MEPs have approved changes to EU cohesion and social funding to address new challenges and priorities. This reform allows funds to be directed towards defense capacities, military mobility, affordable housing, water resilience, decarbonization, energy infrastructure, and civil preparedness. Dual-use investments and strategic technologies will be prioritized. Member states can reallocate resources to new priorities with increased pre-financing and co-financing rates. The focus remains on small and medium-sized enterprises and less favored regions, limiting support for large companies. Fund reallocation does not affect Rule of Law conditionality. The update received substantial support in Parliament aiming to promote balanced development and European solidarity.