Negotiators have agreed on a mid-term update to the EU cohesion funding cycle to address new challenges by allowing funding to be directed towards defense, affordable housing, water resilience, and other priorities. The reform also emphasizes support for regions bordering Russia, Belarus, and Ukraine. There are adjustments to prioritize dual-use infrastructure, civil preparedness, and sustainability in affordable housing. The rule of law conditionality ensures funds cannot be reallocated in case of breaches. The agreement aims to strengthen European integration and solidarity while addressing current uncertainties.