Cohesion and the Competitiveness Challenge in the EU

The European Union (EU) is at a critical juncture as it grapples with a series of structural challenges that have eroded its global competitiveness. While the EU remains an economic leader, the relative decline in its global standing, exacerbated by increasing within-country polarisation and stagnation in many regions, has raised concerns about its long-term economic prosperity and political stability. We argue that improving European competitiveness cannot be achieved without enhancing cohesion across the EU. Economic, social, and territorial inequality, particularly in regions caught in development traps, undermine the Union’s economic potential and its capacity to deliver on other fronts, such as the green and digital transitions or the functioning of the Single Market. Cohesion also contributes to economic prosperity by increasing involvement in the European project and stemming the rise of Euroscepticism. Addressing inequalities through a reformed cohesion policy is, therefore, necessary for the EU to regain its competitive edge and maintain unity in the face of global challenges.