In the autumn of last year, the European Parliament came close to rejecting the Commission’s MFF proposal as the basis for negotiations. In October 2025, the leaders of four of the main political groups in the Parliament – EPP, S&D, Renew and Greens/EFA – wrote to President von der Leyen stating plainly that the Commission proposal had not taken the Parliament’s core requests into consideration and demanding an amended proposal reflecting these requests to allow negotiations with the Parliament to move forward (a copy of this letter was made available by Politico Europe).
In response, the Commission in a non-paper (made available by Euractiv) proposed several amendments to its proposal, which were subsequently included in a speech made by President von der Leyen at a plenary debate of the Parliament on the MFF’s architecture and governance in November 2025. This included a proposal for a rural target expressed as a minimum percentage of the NRP Plans’ general allocation envelope outside of the earmarked amounts for the CAP and CFP as well as the Catalyst Europe loans to be spent in rural areas.
Specifically, the Commission proposed the following amendment to Article 10(5) of the draft National and Regional Partnership Plans Regulation.
At least 10% of the financial envelope referred to in paragraph 2(a) and of the amount referred to in paragraph 4 shall be dedicated to rural areas, calculated by using the code 02 referred to in Part 1 of Annex II of Regulation (EU) [Performance Regulation]. The amount set out in paragraph 2, point (a) letter (ii), as well as the external assigned revenue from the Social Climate Fund, shall be excluded from the basis for the calculation of this minimum allocation.
In plain language, the idea is that the proposed 10% target for expenditure dedicated to rural areas would build on the proposed system of tracking expenditure in the performance regulation that already includes a category for rural areas. This is similar to the way the target for social expenditure in the new Fund would also be tracked.
The purpose of this post is to highlight that fulfilling this commitment will be easier said than done. Previous experience with tracking rural expenditure in cohesion policy does not bode well for the operationalisation of this commitment. There will be a need for much greater clarity in any text emerging from the trilogue negotiations as to how this measurement will take place.
Previous experiences: 2014-2020 programming period
Rural tracking was fully implemented in cohesion policy in the 2014-2020 period as part of tracking investment by type of territory. Programmes were asked to provide information on the “territorial dimension” in the planning phase and, annually, in implementation, Seven territorial codes were defined for the 2014-2020 period. Rural areas were defined in line with the EUROSTAT typology of degree of urbanisation. The typology is based on a cross EU analysis of population location and density using the sq km population grid. The degree of urbanisation distinguishes three types of local administrative units (LAU). Rural areas (thinly populated areas) with a majority of the population living in rural grid cells (cells outside urban clusters) were designated with code 03.
The Commission estimated that 9% of all cohesion resources were planned to be spent in rural areas. There is a separate discussion to be had on whether this typology of rural areas is satisfactory or not, but this is not the topic of this post.
The Commission cautioned against relying too heavily on this estimate, for several reasons. Around half of all cohesion policy investments could not be categorised by territorial type. Many investments cover both urban and rural areas and may therefore not be classified under either type. Planned allocations to one territory type may nonetheless have spillover effects in another (for instance, investments made to improve the businesses or social infrastructure of a small town can be registered as urban, but benefit the surrounding rural area). One presumes that the same issues will also apply to rural tracking in the 2028-2034 period.
Current 2021-2027 monitoring
In 2021-2027, EU cohesion policy has five objectives: a more competitive and smarter Europe (PO1); a greener, low carbon transitioning towards a net zero carbon economy (PO2); a more connected Europe by enhancing mobility (PO3); a more social and inclusive Europe (PO4); and a Europe closer to citizens by fostering the sustainable and integrated development of all types of territories (PO5). PO5 has two specific objectives. The first objective addresses sustainable and integrated development in urban and functional urban areas. The second refers to strategies that focus on sustainable and integrated development of non-urban areas, taking also into account rural-urban linkages. 18 Member States have programmed allocations under this specific objective 5.2.
In the Common Provisions Regulation (EU) 2021/1060 territorial codes are provided but only for the territorial delivery mechanism and territorial focus dimension in P05. Rural areas are given the code 04 but this only applies to the territorial delivery mechanisms used in P05.
Unlike cohesion policy in the previous period, there was no attempt to specifically track broader expenditure in rural areas. Further, the only ringfencing in this programming period requires a minimum of 8% of the European Regional Development Fund (ERDF) should be allocated at the national level for sustainable urban development, focusing on green and digital transformations.
The Commission’s 2024 report on the long-term vision for rural areas comments on the support from cohesion policy for rural areas. It highlights the support channelled through integrated territorial development strategies designed and implemented by respective territorial authorities, strengthening the economic and social fabric of rural areas. But it notes that cohesion policy interventions provide support to rural areas through all policy objectives, although it admits that, because cohesion policy interventions have wide territorial impacts, it is difficult to attribute its actions to one type of territory.
The report concludes that; “Currently there is no comprehensive source indicating and quantifying the extent to which these funds contribute to rural areas. The European Parliament and the Council suggested to work towards a clearer identification and monitoring of the contribution of EU instruments to rural areas in the future” (p. 7).
Conclusion
The Commission has proposed to set a target that 10% of the NRPF general allocation (less the ring-fenced amounts for the CAP and CFP) as well as Catalyst Europe loans should be dedicated to rural areas. This requires a robust mechanism to monitor progress towards this target. The Commission proposes to track this expenditure by requiring Member States to provide a specific code for expenditure in rural areas.
However, experience in the 2014-2020 programming period where this type of tracking was previously tried shows how limited it is. Member States were unable to allocate around half of all cohesion expenditure to a territorial category. Also, because of the existence of spillover effects where investment in urban areas may have spillover benefits for rural areas, it is questionable whether the Commission approach, even if it could be applied, would be anyway meaningful. The Commission’s own conclusion in its review of progress under the long term vision for rural areas that there is no comprehensive source quantifying the extent to which cohesion funds contribute to rural areas likely remains valid.
One suggested improvement could be to apply the Rio markers approach already used by the Commission for climate and environment tracking and proposed for use to track social spending. Instead of just a binary territorial classification (rural or non-rural), this allows for a more differentiated scale. An investment or intervention that demonstrably has no benefit for a rural area is given a score of 0, an investment or intervention that is totally dedicated to a rural area is given a score of 100, while investments or interventions that can have some spillover benefits for rural areas are given a score of 40. These percentage scores are then applied to the relevant expenditures to calculate the overall amount dedicated to rural areas.
The Rio markers approach in climate mainstreaming has been (rightly) criticised by the European Court of Auditors and others, not least when applied to CAP expenditure. Nonetheless, it would represent an improvement on what the Commission has proposed for the rural target, which does not appear to be workable and which will only store up trouble in the longer term.
This post was written by Alan Matthews.
Photo credit: Own photo.
