As the EU begins to negotiate its post-2027 budget, city leaders across Europe are calling for better access to EU funding and resources, so they can provide essential public services and tackle pressing challenges like climate action, housing and social inequality.
While limited to around 1% of the EU’s GDP, the EU budget, also known as the Multiannual Financial Framework, is responsible for a much higher proportion of public investment, contributing to more than 50% of public investments in some European countries.
However, despite over 75% of Europe’s population now living in urban areas, city administrations are facing increasing challenges in securing this essential EU funding. They are also dealing with diminishing resources from all levels of governments, including their own national governments.
Only one in five mayors who responded to the Eurocities Pulse Mayors Survey 2024 expect to have sufficient resources to finance their top priorities in the coming years.
In these challenging circumstances, as the European Commission marks its first 100 days (#100DaysEU), city leaders are making it clear to the EU institutions that they must have a say in the next EU budget’s structure, priorities and implementation.
“With the European Commission currently developing a new policy agenda for cities, it is of utmost importance to match these ambitious EU policies with the adequate resources cities need to implement them,” says André Sobczak, Eurocities Secretary General.
As one of their 10 priorities for a better Europe, mayors call for EU legislation that supports local public investment, revises deficit rules and promotes fiscal decentralisation. A robust EU budget supporting sustainable urban development is essential.
To achieve these objectives, the EU institutions must rethink their budgetary priorities, by providing direct funding and capacity building support to cities, strengthening the urban dimension of the EU Cohesion Policy, and giving cities a central role in EU urban policies and decision-making processes.
A strong role for cities in EU funding programmes
Europe’s cities, as the level of government closest to citizens, are at the forefront of implementing innovative projects that align with EU policies and priorities. For every €10 spent on environmental policies, €8 is spent by cities.
However, despite their important role, city leaders are seriously concerned by the general trend to centralise EU funds. In the current EU budget, this centralised management has overlooked cities’ specific needs and made it difficult for them to access funding, undermining the implementation of EU policies.
It is of utmost importance to match ambitious EU policies with the resources cities need
In response, city administrations state they must have a direct role in deciding where EU funds are allocated. As outlined in the Eurocities Pulse Mayors Survey, 85% of European mayors want increased funding from both the EU and their national governments.
“Strengthening cities’ roles in EU policy implementation is not only beneficial for urban areas but will also support their surrounding rural areas, ensuring a more inclusive and cohesive Europe,” says André Sobczak.
To achieve this goal, a new Eurocities policy statement – Empowering Cities though the next EU budget – calls for multilevel governance to be strengthened to better tailor EU policies to cities’ specific needs, and for cities to have direct access to EU funds.
The policy statement suggests standardising application criteria across EU programmes, reducing the regulatory burden on city administrations. And to ensure EU funds are used effectively, the statement calls for a robust system of monitoring and accountability.
Alongside EU funding, the statement says cities must be supported to attract private investment. Cities can be empowered to create ‘bankable’ projects, while the European Investment Bank can also offer tailored financial products for cities, especially in climate and social infrastructure.
A strong Cohesion Policy supporting urban transformation
The EU’s Cohesion Policy is central to cities’ implementation of the green and digital objectives, as well as Europe’s territorial, economic and social cohesion.
This policy, which currently makes up one-third of the EU budget, supports cities through a range of critical and innovative projects focused on areas such as urban mobility, green infrastructure and social resilience.
Brno, for example, received over €200 million during the 2014-2020 period, which it used to implement projects related to urban transport, energy efficiency, and social infrastructure. And with €122.2 million in support, Milan has implemented numerous projects, including the development of sustainable transport systems and energy-efficient buildings.
Cutting cohesion funding would hinder cities’ ability to deliver local solutions
However, despite its clear benefits, the Cohesion Policy faces potential cuts as the EU explores reallocations in the next budget. The shifting political focus has sidelined the policy, while some national governments have started to promote a more centralised approach to EU investments, already seen in the NextGenerationEU recovery plan.
“Cutting cohesion funding would hinder cities’ ability to deliver local solutions aligned with Europe’s climate, social and digital goals, says Pietro Reviglio, Eurocities Policy Advisor. “At a moment when cities are increasingly called to solve challenges and drive transformation, Europe should strengthen the administrative and financial capacity of cities to drive urban transformation.”
In response, the new Eurocities policy statement – A Strong Cohesion Policy Promoting Urban Transformation – calls for a robust Cohesion Policy that is tailored to their specific needs and is properly financed in the EU budget.
In the statement, city leaders call for a strategic partnership with new EU leaders, with increased earmarking and streamlined budgetary processes for cities across EU cohesion and funding programmes. Given that cities are responsible for nearly 45% of all government investment in the EU, they are well-positioned to manage and optimise the use of EU resources.
Cities also state the need for enhanced collaboration across all government levels to ensure cohesive and effective policy implementation. They urge the EU to reinforce the policy’s partnership principle so cities can collaborate with the EU and national governments to develop trust-based relationships that enable them to implement innovative local projects.
“Europe’s cities are committed to bringing real on-the-ground evidence to the discussions, and they are also ready to lead by example to ensure the Cohesion Policy respects their diversity, addresses urban challenges, and drives transformation across the EU,” says Ricardo Rio, Mayor of Braga.
Recognising cities as essential EU partners
Cities are ready to to ensure cohesion policy respects their diversity...and drives transformation
As the EU moves towards its next budget cycle, empowering and supporting cities must be at the forefront of policy discussions.
Cities’ capacity to drive sustainable growth, address global challenges, and enhance social cohesion makes them indispensable partners in Europe’s future.
“By strengthening Cohesion Policy, providing cities with direct access to EU investments, and giving city leaders a central role in EU urban policy and funding mechanisms, the next EU budget can unlock the full potential of Europe’s city administrations,” says André Sobczak, Eurocities Secretary General.
“This vision will not only bolster cities’ ability to deliver on EU objectives but also ensure a greener, more inclusive and resilient Europe for generations to come.”
