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Impact community Cohesion106

GAUDRON Marine
In EU budget, EU budget, Impact community Cohesion, Impact community Cohesion, Latest, Publications, Territorial development, Territorial development

Safeguarding local investments 

Investing in Europe - News

Why EU economic governance reform must protect municipalities’ ability to invest 

Read full position paper

The Council of European Municipalities and Regions (CEMR) has warned that the upcoming reform of the EU’s economic governance framework, including the Stability and Growth Pact (SGP), could risk undermining the investment capacity of municipalities and regions across Europe. 

Local and regional governments are responsible for almost half of all public investments in the EU. These investments are essential to deliver on European priorities such as the green transition, digitalisation, and resilient infrastructure. However, the proposed introduction of net expenditure ceilings risks unintentionally penalising local governments, who generally borrow only for long-term investments in capital assets. 

Reform and its implications 

The European Commission has announced plans to simplify the SGP by replacing certain rules, including the medium-term objective (MTO), with a new system of net expenditure ceilings. While CEMR welcomes the move away from the MTO, which had previously constrained local investment through deficit limits and reduced transfers from central governments, it raises serious concerns about the impact of the new ceilings. 

Applying net expenditure limits to municipalities would create three major risks: 

  • Higher administrative burdens arise because local governments do not use the net expenditure concept in their accounting. 
  • Political mismatches, since local electoral cycles rarely align with national fiscal programming. 
  • Cuts in public investment, as postponing infrastructure projects, are often the only quick adjustment available under tight expenditure ceilings. 

This is even though local government debt levels are prudent in every EU Member State, and are already strictly monitored under national rules. 

The solution: exclude local expenditure 

CEMR is therefore calling for the exclusion of local government expenditure from the definition of net expenditure ceilings in the reformed SGP. Much like cyclical unemployment spending is excluded, removing local investment from these calculations would ensure municipalities can continue to provide essential services, maintain infrastructure, and invest in the future without being penalised by centralised fiscal targets. 

At a time when Europe urgently needs stronger local action to address climate, digital, and social challenges, weakening municipalities’ ability to invest would be counterproductive. Protecting local public investment within the EU’s economic governance reform is not just about budgets, it is about safeguarding Europe’s capacity to deliver on its ambitions. 

Read the position paper here 

For more information, contact: 

GAUDRON Marine
In Impact community Cohesion, Impact community Cohesion, Latest, Publications, Territorial development

Cohesion policy funds 2021-2027

European Town - News

Cities and municipalities in the driving seat for EU Cohesion Policy funds?

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What is the common feature between the trolleybuses in Otsravian metropolitan area (Czech Republic), the local food businesses in Ljubljana Urban Region (Slovenia) and the traditional dance festival in Saint-Gervais-d’Auvergne (France)? They all benefited from the European Cohesion Policy through integrated territorial investments (ITI) or community-led-local development (CLLD).
 
Behind the term “EU Cohesion Policy” we can find a variety of programmes and fundings such as the European Regional Development Fund (ERDF), the European Social Fund (ESF) or the European Agricultural Fund for Rural Development (EAFRD) although the latter is now directly attached to the Common Agricultural Policy.
 
In practice, these funds reach thousands of towns, cities and regions, as well as other beneficiaries through the intermediation of “Managing Authorities” which can be national Ministries or Regions. But there are two lesser-known dimensions of these funds which are directly  implemented on the ground: the so-called ‘ITI’ and ‘CLLD’
 
ITI and CLLD
 
Integrated Territorial Investments (ITI) and Community Led Local Development (CLLD) are the main mechanisms used to implement European Cohesion Policy funding in an integrated and place-based manner. Using these tools to implement Cohesion Policy funds is a guarantee that local governments and local stakeholders will be closely associated in the design, implementation and monitoring of the EU funds they receive.
 
They can allow the use of different funds in an integrated way. For instance, a rural municipality interested in a social inclusion project could combine ESF and EAFRD in a single, comprehensive project.
 
On paper ITI and CLLD are great tools for local and regional governments… But how do they translate in practice?
 
In 2015, we delved into the analysis of the use of the ITI  in different Member States. A few years later, with the start of the new programming period 2021-2027, we reiterated the experiment to understand how these tools were used in practice in the previous period and what the lessons learned and changes in their implementations. Click here to read the full study.
 
To do so, CEMR reached out to some of its member associations to gather feedback on the implementation and planning of ITI and CLLD tools from the perspective of cities and municipalities.
 
Highly appreciated tools, but some difficulties in implementation remain
 
Overall, the many feedbacks we received were quite positive. ITI and CLLD are considered great instruments thanks to their adaptability to local needs and specificities. They empower local authorities, and by doing so help raise their capacities in managing EU funds. But they also strengthen multi-level dialogue between the local authorities and the Managing authorities (either the Ministry or the Region). Hence reinforcing the trust between the different governance levels.
 
All is not yet rosy either: some challenges remain for fully tapping into the potential of these tools such as the administrative burden still inherent to Cohesion policy funds in general. In CEMR’s new analysis, we also identified some recommendations to improve the uptake of ITI and CLLD in the current and future programming period.

Read the study here

For more information, contact:

GAUDRON Marine
In Impact community Cohesion, Latest, Local finances

Local Finances

Local Finance - News 2023

How to unleash local public investments for the green transition

As the EU struggles to find ways to pay for industry transition towards a carbon-free economy, the finances of local governments play an often-neglected role in delivering the needed investments, argues a report by the Council of European Municipalities and Regions (CEMR).

The report retraces the development of local finances over the past decade and how they can influence the ability of municipalities to finance the green transition.

For example, the report found that countries with a more decentralised structure further decentralised their public finances in the past decade, while those with more centralised public spending became even more centralised.

“Federal countries, for example, Germany, went towards more decentralisation,” CEMR’s Vincent Furlan told EURACTIV.

According to the report, this polarisation is relevant because countries with decentralised public finances tend to invest more in the green transition.

“More centralised countries have lost some margin of manoeuvre in terms of investments as a part of their total expenditure,” Furlan said. However, he stressed that this was not necessarily a causal relation between the two as the lower investment appetite of countries with more centralised public finances may be caused by other factors.

Unrelated to centralisation, Furlan stressed that “local and regional governments have a significant weight in investment expenditure”.

“Local and regional governments invest in areas determinant for the green transition.”

For example, local transport infrastructure or waste management facilities are often governed locally and can have a significant environmental impact.

However, municipalities and regions are often constrained in their ability to invest in the green transition as fiscal rules, and the lack of access to financial markets can make it hard for regional governments to undertake the necessary investments.

The issue that too-strict fiscal rules can affect investments has long been a topic of debate at the EU level. However, this debate usually focused on national rather than regional or local, finances. Then, in November this year, the European Commission announced its intention to reform the national fiscal rules and allow member states to invest more in the green transition.

Yet, the local level is often forgotten in these discussions. In a position paper, CEMR argued that the EU’s current fiscal rules constrain local finances since local government debt is included in the calculation of total national debt.

“More flexibility should be granted for local and regional governments, particularly when investing for long-term and sustainable development,” the paper reads.

However, excluding local debt from the national debt calculations could incentivise governments to reallocate their expenditure and their debts to local governments, which might give local governments more leeway to invest, but which also might undermine the effectiveness of the fiscal rules.

Another obstacle to the green investments of local and regional governments is the lack of access to financial markets. In contrast to national governments, local and regional administration cannot count on the same investor appetite for their debt issue and have more difficulty accessing funding.

And as their debt is usually considered riskier, they will also have to pay higher interest rates.

But better access to financial tools might expand the options for local governments to fund themselves. “Because local governments can make a large contribution to the green transition, granting them more access to financial instruments would be beneficial,” Furlan argued.

This article was first published on EURACTIV‘s website.

BORDELOT Federica
In Climate, Climate, Energy, Energy, Housing, Housing, Impact community Climate, Impact community Climate, Latest, Publications

Smarter building rules in Europe

Housing - News

EPBD revision: Local flexibility and long-term planning key to success, say CEMR and Housing Europe

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EPBD revision: Local flexibility and long-term planning key to success, say CEMR and Housing Europe 

The Council of European Municipalities and Regions (CEMR) and Housing Europe have joined forces to publish a set of recommendations on the European Commission’s proposal to recast the Energy Performance of Buildings Directive (EPBD). While both organisations fully support the ambition to decarbonise buildings across the EU, they warn that the proposal must better reflect the realities on the ground. 

Local and regional governments, as well as providers of public, social, and cooperative housing, are critical actors in delivering the EU’s climate objectives. But a one-size-fits-all approach will not work. 

The joint position paper outlines three key recommendations: 

  1. Respect local differences through subsidiarity and adaptability 
    The EPBD must allow member states and local authorities to tailor building codes to their own context. Setting EU-level definitions for zero-emission buildings without a clear methodology risks creating uncertainty and undermining national efforts. Other areas, such as fire safety and asbestos removal, should remain the competence of national or local governments. 
  1. Provide a stable and realistic framework for renovations 
    Renovating buildings is a long-term process that requires careful planning. The proposed EPBD introduces tight deadlines and shifting labelling systems, making it nearly impossible for local authorities and property owners to comply effectively. CEMR and Housing Europe argue for a more predictable timeline that reflects labour shortages, market dynamics, and tenant affordability. 
  1. Support zero-emission construction with energy system flexibility 
    While new buildings must meet high standards, member states should retain the freedom to choose their energy sources. That includes not only on-site renewables, but also low-carbon energy from the grid, waste heat, and energy recovery, all in line with the EU waste hierarchy. 

Ultimately, the success of the EPBD will depend on how well it enables local and regional actors to deliver results. CEMR and Housing Europe are clear: the path to climate-neutral buildings must be ambitious but flexible, fair and grounded in local realities. 

Read the full policy paper here  

For more information, contact: 

GAUDRON Marine
In EU budget, EU budget, Impact community Cohesion, Impact community Cohesion, Impact community Society, Latest, Local democracy, Publications, Territorial development, Territorial development

Bringing Europe closer to its citizens 

EU Cohesion Policy - News

How ITI and CLLD strengthen local democracy, multi-level governance, and place-based development in EU cohesion policy 

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The European Union’s Cohesion Policy is one of its most important instruments for promoting economic, social, and territorial cohesion across its member states. With nearly €392 billion allocated for 2021–2027, it tackles inequalities between regions while supporting a greener, more competitive, and more inclusive Europe. Central to this effort are Integrated Territorial Investments (ITI) and Community-Led Local Development (CLLD), two tools designed to put territorial needs and local actors at the heart of EU funding. 

Why integrated tools matter 

The foundations for a place-based approach were laid in the 2009 Barca Report, which argued that EU policy should focus on unlocking the potential of specific territories while addressing persistent exclusion. ITI and CLLD, introduced in 2014, operationalise this vision by giving local and regional governments a stronger role in programming, governance, and project implementation. 

These tools provide flexibility, enable cooperation across levels of government, and ensure that EU funds target the real needs of communities. For municipalities, regions, and their associations, they are among the most valued features of cohesion policy. 

ITI: Integrating strategies across territories 

ITI allows funding from several EU programmes to be combined in support of integrated strategies. It has been especially used for urban development, where at least 8% of ERDF funding is earmarked for sustainable urban projects. While designed to cover any functional area, urban, rural, or mixed, ITI is most common in metropolitan settings, where challenges like mobility, housing, and regeneration demand integrated solutions. 

CLLD: Communities leading the way 

CLLD builds on the LEADER approach to rural development, empowering local action groups of citizens, NGOs, and businesses to design and implement strategies. While most common in rural areas, it has the potential to strengthen participation and ownership in cities, too. CLLD fosters trust, encourages bottom-up innovation, and helps address the needs of vulnerable groups such as youth, migrants, or elderly people. 

What worked well 

CEMR’s analysis highlights several clear benefits: 

  • Flexibility and relevance – ITI and CLLD adapt EU funding to local needs. 
  • Capacity-building – local authorities gain expertise in managing EU programmes. 
  • Stronger governance – fostering trust and cooperation between local, regional, and national levels. 
  • Visibility of EU action – projects close to citizens showcase the value of EU funds. 
  • Community cohesion – encouraging cooperation among local actors and building metropolitan or regional identity. 

Persistent challenges 

Despite their value, integrated tools face obstacles: 

  • Administrative burden remains high, with complex procedures and slow fund absorption. 
  • Limited flexibility – strategies must still align with national operational programmes, sometimes restricting genuine local priorities. 
  • Time pressures – integrated projects require trust and participation, often at odds with the EU’s strict N+3 spending rule. 
  • Uneven use of PO5 (“Europe closer to citizens”) – some member states underfund this priority despite its direct link to ITI and CLLD. 
  • Urban uptake of CLLD – adapting the rural-focused model to cities remains difficult. 

CEMR recommendations 

Looking ahead, municipalities and regions urge the EU to: 

  • Maintain and strengthen integrated tools in cohesion policy. 
  • Simplify procedures at both EU and national levels, avoiding “gold-plating.” 
  • Clarify guidance on multi-funding, project selection, and the use of PO5. 
  • Exempt ITI/CLLD projects from the N+3 rule to allow more time for participatory approaches. 
  • Reintegrate the EAFRD into the Common Provision Regulation to ease multi-fund projects. 
  • Ensure meaningful local involvement in programming, implementation, and evaluation. 

Conclusion 

ITI and CLLD have proven their worth as vehicles for place-based development, democratic participation, and closer cooperation between Europe and its citizens. While challenges remain, strengthening these tools is essential for making the EU’s cohesion policy more visible, more inclusive, and more responsive to local realities. 

Read the study here 

For more information, contact: 

GAUDRON Marine
In Energy, Latest, Local finances, Local finances, Publications

Sustainable local finances in Europe

Sustainable local finances - News 2022

CEMR releases landmark study on local finances in European countries

Discover the online tool

People depend on quality local public services and infrastructure every day. Reliable buses, insulated public housing, good schools or clean energy: all of these and more depend on healthy and sustainable local public finances to be developed and maintained.

That’s why the Council of European Municipalities and Regions (CEMR) is releasing a fully-fledged online report and tool entitled Local Finances and the Green Transition in Europe. This one-of-a-kind study provides data and analysis on the trends in local and regional finances in 40 European countries over the past 10 years. The study offers a bird’s eye view of both changes in subnational finances and the remarkable diversity of national situations.

“This report is essential reading for policymakers, politicians and academics. Only by understanding local public finances and unlocking futher investments can we achieve the sustainable and resilient societies our people and planet need”, said CEMR Secretary General, Fabrizio Rossi, who added: “If this report shows one thing, it is that well-funded municipalities, counties and regions are essential to taking care of our people and realising the environmental transition“. 

Revealing figures and trends as observed over the last decade

The study reveals for instance that despite making up 25% of all public spending, local and regional governments finance 54% of all public investment. This reflects the leading role of municipalities and regions in investing in areas such as energy efficient housing, smarter public transport and local environmental protection. The climate and energy transition will only happen by working with local and regional governments.

Also noteworthy is that subnational government debt is at a manageable level in the 36 countries where comparative data was available. In fact, local debt is low and stable, a mere 4.8% of GDP on average. By way of comparison, general government debt increased by the middle of the decade to 67% of GDP (and to 81% in 2020).

