Shielding the outermost regions (ORs): Article 349 TFEU as their legal safeguard against the recentralisation of funds

By Antonio Tejeda Encinas | Lawyer | PhD in European Union Law

In the weeks leading up to the presentation of the 2028–2034 Multiannual Financial Framework, scheduled by the European Commission for 16 July 2025, a debate has been rekindled whose legal and institutional significance bears directly on the architecture of European cohesion: the possible recentralisation of structural fund management. Behind the technical veneer of ‘administrative simplification’ or ‘efficiency in implementation’ lies a proposal to concentrate powers in the hands of the Member States. If it succeeds, it could erode the principle of shared management, blurring the effective participation of the regions and thereby undermining the very logic of Article 349 of the Treaty on the Functioning of the European Union (TFEU).

The attempt to transfer to the cohesion system the governance model used to implement the Recovery and Resilience Facility cannot be considered neutral. The two contexts differ in substance. NextGenerationEU was conceived in a spirit of urgency and exceptionality, befitting a public health emergency. Cohesion policy, by contrast, is structural, programme-based and long-term, and its effectiveness rests on territorial fit – on the capacity to adapt to the specific circumstances of each region. To claim that the national scheme can be replicated at regional level without distortion is to ignore – or deliberately sidestep – the legal pillars on which cohesion law has been built. Added to this is Article 174 TFEU, which enshrines the reduction of regional disparities as an essential objective of cohesion policy and calls for precisely the kind of differentiated, territorially based approach that some now seek to dilute.

This is where Article 349 TFEU acquires its instrumental value and its strategic relevance. The provision is not a concession but a mandate. By recognising the permanent structural conditions affecting the outermost regions (ORs) – remoteness, insularity, small size, dependence on a limited number of sectors and so on – the Treaty requires differentiated and sustained measures, both economic and administrative. Indeed, the case law of the Court of Justice has steadily reinforced a functional interpretation of this article, holding that any measure affecting these regions must take account of the differentiated impact it may have (judgment of the Court of Justice in Case C-132/14, European Parliament and Commission v Council, among others).

The recentralisation proposal, although not yet set out in legislative form, raises questions of a constitutional and statutory nature. From the Spanish perspective, Article 149.1.13 of the Spanish Constitution entrusts the State with coordinating the general planning of economic activity, but does not exclude the participation of the Autonomous Communities in implementing European policies. The ‘Estatuto de Autonomía de Canarias’ (EAC, the Statute of Autonomy of the Canary Islands), in both Article 8 and Article 27, enshrines differentiated treatment for the islands’ reality and for the specific features arising from their outermost status. And it does so not merely as a political declaration, but as a mandate for institutional and budgetary design.

Eliminating or weakening the mechanisms that guarantee this active regional participation – such as monitoring committees, the regions’ own managing units or direct channels with the Commission – would therefore be tantamount to stripping of practical substance what Article 349 TFEU establishes as the legal core of the recognition of outermost status.

This is not, then, a plea for exceptional treatment, but for maintaining a functional and legal balance that is already well established. The outermost regions are not asking for privileges, but for guarantees. Article 3(3) of the Treaty on European Union reinforces this requirement by recognising economic, social and territorial cohesion as one of the Union’s aims, which means that any reform must be interpreted through the prism of genuine solidarity between regions. And the current framework, imperfect as it is, has made it possible – precisely thanks to Article 349 TFEU – to build a direct technical and political dialogue between the ORs and the European institutions.

There is a further, essential consideration: democratic legitimacy. Regional institutions are not administrative branch offices. They are governments with their own legitimacy, with legislative and executive powers and with a direct mandate from their citizens. Reducing their role in the management of European funds means disregarding that legitimacy and undermining the principle of subsidiarity laid down in Article 5 of the Treaty on European Union.

That is why, faced with the technocratic temptation to simplify what is complex, the legal and political response of the Canary Islands – and of the ORs as a whole – must be clear: Article 349 TFEU should not be updated, reinterpreted or made conditional; it must continue to be applied in full, as a guarantee of territorial balance and as a structural clause of a European cohesion policy that, if it is to be real, cannot be uniform.

Any attempt at recentralisation should be read not as a functional evolution but as an institutional step backwards. Without the direct participation of the regions, cohesion policy ceases to be policy and becomes mere financial distribution. And Europe cannot afford to let its most powerful instrument of territorial integration be weakened precisely when it is most needed.

The Canary Islands, as an island, outermost, remote and fragile region, are not a problem to be fixed: they are a reality to be respected. And that respect begins with compliance with Article 349 TFEU on its own terms, without reinterpretations that serve as a shortcut to political decisions to recentralise.

Antonio Tejeda Encinas | Doctor of Juridical Science (SJD) / Doctor iuris – Central European University, summa cum laude (Budapest, 2014): ‘Instrumentos jurídicos de armonización normativa y soberanía regulatoria: un estudio aplicado entre la UE, América Latina y Turquía (2008–2014)’