The European Commission has published its 2025 EU Enlargement Report, recognising Ukraine’s progress in regional policy and the coordination of European Union structural instruments. The assessment has improved from ‘limited progress’ to ‘some level of preparation’. This suggests that Ukraine is strengthening its institutional framework for regional policy and gradually aligning it with the principles of EU cohesion policy.

Recognised achievements of Ukraine

The European Commission has recognised the Government and regions for their focused work through a number of practical steps:

• An Action Plan for 2025–2027 has been adopted to implement the updated State Strategy for Regional Development for 2024–2027, which was developed in consultation with regions, communities, and experts;
• Funding for the State Regional Development Fund (SFRD) has been allocated in the 2025 State Budget, and amendments to the Budget Code have been proposed to revise the Fund’s financing principles;
• The Interdepartmental Coordination Commission on Regional Development, which ensures policy coherence at the state level, has resumed its work;
• Progress has been made in urban planning, particularly with the adoption of Government resolutions on creating an urban planning cadastre;
• Ukraine participates in seven Interreg cross-border cooperation programmes and is part of the European macro-regional strategy for the Danube region;
• Management and control systems that meet the requirements for the administration of EU programmes have been developed within the State Audit Service.

These steps indicate that Ukraine’s regional policy is entering the practical realm of instruments capable of influencing the development of territories.

‘The European assessment is a signal that Ukraine is setting out clear rules for regional development. When decisions are based on analytics, projects are formed in accordance with strategies and resources are distributed transparently, trust is established between the state and communities, and between Ukraine and the European Union,’ commented Oleksii Riabykin, Deputy Minister for Development of Communities and Territories of Ukraine.

State Fund of Regional Development as a strategic development tool

An important step highlighted by both the European Commission and the Ministry for Development is to resource and develop the potential of the State Fund of Regional Development (SFRD) as a national financial tool for regional development.

‘Filling the State Fund of Regional Development with resources is not just a budgetary issue; it is a strategic task that is crucial for Ukraine’s development. We must transform the Fund into a national instrument that truly supports regional development, ensuring that every hryvnia strengthens territories, creates jobs, modernises infrastructure, and brings real economic benefits to communities. Without this, the SFRD will not fulfil its role. However, with sufficient resources, it will become the foundation of a genuine cohesion policy,’ emphasised Oleksii Riabykin.

Next steps: European Commission recommendations

The European Commission has made recommendations to further strengthen the regional policy system and ensure the effective use of development tools:

• Fully implement the Law of Ukraine ‘On the Principles of State Regional Policy’ – clarify the structure of local strategic plans, ensure their digitisation and link them to budgetary resources.
• Align strategic, spatial and budgetary planning with the Public Investment Management (PIM) reform.
• Operationalise the State Regional Development Fund by approving a permanent methodology for allocating resources.
• Strengthen the administrative capacity of regional and local authorities in planning, implementing, and monitoring projects.
• Develop a legal framework for implementing the principle of partnership in accordance with the European Code of Conduct for Partnership.
• Improve the effectiveness of financial management, control and audit, particularly at local level.
• Set up a reporting mechanism for Ukraine Facility funds to ensure accountability and the effective use of resources.
• Review the activities of the Agency for Restoration, clearly defining its mandate and role in supporting local governments.

The Government is already working on implementing these recommendations. The main focus is on transitioning to a stable strategic planning system that applies the same rules to all regions.

‘Our goal is for regional policy in Ukraine to operate according to the same principles as in European Union countries, with clearly defined objectives, transparent accountability at every level and measurable results. It is not just about new documents or reports; it is about changing our approach so that every hryvnia of state and donor resources strengthens development. Communities need to see concrete results, such as jobs created, modernised infrastructure, local economic growth, and new opportunities for people,’ emphasised Oleksii Riabykin.

The European Commission has confirmed that Ukraine is moving in the right direction by creating a modern regional policy model focused on effective governance, partnership, and development. The next steps are to further strengthen the capacity of local authorities, align strategies with budgetary processes, and ensure transparent management of financial resources.