EU countries have reallocated €34.6 billion from their 2021 — 2027 cohesion policy budgets to priorities including defence, housing, water resilience, energy links and measures to boost competitiveness.
The changes cover EU regional funding programmes that support economic development and reducing disparities between regions, including the European Regional Development Fund and the Cohesion Fund, the European Commission announced on Wednesday.
The Commission said it proposed encouraging countries and regions to redirect parts of their cohesion funding in April 2025, citing a changing geopolitical landscape since the 2021 — 2027 programmes were launched.
It said EU lawmakers and national governments approved the proposal in September 2025, and the Commission has since signed off amendments to 186 national and regional programmes across 25 member states.
The €34.6 billion reallocated represents almost 10% of the €367 billion cohesion policy budget for 2021 — 2027 covered by the mid-term review.
Where the money is being redirected
The largest share — €15.2 billion — has been moved towards measures intended to boost competitiveness, including support for critical technologies, innovation and skills, the Commission said.
A further €11.9 billion has been reprogrammed for defence-related areas, including defence industrial capabilities, military mobility and civil preparedness, as well as skills development.
The Commission informed €3.3 billion has been redirected to affordable and sustainable housing, €3.1 billion to water resilience, and €1.2 billion to energy security and industrial decarbonisation.
Countries and regions that redirected funds to the new priorities will receive increased pre-financing and a higher EU co-financing rate for regional development projects, easing pressure on national budgets.
More favourable terms were offered to regions bordering Russia, Belarus and Ukraine, which the Commission said have faced significant challenges since Russia’s full-scale invasion of Ukraine in 2022.