While browsing through the online study, you will also come across a special section on the impact of the EU’s €720-billion post-COVID recovery plan on local and regional governments. This chapter looks in particular at the implications for the green transition and territorial cohesion.

The data shows clearly that the share of green transition among the main RRF spending areas is higher in the decentralised countries. Stronger local and regional governments can support more recovery and resilience programmes and actions.

A dynamic and interactive online tool

“Local Finances and the Green Transition in Europe” is available as an interactive online tool  as well as in PDF  format. The online tool contains:

The study is currently only available in English. The French version is under development.

The study was launched on 10 November 2022 at the occasion of a seminar bringing together representatives of many of CEMR’s member associations, the OECD, KDZ and the study’s co-author Gábor Péteri.

For more information:

GAUDRON Marine
In Impact community Cohesion, Latest

Next Generation EU

Cohesion Policy - News

State of Play – Recovery and Resilience Facility

In 2020, faced with the unprecedented Covid-19 pandemic, European Union (EU) leaders and the European Commission put in place an equally unprecedented response package: Next Generation EU. It allows the EU to borrow large amounts of funding from the financial markets and to allocate these to Member States. The Next Generation EU’s centrepiece, the Recovery and Resilience Facility (RRF), provides grants and loans over a period of 5 years, amounting to €724 billion (in current prices) in total, to support the rebound of EU economies following the pandemic.

EU Member States have been required to submit national Recovery and Resilience Plans (RRPs), which outline their respective investment and reform strategies for using the RRF financing. The RRPs should outline a 5-year reform and investment strategy and set the pace of transformation needed for robust and fair digital and sustainable transitions. Member States have recently been given the opportunity to adapt their national plans to consider the new challenges thrown up by the war in Ukraine and its impact on the cost of energy supplies.

Local and Regional Governments’ involvement

Since early on in the process, CEMR and the European Committee of the Regions (CoR) have worked together to push for the fullest and most meaningful involvement of local and regional governments (LRGs), both in the design and the implementation of the Recovery and Resilience. An initial study produced jointly by the CoR and CEMR and published in January 2021 highlighted the early efforts of LRGs to be involved in the preparation of the RRPs.

The results demonstrated the extensive problems experienced by LRGs, the lack of consultation on their national RRPs and even on the occasions where they were consulted, their contributions were often overlooked.

In May 2022 CEMR and CoR prepared a follow-up study, to explore the extent to which the situation had evolved positively and whether or not LRGs felt that their involvement in the implementation of the RRPs had improved. The results of this follow-up study were more mixed but the general feeling was that LGRs were concerned that the lack of partnership arrangements in delivering the RRPs was leading to less effective delivery of the RRPs on the ground.

Current developments

Member States are advancing with the implementation of their national recovery plans, setting out both new investments and reforms, and consequently a considerable amount of RRF funds have now been disbursed. It remains noticeable however, that a significant amount of the loans available remain unrequested by Member States. While there is potential for synergies between cohesion policy and the RRF, there is also the potential for overlap and a competition for funding due to insufficient coherence between the different instruments. Concerns are growing that prioritising the RFF could lead to a reduction of cohesion resources after 2027. There are growing calls for the opening of a serious debate on how to ensure coherence among different EU cohesion instruments, as well as which approach can deliver on EU objectives in a world where shocks have unfortunately become not only more frequent, but also more varied in nature.

At the start of summer 2022, the European Commission published its Review report on the implementation of the Recovery and Resilience Facility, setting out the Commission’s views on the performance of the RRF to date. This has since been followed by the first in a series of audits on the Recovery and Resilience Facility.

