What does the next 7-year EU budget mean for cities?

24 July 2020

The European Commission has put its cards on the table, and this week national leaders agreed to the biggest ever EU budget proposal, to support recovery in Europe.

While the European Parliament now has to have its say, for the budget to enter into force on 1 January 2021, there are already many takeaways for cities to take note of.

The overall amount of the EU Budget will be €1,074bn which, while slightly less than previously, now sits alongside an additional €750bn in the form of the EU’s new recovery fund, making this budget the biggest ever.

The so-called ‘Next Generation EU’ recovery fund is a two-year temporary reinforcement of the budget supporting a fair and just recovery in the EU. The bulk of the money will be channelled to member states through the new Recovery and Resilience Facility, which is very relevant for cities. It provides the basis for massive public and private investments, focusing on creating jobs and repairing the immediate damage caused by the COVID-19 whilst supporting the Union’s green and digital priorities.

Across Europe, it is cities that have been the hardest hit by the pandemic and economic crisis. It is also cities that are the drivers of the green, digital and just transitions that Europe needs for recovery.

The overall size of the EU’s cohesion policy, the priority funding that aims to limit regional disparities, and the main source of funding for cities, remains mostly unchanged. Despite this, and of key concern to cities, many centralised programmes, such as Horizon Europe and Digital Europe, which are essential to grow resilience in Europe and which cities have direct access to, see significant cuts when compared with earlier proposals.

With this in mind, and given the need for swift deployment of the recovery funds, cities have an opportunity to put their track experience to good use, and come up with proposals for projects making use of these recovery funds, especially via the Next Generation EU ‘Resilience and Recovery facility’ which focusses on:

  • Green transition – projects that can implement the EU Green Deal
  • Digital Transformation – projects that can support a deeper and more digital single market
  • Inclusive recovery – projects that can support a fair and inclusive recovery

Check out our infographic or get in touch for more details on what cities can do: