This contribution was delivered on 5 May 2022 on the occasion of the hybrid 2022 edition of EUI State of the Union on ‘A Europe fit for the next generation?' The European economy faces three major challenges. It must achieve a transition to a digital economy, to a low-carbon and sustainable economy, and to a more inclusive economy. Making Europe’s economy more resilient has become even more important with the Russian war on Ukraine. We already know that the next phase of transformation will be felt even more acutely by citizens. We also know that the social impact of these transformations will vary across European countries and regions. Too great a disparity in economic opportunities and development possibilities jeopardizes the attractiveness of the European Union and its ability to act – both internally and externally. In the past, the European Single Market has made a decisive contribution to the development of the member states and the well-being of Europeans. But the benefits of the single market are not evenly distributed among the countries and regions of the EU. The post-pandemic economic recovery will not even out the disparities by itself. And while the overall economic fallout from Russia’s war on Ukraine is still difficult to predict, the impact will be different for different EU member states and regions. What are the likely effects of European initiatives and policies to green and digitize the European economy on regional development and cohesion in Europe? And what can European policymakers do to strengthen European cohesion along the way.