The EU's Cohesion Policy is the second largest policy of the EU budget. With a total of EUR 376 billion planned for the 2021-2027 period, it represents one third of the total. The policy aims to reduce the difference between levels of development across the EU. This involves a substantial injection of resources in the less developed Member States and regions and plays a key role in fostering development and cohesion throughout the Union. The impact of the policy can be considerable, with GDP being more than 10% higher in some regions thanks to the 2014-2020 and the 2021-2027 programmes, according to model simulations.

Significant support to EU priorities

Cohesion Policy, with a budget of over EUR 400 billion for the programming period 2014-2020 and of EUR 376 billion for the 2021-2027 period, contributes substantially to investments in support of European competitiveness (RTDI, digital economy, SME) and for the creation of a greener, more connected and socially integrated Europe. It has also contributed significantly to the European response to the Covid-19 pandemic.
In the 2014–2020 programming period, the investment financed under Cohesion Policy was aimed at supporting 11 broad priorities or Thematic Objectives. In the 2021–2027 programming period, the first 10 Thematic Objectives have been replaced by five Policy Objectives. To enable comparisons between the two periods, the 10 Thematic Objectives of the 2014-2020 period have been mapped to four broad Policy Objectives of the 2021-2027 period. 
When the investment priorities are compared, it can be seen that Cohesion Policy has increased the resources dedicated to climate change and environment, the share of these fields increasing from 19% for the period 2014-2020 to 27% for the period 2021-2027 (EUR 75.7 billion to EUR 93.3 billion). 
Cohesion policy budget 2014-2020 by 2021-2027 policy objectives (EC calculations)
The chart below is not interactive.
Cohesion policy budget 2021-2027 by 2021-2027 Policy objectives
The chart below can be filtered by member state and fund (top right). 
Overview of mapping of 2014-2020 high level thematic objectives to 2021-2027 policy objectives:
- 2021-2027 Policy Objective 1 (smarter Europe) corresponds to the 2014-2020 thematic objectives related to RTDI, ICT and SMEs
- Policy Objective 2 corresponds to thematic objectives for a low-carbon economy, climate adaptation and environment protection)
- Policy Objective 3 corresponds to the thematic objective for network infrastructures
- Policy Objective 4 corresponds to thematic objectives related to employment, social inclusion and training
From the 2014-2020  programme allocations there was no direct equivalent to PO5  "Europe closer to citizens" and the exceptional additional resources for "Fostering crisis repair and resilience" are also not taken into account in the comparison. The full 2014-2020 thematic objective EU allocations can be viewed and explored in this interactive chart.

A place-based dimension is reflected strongly in the policy

Cohesion Policy is the main EU instrument for supporting regional development. The policy follows a place-based approach to pursuing EU-wide overarching policy priorities. Such an approach is essential for tailoring policy interventions to local characteristics, preferences, and circumstances, which tend to differ very significantly across space and time within the EU and Member States.
The place-based nature of the policy is reflected in the way funding under Cohesion Policy is allocated, which is based on categorising regions in terms of their level of development, as indicated by their GDP per head. The ‘less developed’ category includes regions with GDP per head, in PPS terms, of under 75 % of the EU average,  the ’transition’ category, those with GDP per head of between 75 % and 90 % of the EU average for the 2014–2020 period and of between 75 % and 100 % for the 2021–2027 period, the  ‘more developed’ category, the remainder. Several additional indicators are then used to fine-tune the allocation according to the situation of individual regions, specifically, to reflect socio-economic, environmental, and demographic challenges – overall unemployment, youth unemployment, low levels of education, greenhouse gas emissions, and outward migration.
The following chart shows the aid intensity in categories of regions, 2014-2020 (Average EUR per inhabitant per year)

