WHATSEUp? 27 National plans for the next EU Budget

In July, the European Commission presented its proposal for the EU’s next long-term budget (2028–2034): €2 trillion in total, including €168 billion earmarked for repaying the post-COVID recovery plan. One new and main feature proposed is the National and Regional Partnership (NRP) Plans. But what are these and what do they mean for cities? Energy Cities unpacks them for you.

What are the National and Regional Partnership Plans? Why does it matter for cities?

The first heading of the proposal for the EU long-term budget is called “Economic, social and territorial cohesion; agriculture, rural and maritime prosperity; and security” (Referred to as “the Fund”) with 44% of the total MFF amount. It will be operated via:

•  27 National and Regional Partnership Plans (NRP Plans) that will include the Common Agricultural Policy, the cohesion, fisheries, rural communities and tourism policies, as well as migration and border management programmes (€771.3 billion)
• An INTERREG plan (€10 billion)
• The EU Facility to support new Union-led initiatives and help member states during crises such as natural disasters – a big flexible instrument (€66 billion).

In this article, we focus on the NRP plans since they include the Cohesion Policy—the main source of EU financing for local governments.  

How do they work? What’s new?

The National and Regional Partnership (NRP) Plans are modelled on the Recovery and Resilience Plans, as Member States must prepare and submit plans that contribute to EU objectives while considering national and regional specificities. Similarly, the NRP plans will include an agenda of reforms and investments that will need to be validated by the European Commission.

The NRP plans include the Partnership Principle—aligned with the current Cohesion Policy—and a principle of multilevel governance. Through the partnership process, Member States are required to include national, sectoral and, “where relevant”, regional and territorial chapters. However, the territorial dimension of the plans is only optional.

Regarding the management of the Fund, Member States must designate managing authorities (which could still be regional authorities), paying agencies, audit authorities, and a monitoring committee. A new feature of the proposal is the requirement to establish a “coordinating authority” when multiple managing bodies are involved.

Finally, in terms of figures, the proposal for the fund defines several earmarked allocations, including:

• €218 billion earmarked for the least developed regions, out of a total of €404.9 billion available for economic, social, and territorial cohesion, including support for fisheries and rural communities;
• 14% of NRP plans funding to contribute to social objectives;
• 43% of NRP plans funding to contribute to climate objectives.

Overall, the cohesion policy would be reduced by 15% according to the Jacques Delors Institute.

Moreover, there is no longer any specific earmarking for urban areas, as was previously the case under the ERDF, or for territories other than the least developed regions.

What’s the problem? Energy Cities’ Opinion

The design of these National Partnership Plans raise several alarms for Energy Cities.

First, Energy Cities is very concerned about the merging of radically different policy priorities (agriculture, cohesion, migration, etc.) within a single plan. We are also deeply concerned about the lack of a strong governance mechanism.

The proposal also threatens the principle of cohesion, as only the least developed regions have a ring-fenced budget. Others will have to compete amongst themselves and with other priorities (such as agriculture or migration).

There are also insufficient guarantees that Member States will actually implement a genuine territorial action policy. The chapter on this topic is left to their discretion, and there is no assurance that such policies will finance small-scale projects or grant regional and local authorities co-decision powers.

Furthermore, the Commission has drawn inspiration from the Recovery and Resilience Facility (RRF), which has not proven its effectiveness: much of the allocated funding remains unspent, and territorial action has not been prioritised.

The re-nationalisation of funds is a poor idea in terms of spending efficiency and also risks alienating citizens from the European project, as they will no longer see the European dimension of the money financing projects in their communities.

Finally, the Commission has proposed a decommitment mechanism intended to ensure that Member States comply with the rule of law to access funds. However, this mechanism does not guarantee that the funds will reach regional and local authorities within the Member State concerned.

How to fix it? Our demands

To ensure that the next EU long-term budget delivers on its objectives, local governments—responsible for many of the actions used to assess the budget’s performance—must be co-decision makers of the spending of the EU budget and in particular, of these national plans (should they exist).

It is also essential to improve the proposal to guarantee that the EU budget fosters cohesion rather than competition across the continent.

For this reason, Energy Cities calls for:

1. A mandatory regional and territorial chapter with a clear section on cities in the NRPPs, if they are to be confirmed, to ensure a balanced approach across all territories. This chapter should be designed with local and regional governments and finalised through genuine multilevel governance and the partnership principle.
2. An earmarking for just transition and affordable living for all in the EU budget, with a dedicated sub-earmarking for cities.
3. A stronger safeguarding mechanism in the NRPPs, if they are confirmed, to ensure that if the national authority fails to deliver on policy reforms, for example, under the rule of law conditionality, local and regional governments can still access EU funds.
4. Linking performance indicators to EU law implementation and territorial delivery to avoid geographic discontent and create stronger incentives for national authorities to engage with local and regional authorities.

What’s next? A call for action

The negotiations are ongoing in the European Council and starting in the European Parliament. The latter has threatened to reject the entire MFF proposal to oppose the model of the NRPs plans and particularly the re-nationalisation of the budget and merger of the agriculture and cohesion funds. Negotiations will continue over the course of the next two years.

Energy Cities, as part of the Local Alliance, will make local governments’ voices heard. If you want to get involved at the national or European level, please reach out.

To know more on the topic, check our Q&A, our first What’sEUp on the MFF and attend our MFF regular meeting for members, breaking down the future MFF for local governments.