The European Parliament has adopted the cohesion package for the period 2021-2027

The European Parliament adopted the political agreements on the Cohesion policy legislative package 2021-2027 of €373 billion which marks the final step of the legislative procedure and allowed for an entry into force of the Cohesion legislation on 1 July.

The package comprises the following Regulations:

• the Common Provisions Regulation (CPR) for shared management funds;
• the European Regional Development Fund (ERDF) and Cohesion Fund (CF) Regulation;
• the European Social Fund Plus (ESF+) Regulation;
• the Interreg Regulation laying down specific provisions for the European territorial cooperation goal supported by the European Regional Development Fund and external financing instruments.

The approval of the CPR also establishes key elements for the functioning of the new Just Transition Fund (JTF) Regulation which completes the set of Cohesion policy funds available for 2021-2027.

The European Parliament also adopted the Public Sector Loan Facility that will effectively complete all proposals under the Just Transition Mechanism. This regulation is scheduled for adoption by the Council on 12 July.

The new Common Provisions Regulation provides a joint legal framework for eight shared management funds: the European Regional Development Fund, the Cohesion Fund, and the European Social Fund Plus, the European Maritime, Fisheries and Aquaculture Fund, the Just Transition Fund, and financial rules for the Asylum, Migration and Integration Fund, the Border Management and Visa Instrument and the Internal Security Fund.

The European Regional Development Fund and Cohesion Fund Regulation sets specific provisions for the European Regional Development Fund (€226 billion) and the Cohesion Fund (€48 billion). The ERDF will contribute to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions, while delivering on the Union’s political priorities through a thematic concentration of resources.  The CF will support projects in the field of environment and trans-European networks in the area of transport infrastructure.

The European Social Fund Plus is the EU’s main fund for investing in people. It will be the key financial instrument to implement the European Pillar of Social Rights, to support jobs and create a fair and socially inclusive society. It will also provide much needed resources to Member States for the recovery of our societies and economies after the coronavirus crisis. With a budget of €99.3 billion (in current prices) for 2021-2027, Member States can use the money to create and protect job opportunities, promote social inclusion, fight poverty, including by combatting homelessness, and give workers the skills needed for the digital and green transition. It also includes an ambitious requirement for Member States to invest in young people and address child poverty.

The Just Transition Fund is a new Cohesion policy fund with an overall budget of €19.2 billion (in current prices). The JTF is a key element of the European Green Deal and the first pillar of the Just Transition Mechanism (JTM). It aims to alleviate the social and economic costs resulting from the transition towards a climate-neutral economy, through a wide range of activities directed mainly at diversifying the economic activity and helping people adapt in a changing labour market. The Public Sector Loan Facility is the third pillar of the JTM, leveraging the EU budget to provide access to additional financing. The Facility specifically targets public entities, creating preferential lending conditions for projects that do not generate sufficient revenue to be financially viable.

Finally, with a budget of €8.1 billion, the 6th generation of Interreg continues to shape territorial cooperation across Europe for all its different strands (cross border, transnational and interregional). It covers the cooperation at external borders of the Union, benefiting from the support of external instruments (such as the Instrument for Pre-accession Assistance – IPA and the Neighbourhood, Development and International Cooperation Instrument – NDICI) and sets up a new strand dedicated to reinforcing the regional cooperation of outermost regions.