Fitto holds back on cohesion policy reform

Brussels – In his new role as executive vice-president of the European Commission, Raffaele Fitto continues to advocate the need to reform cohesion policy but has not yet provided details on the changes that are to affect one of the largest spending chapters of the EU budget (about a third of EU funds). He continues to be conciliatory with local authorities, reassuring them of the central role they will continue to play in the upcoming programming period, and stresses that something will have to change without yet clearly indicating what.

In a hearing this morning (Jan. 28) at the Regional Development (REGI) committee of the European Parliament, the executive vice president reiterated for the umpteenth time that cohesion policy must be “modernized.” Therefore, the “first priority” for Fitto will be the mid-term cohesion policy review. It will take place this year – national authorities will have to send the Commission their assessments on how to improve it (as the commissioner requested last month) by the end of March – to correct the course between now and the end of the current programming period, which began in 2021 and expires in 2027, and redirect resources where necessary. The commissioner said it would be “an opportunity to accelerate the use of available funds and align funding more closely with new and growing needs.“

Towards a reform

Now, as widely anticipated in recent months and as Fitto confirmed during his first hearing before the Joint REGI and COTER committees (the competent bodies on the matter within the European Parliament and the Committee of the Regions) shortly after taking office, cohesion policy will undergo substantial changes after 2027.

However, there are still no formal indications on the extent of these reforms, which will affect the entire Multiannual Financial Framework (MFF) 2028-2034: for now, there are only media rumors, never officially denied by the Commission.

At #European Parliament I had a fruitful exchange of views with parliamentarians from the Committee on Regional Development on the future of cohesion policy. Together, we have already achieved important results, such as the adoption of the RESTORE and BridgeforEU regulations. pic.twitter.com/QfyBRkKGoE

– Raffaele Fitto (@RaffaeleFitto) January 28, 2025

These were enough for local authority representatives to raise alarms as early as last fall, demanding guarantees that the new cohesion policy – which rumors suggest would be remodeled along the lines of the Recovery and Resilience Facility, meaning structured around individual national programs (instead of the hundreds of Community programs currently active, allocated among member states) with resources that governments could use with more or less free discretion, provided they realize reforms agreed in advance with Brussels-continues to follow “a place-based approach” and to respect the fundamental principles on which it was founded, namely partnership, shared management, and multilevel governance.

The Role of the Regions

The principles that Fitto confirmed today that he wants to preserve “by ensuring the direct and active involvement of local and regional authorities” are another olive branch extended to administrators. However, doubts probably linger among administrators that this is not a smokescreen instead or, worse, a smokescreen to conceal reform plans that go in a completely different direction.

Meanwhile, he throws water on the fire: “There is no centralization, as far as I am concerned,” he scoffed, reiterating that “there has never been in any act or proposal” from the EU executive. At most, “there may be work vis-à-vis the member states and local authorities to adapt the current cohesion policy to the new needs.”  However, it is a far stretch from here to the idea of nationalizing the entire regional policy, he argued, pointing out the “fundamental role” of local administrations and autonomies.

“I am well aware of the significance and role of local authorities and regions, and I think it is very important to continue working in this direction,” he told MEPs, referring to his time as governor of Apulia, and at the same time announcing “an agenda for cities, outlining the EU’s strategic approach to sustainable urban development” the central points of which will be “housing, climate action, digitization, mobility, social inclusion, and equality.”

What will change?

Having said this, however, some things “need to be corrected,” and it is necessary to abandon certain taboos, he clarified. “We cannot think of continuing to defend cohesion policy at a general level without addressing the problems we have, starting with that of low absorption” of EU funds, one of the main critical issues, especially in some regions such as the sought of Italy. “To improve the impact of cohesion policy, we need an implementation model based on results, good governance, and strong institutions,” Fitto said. The model resembles precisely — at least distantly — the RRF and the National Recovery and Resilience Plans.

The question still to be answered remains on the balance the Commission intends to strike between centralization and subsidiarity in the next MFF and, consequently, in the upcoming regional programming for 2028-2034. March is around the corner, but no one has yet seen a concrete and structured proposal from which to revisit the future of cohesion policy.

For sure, Fitto pointed out, it will require a greater degree of flexibility “to address emerging challenges and at the same time ensure balanced regional development in the long term” to ensure that all areas of the Old Continent enjoy adequate socio-economic development indices and to make concrete that “right to stay” in one’s own land of which he has made a personal banner.

And the concept of flexibility goes hand in hand with that of simplification. “Complexity is not just a cost,” he said, but “can be a deterrent, which is why simplification is essential to make support more accessible.” Therefore, the executive vice president’s other priority in designing the cohesion policy after 2027 will be to “reduce administrative costs.”

After all, the importance that reducing complexity and legislative and bureaucratic hypertrophy will hold in Ursula von der Leyen‘s second term is confirmed by the fact that among the College’s new portfolios is precisely one on Enforcement and Simplification, entrusted (along with the one on Economy and Productivity) to Commissioner Valdis Dombrovskis.