The geographical concentration of the funding implies that, even though Cohesion Policy looks rather modest in magnitude compared to size of the EU economy, it represents a major policy injection for a number of Member States and regions. For instance, while the funds allocated to the policy for the 2014-2020 period correspond to 0.4% of the EU GDP, they represent a substantial support for the less developed economies, reaching 2.7 % of GDP in Croatia, 2.6 % in Hungary and 2.4 % in Poland, Slovakia and Lithuania.
This results in aid intensity (i.e. the amount of support per inhabitant and per year) being much higher for the less developed Member States and regions of the Union. To give some examples, during the 2014-1020 period, it amounted to EUR 404 per inhabitant per year in Estonia, EUR 381 in Slovakia and averaged EUR 297 per inhabitant per year in the less developed regions, well over five times more than the EUR 55 in more developed ones, and EUR 127 in the transition regions.

A significant long-term impact is expected

The impact of Cohesion Policy on the EU, Member States and regional economies is expected to be very significant. Recent model simulations suggest that, by the end of the implementation period (2030), EU GDP could be up to 0.9% higher as a result of the 2014-2020 and 2021-2027 interventions. The policy improves the structure of the regions supported and as a result, its impact lasts long after the programmes are terminated. By 2043, the EU GDP is still expected to be 0.6 % higher thanks to the 2014-2020 and 2021-2027 programmes.

How is the impact modelled?
The impact of the policy is assessed using the European Commission’s spatial computable general equilibrium model, RHOMOLO. In this type of model, policy interventions – disbursements of funding for specific purposes – are modelled as shocks to an economic system, generating, on the basis of a set of assumptions, responses that are reflected in changes in macro-economic variables, such as GDP, employment, investment, and household consumption. The model is used to simulate two scenario: one corresponding to a world where the policy would not exist (called the baseline) and one with the policy included. The difference between the two scenario is the impact attributable to the policy and the results are expressed as % differences compared to the scenario without the policy. For instance, if for a given region GDP under the scenario without the policy is 100 and  110 under the scenario with the policy, its impact is said to increase GDP by 10% compared to scenario without the policy or equivalently 10% above baseline.        

The impact is particularly high in the less developed regions of the EU, with GDP being 12–13 % higher by 2030 than it would have been without Cohesion Policy investment in Voreio Aigaio in Greece, the Portuguese Açores and Swietokrzyskie in Poland, and over 10 % higher in Warminsko-Mazurskie, also in Poland. More developed regions also benefit from the policy, especially in the long run. This is to some extent explained by the strong spatial spillovers generated by the policy as interventions implemented in the less developed regions also benefit to more developed ones, notably those having strong trade links with the main beneficiaries or whose companies have strong competitive advantages in sectors that benefit from Cohesion Policy investments.
Cohesion Policy therefore plays a key role in reducing regional disparities in the EU, in line with its mandate of promoting territorial cohesion in the Union. It helps the less developed Member States and regions to catch up with the more developed ones, while fostering aggregate growth at the level of the EU. Cohesion policy also contributes to the Single Market by stimulating investments in all regions. It strengthens the resilience of regional economies and EU-wide value chains through its ability to tap into the development potential of each region by intensifying the exchange of ideas via trade, investment, and skilled workers.
The following interactive map shows the cumulative impact on GDP of cohesion policy programmes, 2014-2020 and 2021-2027
Zoom and click on the map to select a region and see the exact GDP impact.

More information and data sources

This data story is extracted from the 9th Cohesion Report on Economic, Social and Territorial Cohesion in the European Union, (2024). Find out more about the Cohesion Report on this webpage.
  • For a fuller description of the long-term modelling of the impact, see Chapter 9 of the Cohesion Report (link above).
  • 2021-2027 Finances planned data by programme (filter to intervention fields) - Dataset 
  • 2021-2027 cohesion policy programmes vs Nuts mapping - Lookup table
  • Results from modelling: Long-term GDP impact of cohesion policy - Dataset
For more information on EU Cohesion policy go to Inforegio and to Kohesio for information on projects supported.
Author: Philippe Monfort, Dora O'Neill
Date of publication: May 2024