“The green transition will not be achieved with isolated investments, but with long-term, transformational investments for cities.”
This was the strong message delivered by Laia Bonet, Deputy Mayor of Barcelona, at a meeting in the European Parliament this week, where city leaders, MEPs and the European Commission gathered to discuss whether the EU’s NextGenerationEU recovery plan is providing the investment that cities need to achieve their green ambitions.
The meeting – held by Eurocities and the Parliament’s Urban Intergroup – gave cities the opportunity to share their experiences with the EU in relation to the plan and its funding instrument, the Recovery and Resilience Facility (RRF).
At the meeting, city leaders made it clear that while the recovery plan has successfully invested in many green initiatives in Europe’s urban areas, it has not sufficiently involved cities in its implementation. They also citied bureaucratic issues and explained that centralised national plans developed by EU member states lack consideration for local governments’ needs.
In response, MEPS and senior Commission officials explained that while the tool is achieving its recovery goals, the role of cities administrations in the implementation of national plans needs to be improved.
Discussions at the event also focused on recent debate at EU level on the future of the Cohesion Policy. Some EU leaders have suggested that the RRF’s faster and simpler method of dispensing EU funds could be used to deliver future cohesion investments, but cities are concerned that this will undermine their role in the design of local climate initiatives.
Protecting partnership between cities and the EU
Addressing the meeting, André Sobczak, Eurocities Secretary General, stated that the call for the RRF model to deliver cohesion funds is one that needs to be given careful consideration.
“We have some voices at EU level saying the RRF could be a simpler way to use European funds,” said Sobczak. “But simplification does not mean we should replace the partnership principle that has shown it’s positive impact in Cohesion Policy, with cities and regions having the chance to have a clear role in the design and implementation of local initiatives.
He added: “If we think we can achieve, green, sustainable economic growth by only having national governments defining what is good for people, we will lose the belief in a strong Europe.”
Echoing these comments, MEP Jan Olbrycht, Chair of the Urban Intergroup, stated that while the RRF offers several advantages, it lacks the shared management and co-responsibility which have proved important and effective for the implementation of cohesion funds.
“Local authorities speak about the potential danger of centralisation going through the RRF method,” said Olbrycht. “And what they mean is where is the shared management and co-responsibility, co-planning, co-evaluating by different multi levels of government.”
He continued: “The RRF, up to now, have been focused on centralisation at national government level, because it is seen as quicker and simpler, but it is a short term initiative and this will mean limited results over time.”
Kicking off the day with @EUROCITIES and the @Europarl_EN’s Urban Intergroup to discuss cities, green investments and the EU’s recovery fund 🌳 pic.twitter.com/80b6FzWFq5
— Giovanna Coi (@gi_coi) April 16, 2024
Failing to meet cities’ needs
Pietro Reviglio, Eurocities Policy Advisor, presented the results of the Urban Recovery Watch report, developed by Eurocities and the CIDOB (Barcelona Centre or International Affairs), which suggests that the RRF is not solid enough to drive the urban actions required for a just and green transformation. The report was recently presented by Eurocities to the European Commission’s Recovery and Resilience Task Force.
Since the recovery plan launched in 2020, cities have sought a central role in both its design and implementation. However, these calls from cities have largely been overlooked in the national plans of Member States, due to the fact consultation with local authorities was added as a non-binding requirement.
The study, which contains comprehensive analysis of national plans in nine European countries, aims to ensure the perspective of cities is recognised at EU level, and to present recommendations to improve cities’ role in the implementation of future EU public investment support schemes.
“Local authorities implement 80% of public spending related to environmental protection, which shows the key role that local authorities play in implementing investments for the green transition,” said Reviglio. “This is why we expected cities to be at the core of NextGenerationEU, but unfortunately this was not the case.”
The mid-term evaluation of the #NextGenerationEU provides evidence on the limited involvement of #LRGs in the design & implementation of the #RRPs. Something we have raised in the Urban Recovery Watch, a joint effort by @CidobBarcelona and @EUROCITIES.
