The EU Parliament and Council agreed key updates to EU cohesion policy, enabling Europe’s states and regions to reallocate funds towards new strategic priorities, such as defence, sustainable housing, water resilience, and energy transition. The EU’s Cohesion Policy reduces economic, social, and territorial disparities between regions to foster growth and ‘create a more equitable, competitive, and sustainable European Union’. EU Member States and regions looking to invest in these new priorities will benefit from higher prefinancing rates – up to 20% – to help accelerate the launch and implementation of projects. Finally, even more favourable conditions are foreseen for EU regions bordering Russia and Belarus adversely impacted by Russia’s war of aggression against Ukraine. As soon as they are published in the Official Journal of the European Commission, Member States and regions will be able to make use of the new flexibilities by submitting to the Commission amendments to their Cohesion programmes.