significant distributional implications. If national conditionality is met, the EU budget will pay for the local project; if it is not, the national budget will pay.

This approach could be justified, in our view, if the national measures required by the results framework embody a cross-border externality. For example, pension reform in a highly-indebted country can improve fiscal sustainability and reduce the risk of a crisis that harms other EU countries. As noted in section 2, most cohesion spending does not incorporate such externalities; rather, it entails redistribution across EU members. Requiring policy reforms that benefit the EU as a whole as the quid pro quo for such redistribution seems legitimate in principle. In effect, the EU budget would then be subsidising national measures that have an EPG flavour.

It follows that national-level conditionality in the results frameworks governing cohesion spending should apply only if the reform:

1. Can either be justified as increasing the expected local impact of cohesion spending, or 

2. Creates an obvious cross-border benefit, or a benefit for the EU as a whole.

This requires being selective about the possible recommendations listed in Article 22(2)(b) that are chosen to design the national-level conditionality.

Ensuring these conditions are met and addressing concerns about the democratic legitimacy of national-level conditionality requires the involvement of stakeholders. With respect to the first condition, regional and local authorities should obviously have a strong say over whether national reform benefits local-level spending. 

Establishing the second condition – a high value of national level reforms or other policy measures for the EU as a whole – requires the involvement of the European Parliament or the Council: 

• On whether national level reforms – for example, based on country specific recommendations (CSRs) – create value for the EU as a whole, the European Parliament should be involved to ensure democratic legitimacy. 

• When disbursements of NRPP funds are linked to compliance with EU legislation – for example, taking effective action under the excessive deficit procedure – any decision to suspend funds should be taken by the institution tasked with the enforcement of the regulation. In the context of the EU fiscal rules (Council Regulation (EC) No 1467/97), this is the Council. This would require amending Article 67 of the draft NRPP regulation, which would allow the Commission to suspend payments. Having two different bodies – the Council for EDP fines and the Commission for fund suspensions – deciding separately on sanctions for the same issue risks inconsistent outcomes, which would be undesirable¹⁷.

Conditions 1 and 2 also help address the third concern – violation of the subsidiarity principle. The EU would not be imposing policies that fall under national competence; rather, it would be offering a financial incentive to implement policies that are either important to meet cohesion objectives or have strong cross-border ramifications. Furthermore, the NRPP regulation would be adopted by the European Parliament and the Council, providing political backing and implying that the Parliament and EU countries do not consider the regulation to be incompatible with the subsidiarity principle. For this reason, the financing decision on milestones, targets and payout values (as per Article 23(8) of the draft NRPP regulation, see above) should also be adopted by the Parliament and the Council, rather than leaving this decision solely to the Commission.

Further to the six issues discussed in section 3, future EU cohesion policy within the NRPP framework needs to take on board a number of other elements. 

4.1 Target setting 

Experience of the RRF and its national recovery plans has shown how problems can arise from lack of clarity about how targets and milestones are set, and whether these are sufficiently ambitious. In relation to the RRF, the European Court of Auditors (ECA, 2022) highlighted how the “lack of harmonized approach [sic] in setting milestones and targets affects comparability across Member States and poses a risk in terms of equal treatment” of countries’ plans. Other assessments have highlighted how some targets were easy to meet. For example, Corti and de la Ossa (2023) noted that Italy’s recovery plan target of assisting 300,000 jobseekers by December 2022 was just half of the national target of 600,000 jobseekers, indicating that the recovery plan target may have been set to secure its easy achievement. They reported similar anomalies for a programme on early childhood education. Darvas and Welslau (2023) identified recovery plan targets that related to programmes that began well before the submission of recovery plans, making them easy to reach. The French, German and Dutch plans even contained targets with deadlines that passed before the submission of the plans (Darvas and Welslau, 2023).

For the NRPPs, therefore, a robust methodology should be established to ensure milestones and targets are sufficiently ambitious across all plans. Since effective target setting requires deep local knowledge, independent evaluators – distinct from beneficiaries and free of conflicts of interest – should assess the level of ambition.

4.2 Results focus

While the RRF was a “performance-based” instrument to provide “funding based on the achievement of results” (Regulation (EU) 2021/241), it actually fell short against performance-based funding standards. The rules and guidance underpinning the RRF sought inputs and outputs, not results, leading to uneven application of results indicators (Darvas et al, 2023)¹⁸. 

It seems that the European Commission has recognised this limited focus on results indicators, because the proposed expenditure tracking and performance framework for the next MFF lists output and results indicators for many intervention fields (ie types of activities) (European Commission, 2025e). Most proposed result indicators are well justified. For example, greenhouse gas emissions avoided is an ideal result indicator, which was proposed for 125 out of the 543 intervention fields.

However, some indicators classified as ‘results’ are closer to inputs. Examples include “New young farmers and other new entrants in agriculture supported” (since it does not measure the achievements of the supported farmers), “Percentage of additional income support per hectare for eligible farms – by sector” (again, no measuring of results), “Number of students benefitting from equipment’s [sic] purchased” (an input to education; result would be improved learning outcomes) and “Value of military mobility equipment procured” (does not refer to what the equipment is good for, or whether the purchase was made in the most efficient way).

Moreover, EU countries may also propose their own indicators¹⁹. While input, output and result indicators should all play roles in a performance framework, result indicators should have a prominent role consistently in all NRPPs.

4.3 Consistency of regional and national targets

Regional plan authorities may negotiate directly with the Commission, including on performance targets at the regional level. One option for setting national targets would be to aggregate regional targets. 