👉https://t.co/zXgCfYsDqy pic.twitter.com/YE7iJFhx4a— Agustí F. de Losada (@AgustiFdeLosada) February 23, 2024
The report shows that due to time pressures and limited consultations, local involvement was limited in the design of NextGenerationEU, which meant national plans were not really built with cities needs in account.
“We know that the RRF is a crisis response mechanism, and was supposed to be fast, but we think this resulted in plans which were not territorially strong,” stated Reviglio. “In addition, most of the funds have been distributed in a generic way, with no attention to local integrated policy, making it difficult for cities to identify what opportunities exist for them.”
Reviglio explained that “territorially blind planning” meant that cities also often had to compete with each other to access centralised funds, with bigger cities having stronger resources to benefit from the opportunities.
However, despite these issues, the report found that when cities were entrusted with funds, they put forward climate initiatives that represented the objectives of NextGenerationEU and the RRF.
“Our new report shows that in most cases there are resources for urban areas, but there is not a clear vision for urban investments at national level, so the RRF has been a missed opportunity in terms of building a stronger national urban policy and coordination,” said Reviglio.
Cities are ready to shape funding instruments
Speaking to the meeting, Laia Bonet, Deputy Mayor of Barcelona, explained that city’s experience in implementing RRF funds has been “very successful” to date, with €227 million used by the city administration for projects that have improved its sustainable mobility infrastructure and “made our streets green.”
“In Barcelona, we have transformed key streets in the city to reduce urban capacity from private vehicles, foster sustainable mobility and create more spaces for pedestrians,” said Bonet. “We have expanded our bike lane infrastructure, invested in new electric and hydrogen buses, and we were able to improve our low emission zone control mechanisms, to improve air quality.”
However, the deputy mayor stated that RRF funding must now move from recovery to transformation, to support cities to introduce more ambitious climate initiatives. She also made it clear that cities must have a stronger role in the design of national funding plans.
“If we look at cities’ role in Spain, we can say that it has been reduced to executing and spending. We just received funds from our national governments and executed the investments,” stated Bonet. “But we are ready to be proactive actors in shaping funding instruments.”
She concluded: “We cities have a clear ambition for a cleaner and more sustainable European future. For me, the question now is the EU ready to include us in shaping funding instruments.”
Insufficient administrative management and support
Another city that is benefiting significantly from RRF funding is the Italian city of Bologna, which is set to receive up to €1 billion to develop several projects in the city and its surrounding metropolitan areas focused on green, sustainable urban development.
Supporting the position of Barcelona, Anna Lisa Boni, Deputy Mayor of Bologna stated that the RRF is an “incredible opportunity” for the city and will provide the local administration with the funds they need to introduce green initiatives “we could never have dreamed of”, including electric trams, energy efficient building, cycle paths, social housing and the sustainable regeneration of entire areas.
However, the Deputy Mayor explained that there are issues for cities when it comes to applying for and implementing RRF funding, primarily related to insufficient administrative support.
“There is not enough support for management and administration capacity,” said Boni. “When you have investments, you have to do a whole public tender procedure, do reporting and the whole administrative process is huge.
“In Cohesion Policy, funding comes with technical assistance which makes a real difference, but this is not the case with the RRF. Resilient city administrations can cope with these difficulties, but it puts a major burden on us.”
The Deputy Mayor also said that while RRF regulations are clear at EU level, bureaucracy at national level in Italy has led to confusion for cities. “At national level, the implementation of RRF funds is not straightforward, there are ministries that have their own rules and cities get different information from different people,” she explained.
Adding to the discussion on whether a simpler, faster model, led by national governments, is best for dispersing EU funds, Boni stressed the importance of finding the right balance.
“I think that if we keep on saying let’s simplify, like the RRF is simpler than the Cohesion policy, we need to make sure this is true,” she stated. “Is simplification the priority, ahead of democracy or effectiveness even. If local authorities are involved, we have seen studies that show investments are better delivered.”
