Special Report: EU Cohesion Policy And Defence

This special edition of Defence Finance Monitor examines the unprecedented convergence between EU cohesion policy and defence. For decades, cohesion funds such as the ERDF, the Cohesion Fund and the ESF+ were used exclusively to promote regional development, reduce disparities and strengthen social inclusion. The 2025 mid-term review of the EU’s financial framework has fundamentally altered this paradigm, explicitly opening cohesion instruments to defence-related objectives. Industrial capacities, dual-use infrastructure, military mobility, civil preparedness, SME participation and skills development have all been integrated into the scope of cohesion funding.

This represents a strategic shift: regional policy is no longer separate from security but becomes a driver of Europe’s autonomy. The amendments include exceptional financing incentives, higher co-financing rates and targeted support for border regions exposed to geopolitical threats. They also align cohesion with flagship initiatives such as STEP and IPCEIs, embedding regional budgets in Europe’s technological roadmap. Confidentiality provisions ensure sensitive projects remain secure while preserving institutional accountability.

Together, these measures redefine cohesion as both an instrument of solidarity and a pillar of resilience. This issue provides a comprehensive set of analyses to guide policymakers, investors and enterprises in understanding the financial, industrial and strategic implications of this transformation. The European Union’s cohesion policy has historically been conceived as a tool to reduce regional disparities, promote social inclusion and strengthen territorial integration. Through the European Regional Development Fund (ERDF), the Cohesion Fund and the European Social Fund Plus (ESF+), cohesion instruments have traditionally been deployed to finance infrastructure, innovation, employment and social services across Member States.

Their purpose was to ensure that less developed regions could converge towards the Union’s average economic performance while safeguarding social and territorial cohesion.