Goksen Sahin, the Policy and Advocacy Lead, and Ludovica Longo, a Media Expert at ICLEI Europe, argue that the EU’s budget may not achieve a just, climate-neutral, and competitive future for our cities and regions
As Europe grapples with a convergence of crises – from climate change and rising inequality to geopolitical tensions and an escalating housing emergency – the design of the European Union’s (EU) next Multiannual Financial Framework (MFF) for 2028–2034 is pivotal. This budget is not merely a financial tool; it is a litmus test of the EU’s ambition to deliver on its promise of a just, green, and competitive future for all territories across Europe.
Local leaders are sounding a clear message: without meaningful partnerships with local and regional governments, the next EU budget risks falling short of its potential and making past mistakes.
Centralisation risks undermining progress
The European Commission’s recently published MFF proposal marks a significant shift from previous frameworks. Firstly, it combines Structural Funds and Agriculture and Fisheries Funds and proposes a new mega fund for the national governments, called the ‘European Fund for economic, social and territorial cohesion, agriculture and rural, fisheries and maritime, prosperity and security. However, this Fund fails to put cities and regions where they belong: at the heart of the policy.
Instead of empowering local and regional governments, the main delivery mechanism of this Fund – the so-called National and Regional Partnership Plans (NRPP) – amounts to little more than a single, top-down national programme, leaving little room for true regional
leadership or tailored solutions. City leaders are voicing serious concerns that this structure could lead to increased centralisation of EU funds, sidestepping the very actors best placed to implement EU objectives.
The disconnect is worrying. Cities are not passive recipients of EU support; they are frontline implementers. Municipalities are responsible for 70% of European Green Deal legislation and account for 69% of climate-related public expenditure. In 2023 alone, local and regional governments drove two-thirds of the increase in public investment across the EU. These numbers reflect cities’ central role in Europe’s transformation.
Why multilevel governance is non-negotiable
Europe faces significant challenges that require closer coordination among all levels of government. Local and regional governments, which are trusted and elected by Europe faces significant challenges that require closer coordination among all levels of government. Local and regional governments, which are trusted and elected by citizens, are ideally positioned to identify community needs, deliver essential infrastructure and services, and ensure public support. However, the current proposal for the Multiannual Financial Framework (MFF) does not adequately ensure that cities will have a formal role in designing, governing, and monitoring EU-funded programmes.
To ensure efficiency, transparency, and democratic legitimacy, Cohesion Policy must be preserved, and multilevel governance must be binding for the National and Regional Partnership plans.
In the proposed structure of the National Regional Partnership Plans, it is also unclear how city governments can continue to access EU funds if national governments fail to comply with the EU’s Rule of Law or implement policy reforms. There must be safeguards in the National and Regional Partnerships Plans to ensure mandatory cooperation with local governments in the design and implementation of the plan.
Innovation and competitiveness start in cities
Cities also play a critical role in shaping Europe’s innovation landscape. The proposals for a European Competitiveness Fund and the FP10 Research and Innovation framework are steps in the right direction. However, their success hinges on one essential factor: the formal involvement of cities as partners in setting priorities and delivering on the ground, as competitiveness and cohesion are two sides of the same coin.
Think of all of the European cities and regions that thrived thanks to European industry or collapsed after certain industries left. Or think of all of the European local authorities who collaborate actively with the industry to innovate, test and scale up. The Competitiveness Fund risks falling short of its objectives, as competitiveness cannot be sustainably fostered without recognising and leveraging the distinct strengths and needs of Europe’s diverse regions.
Clear climate and biodiversity earmarking is crucial
The European Commission’s draft budget for 2028–2034 proposes to mainstream the “Do No Significant Harm Principle” and set a joint climate and environmental target of 35% for the whole budget. While such integration may simplify accounting, it risks diluting the prioritisation of biodiversity, once earmarked separately at 7.5–10% of the annual budget under the current framework.
Without distinct targets, environmental investments by large industrial projects might be the big winners while local nature restoration and ecosystem resilience projects become secondary. Establishing separate targets for both climate and biodiversity spending would avoid competitive trade-offs and send a clear, credible policy signal to all actors of society, including cities and regions, who struggle to finance their adaptation and nature-based solution projects.
Delivering the Europe we were promised
At this crucial juncture, the EU budget must move beyond technocratic efficiency. It must become a vehicle for real progress, designed with and for the people who live in Europe’s cities and regions.
EU ambitions are bold. But without empowering the local governments tasked with delivering them, those ambitions risk remaining on paper. The EU’s next budget must become a powerful tool for resilience, competitiveness, and justice, starting in the places where Europeans live, work, and dream of a better future.