Political clashes “derailing” funding for cities
Benedek Jávor, Head of the Representation of Budapest to the EU, explained that national political issues continue to be associated with NextGenerationEU, which need to be more effectively managed at EU level.
He said that in Europe’s central and eastern region, cities are often more ambitious that national governments in taking climate action. However, in some instances, including in Budapest, efforts have been hampered by political division and clashes at national level.
“Conflicts between city administrations and national governments can derail the original goals and targets of the RFF,” said Jávor. “Perhaps it is most visible in Hungary, but it has happened in the case of Warsaw in Poland, and there have been issues in Bologna, and other Member States too.”
He continued: “In Budapest originally, there was no money for the city designated in the national recovery plan. This is an example how a political clash at national level can prevent cities from accessing RRF funding. This can’t be ignored by the EU as it goes against the spirit of the RRF. We need to look at how this can be prevented and avoided in the future.”
Jávor also explained that there have been heavy delays in dispersing RRF funds, which has been made worse by member states’ decisions not to involve city administrations in the design of their national plans.
He stated: “We need much a stronger obligation for consultation and partnership, we require greater alignment of national plans with EU objectives and local needs, and we need the strong organisation of anti-corruption measures and frameworks to prevent the misuse of finance by political actors.”
“Too little autonomy for cities”
Responding to the views expressed by city leaders, MEP Siegfried Muresan, EPP rapporteur on the RRF, explained that the European Parliament had intended for the design and implementation of the NextGenerationEU plan to involve cities, but many member states had chosen to ignore this need.
“Time is short with this initiative and everything has to be finalised by the end of 2026,” said Mursean. “Because of this time pressure, the European Parliament advocated for the strong involvement of cities and regions, knowing that on the ground you know best what is needed in terms of investment and what the priorities are.”
However, explained Muresan, national governments wanted to design the plans themselves, without the involvement of the local level. As a result, a non-binding requirement was placed on member states to involve local levels of government in the elaboration and implementation of national plans.
“But that involvement does not enforce obligations for national governments and the European Commission does not have the tools that we wanted to reject a plan if local priorities are not properly taken into account,” said Muresan.
He added: “So, what we have now is a design that allows cities to access money for their priorities, including making urban areas greener, cleaner and less polluted, but there is too much power given to governments and too little autonomy to cities.”
EU recognition of cities’ role
Echoing these views, Johannes Luebking, Director at SG RECOVER in the European Commission, explained that NextGenerationEU has been a success, but further reforms are required that will better reflect the role of cities in achieving the EU’s climate goals.
“At city level, there are significant measures which go towards strengthening EU priorities which are targeted at city level, including green initiatives,” said Luebking. “In terms of sustainable urban mobility, there are several examples, including Barcelona where there are new bike lanes and infrastructures being implemented, in Cork there is the electrification of railways, and there is investment in new metro links in Sofia.”
Luebking said that several national plans are being reformed to strengthen local administrative capacity and to simplify public procurement rules.
However, despite all the positives initiatives being taken, he stressed that the management and administration of the RRF can be made simpler, targets can be revised to ensure easier compliance for cities, and changes to plans can be introduced.
“The much stronger involvement of cities, regions and local authorities is certainly one of the issues which should be tackled,” he stated. “Reforms can very much help cities and regional authorities to facilitate projects.”
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Download a copy of the report ‘Urban Recovery Watch: Empowering Cities in the EU Green and Digital Transition’.
This report is the latest step in a multi-year project being carried out by Eurocities, CIDOB and Barcelona City Council. The project seeks to promote the localisation of Next Generation EU, distilling key learnings that can amplify the role of cities in the EU recovery process and twin transitions, and, more broadly, bring the urban perspective into the debate on the future of EU funding instruments.
The Urban Recovery Watch report builds on the project’s first report, published by CIDOB in 2022 – Cities in the EU Recovery Process: Localising the Next Generation EU – which mapped the degree of participation of local governments in the design of several National Recovery and Resilience Plans across Europe. Building on this pioneering report, the Urban Recovery Watch report offers a second, more comprehensive analysis.