However, the Commission also foresees national-level requirements that would need to be superimposed on regional targets, and simply summing regional targets may not ensure a comparable level of ambition across countries. Greater clarity is therefore needed on how national milestones and targets would ultimately be derived.

4.4 Independent evaluation

The Commission’s deep involvement in the NRPP budgetary cycle creates a strong interest in portraying the plans as successful. The Commission designed the new framework, will negotiate with regions and central governments before the plans are submitted, will evaluate the plans and propose their approval to the Council and – ideally – to the European Parliament (section 3.5). The Commission is also expected to assess and communicate on whether plans are implemented successfully. Such extensive involvement raises questions about the Commission’s ability to provide fully objective assessments. 

A similar situation arose with the RRF recovery plans. Evaluations were occasionally inconsistent and lenient (Darvas et al, 2025). The NRPPs, the Commission’s assessments of them and the actual results achieved should therefore be evaluated independently.

4.5 Cross-border projects

Since a large share of NRPPs will not fund EPGs, we recommend setting minimum thresholds for cross-border projects within national plans, to enhance European added value and help fill cross-border infrastructure gaps.

Many of the design features of the proposed NRPPs are to be welcomed. Integrating multiple policy areas, including cohesion policy, within unified plans can reduce inefficiencies, foster synergies and enable strategic investment. It should also reduce longstanding overlaps and coordination failures linked to formulating cohesion and rural development policies under separate frameworks. The important role of regions in the budgeting process will continue to be protected, with the same safeguards as the current financial framework.

A selective reduction in cohesion spending – as implied by the Commission’s proposal – also appears reasonable. Scarce EU resources must also be directed to competing priorities, including climate action, competitiveness and security. More efficient allocation of cohesion funds could increase the impact of cohesion policy even with a smaller budget. A smaller budget is further justified by the fact that less-developed regions have converged over the past two decades, and because more than half of current cohesion spending does not finance EPGs.

We also endorse the application of a performance framework focused on measuring plan-level achievements, given that a large share of NRPP expenditure will not generate EPGs and that local implementing authorities have an informational advantage in assessing the social value of individual projects.

Nevertheless, improvements can be made in finalising the NRPP rules:

1. Spell out when sub-national cohesion investments can be legitimately conditioned on unrelated national reforms. Cohesion spending should be linked to national reforms only if such reforms would have a local impact – fulfilling the goal of cohesion policy directly – or generate clear cross-border benefits for the EU as a whole. Regional and local authorities should be involved in assessing the local impacts of national reforms, while the European Parliament and Council should assess cross-border impacts.

2. Clarify that policy-specific requirements (eg agricultural recommendations) only apply to measures in those policy areas, not other policy areas (eg cohesion).

3. Grant the European Parliament a formal decision-making role in both the approval and any subsequent revision of NRPPs. Given the significant discretion over the allocation of EU resources embodied by these plans, democratic accountability is essential: EU Treaties require the European Parliament’s consent for the MFF and it acts as co-legislator for annual budgets. 

4. Rather than entrusting the Commission with the adoption of financial decisions that include milestones and targets for each plan, and of decisions on the payout values for each measure, such decisions should be taken jointly by the Council and the European Parliament. 

5. Rather than giving the Commission the power to suspend EU funds for non-compliance with excessive-deficit rules, the current system (Commission proposal, Council decision) should be retained.

6. Establish a robust methodology to ensure that milestones and targets are sufficiently ambitious across all plans. This should give a substantial role to independent evaluators, who should be distinct from beneficiaries and free of conflicts of interest.

7. Improve the proposed performance framework to ensure a strong focus on results consistently across all plans. While the draft NRPP regulation includes several useful result indicators, certain indicators classified as results are closer to inputs, and EU countries are able to propose alternative indicators.

8. Clarify how regional targets will be aggregated to the national level, and how national milestones and targets will ultimately be derived.

9. Require independent evaluations of the NRPPs, the Commission’s assessments and the actual results achieved under plans.

10. Set minimum thresholds for cross-border projects within national plans. 

References

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Appendix: Cohesion policy allocation methodology in the 2021-2027 MFF

In the 2021-2027 MFF, cross‑country allocations for the European Regional and Development Fund (ERDF) and the European Social Fund+ (ESF+) are determined by a complex methodology that accounts for regional prosperity, with separate calculation approaches for less-developed, transition and more-developed regions. For less-developed and transition regions, the baseline allocation is primarily driven by regional GDP per capita in PPS relative to the EU average, with several additional indicators – regional unemployment, youth unemployment, low education levels, national greenhouse gas emissions outside the EU emission trading system, and national net non‑EU migration – used to adjust baseline amounts.

For more-developed regions, the baseline is population‑based and is then adjusted using the unemployment rate, employment rate, tertiary education attainment, early school‑leaving rates, GDP per capita (PPS), population density, national greenhouse gas emissions and national net non‑EU migration.

Different allocation methodologies apply to the Cohesion Fund, Interreg, outermost regions and the Just Transition Fund.

After calculating each fund’s baseline allocation, various minimum safety nets and maximum caps apply to the total envelope per country, which in turn affects the distribution across regions within each country.

Countries may shift up to 5 percent (or 10 percent in a special case) of initial allocations for less-developed regions to transition or more-developed regions, and from transition regions to more-developed ones. Transfers from higher to lower development regions are allowed without limit.

A summary of the methodologies can be found in Annex A1.2 of Darvas et al (2024).