Based on a selected sample of six member States (France, Germany, Croatia, Greece, Spain and Italy), the European Court of Auditors (ECA) assessed the suitability of the RRFs for each of these countries, the guidance provided to each Member State and compliance with the RRF regulation. Overall the ECA’s felt that the Commission’s assessment was generally appropriate, given the complexity of the process and the time constraints. However, the ECA highlighted a number of weaknesses in the process and that risks to the implementation of the RRF remain.

The CoR too is preparing an opinion on the implementation of RRF following its earlier work and the publication of the European Commission’s Review report. We wait to see whether or not, a year on from its last opinion, the CoR now believes that the implementation of the RRF will enable important public funds to properly reach the needs of our communities, municipalities and regions. The CoR will adopt its opinion during the plenary session in February 2023.

GAUDRON Marine
In Impact community Cohesion, Latest, Local finances

OECD Conference

Promoting the Global Goals - News 2023

Conference to launch the new SNG-WOFI

The OECD and United Cities and Local Governments (UCLG) are organising an in-person conference to launch the third edition of their World Observatory on Subnational Government Finance and Investment (SNG-WOFI).

The goal of the Observatory is to increase knowledge, promote dialogue on multi-level governance and subnational finance around the world as well as to monitor the implementation of the Sustainable Development Goals.

This 2022 edition includes data from 135 countries, covering almost 90% of the world surface area, 93% of the world population and 94% of global GDP.

The conference will bring together national and subnational governments, international organisations and stakeholders from around the world involved in this wide-ranging project, to present the key findings of the new edition and to discuss current challenges related to subnational finance and multi-level governance, in light of new data and analysis.

CEMR’s Finance Spokesperson, Flo Clucas, will take part in the Session 3 on : How can subnational government access to external resources be improved to finance infrastructure investment?

For more information and to register, please fill in this online form. If you have any questions, please contact Leslie Greenhow

GAUDRON Marine
In Impact community Cohesion, Local Insights, Territorial development

Urban renewal

Urban renewal - News 2022

Cadde54 Bazaar: Relaunching urban life after the pandemic

Revitalising urban life has become particularly important in the wake of the coronavirus pandemic. Shopping centres create jobs and businesses by providing useful goods and services, but they can also energize a neighbourhood and give it a unique identity.

That was the ambition of the “Cadde54 Bazaar Project” in Serdivan, a city of 160,000 people in northwest Turkey. Cadde54 combines the logic of a Turkish bazaar with cultural and social functions. Visitors can walk around several open-air plazas or spend time in cafes where they can taste local and international cuisine.

It is noteworthy that Cadde54 Bazaar’s launch coincided with the post-pandemic period. Lockdowns and the closing of public buildings left people longing to spend time in open spaces. Unlike indoor shopping centres, at Cadde54 visitors can walk in the open air in pleasant and healthy conditions.

The project has led to the creation of new office spaces, businesses and jobs. The centre brings together, for the first time in Sakarya Province, local tradesmen and world-class companies under the same roof.

Cadde54 Bazaar also contributes to a healthy and sustainable lifestyle. The centre features a vegetation-rich green roof and greywater recycling to limit environmental impact. The area is pedestrianised and features a sports centre. The project has also included the creation of new accommodation in the area.

​The project, completed in April 2022, received 1.5 billion Turkish lira (82 million euros) in investments from the municipality.

GAUDRON Marine
In Impact community Cohesion, Latest, Territorial development

Muni World 2022

Muni World - News 2021

Save the date: Muni World 2022, an event focusing on smart cities

The Federation of Local Authorities in Israel, Masham, is organising its annual event MUNIWORLD 2022, in partnership with the municipality of Jerusalem. It is taking place from 6 to 8 December, in Tel-Aviv and Jerusalem.

Unique stages for global brainstorming on urban challenges and city innovation, the MUNIEXPO 2022 Exhibition, and the 6th international MUNIWORLD Conference being held as an integral part of it will host exhibitors, decision-makers from Israel and abroad, and thousands of visitors.

Discover last year’s MuniWorld with a short video.

For more information: click here!

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