EU Budget proposals risk cutting out cities and regions

The Local Alliance – a coalition of eight leading networks of local and regional governments – is raising the alarm over the European Commission’s proposal for the next EU budget, warning it could sideline cities and regions and undermine the delivery of key EU priorities.

The Commission’s proposal for the 2028-2034 Multiannual Financial Framework,  presented on 16 July, introduces new ‘National and Regional Partnership Plans’, intended to simplify EU funding and reduce disparities. However, the Local Alliance argues that this approach risks centralising the EU budget, weakening Cohesion Policy, and marginalising local and regional governments in the policy design and implementation. 

Without a clear earmarking of Cohesion Funds for all territories, including cities, and robust multilevel governance, local and regional authorities are unlikely to access the tools they need to implement EU priorities on the ground. Building on the Court of Auditors’ warnings of the limited impact and quality of projects funded through Recovery Funds, the Local Alliance fears that this new structure of National- Regional Plans might not be able to respond to the real transition and cohesion needs of communities. 

The proposal also fails to clarify how cities and regions would be affected if national governments fall short on reform commitments or breach horizontal conditions such as the Rule of Law. This could jeopardise progress on critical local goals, from clean transport and affordable housing to inclusive communities, the creation of jobs and quality public services, while weakening democratic governance and the principle of multilevel democracy.

The Alliance welcomes the proposed European Competitiveness Fund and the FP10 Framework Programme for Research and Innovation, recognising their potential to address productivity and innovation gaps across regions. However, both instruments must ensure meaningful involvement of cities and regions in priority setting and delivery, as competitiveness and cohesion are two sides of the same coin, as highlighted in the Letta Report. 

As the budget negotiations move forward, the Local Alliance calls on the European Parliament and the European Council to seize this crucial opportunity to strengthen the role of cities and regions, safeguard cohesion policy, and ensure the EU budget delivers tangible results for people across Europe.

Ahead of the EU budget negotiations, local leaders call for: 

• Reforms and investments are to be defined through a multilevel governance approach. Safeguards must be included in the National and Regional Partnerships Plans to ensure mandatory cooperation with local governments in the design and implementation of the plan.
• The territorial chapter of these plans must be clearly stated as an obligation and not as an option left to the discretion of central governments.
• Clear and enforceable safeguarding mechanisms to ensure that local and regional authorities can directly access EU funds, especially in cases where national governments delay or restrict disbursements.
• Concrete institutionalised cooperation with cities and regions in the European Competitiveness Fund (ECF) and FP10, and we urge the EU institutions to involve local and regional governments as partners in setting priorities and strengthening place-based innovation.

 Notes to editors:

The Local Alliance represents the eight leading networks of European local and regional governments, ACR+, CEMR, Climate Alliance, Energy Cities, Eurocities, FEDARENE, ICLEI Europe and POLIS working together to ensure the next EU budget 2028- 2034 delivers for people by empowering local and regional governments in delivering the transition on the ground.

Christoph Schnaudigel, Co-President of CEMR; Vice-President of the German Section of CEMR (RGRE); President of the County of Karlsruhe, German County Association, said: 

“After analysing the European Commission’s proposal for the EU budget, it is clear that local and regional governments across Europe must mobilise. The proposal fails to uphold economic, social, and territorial cohesion as a core objective. As a result, the share of the budget allocated to Cohesion Policy — including social and territorial development — has been reduced, with real consequences for the quality of life across Europe. Furthermore, centralising decision-making towards member states will not help address the realities and challenges of the territories, making EU funding less efficient. We must act decisively in the coming months to reverse this and defend a strong, inclusive Cohesion Policy, as well as the respect of multilevel governance”.

For more information, contact:

BORDELOT Federica

Director – Policy & Impact

Don’t repeat Recovery and Resilience Facility mistakes: local governments must shape EU’s long-term budget

As the European Commission prepares to unveil its proposal for the post-2027 Multiannual Financial Framework today, Wednesday (16 July), attention is turning to how the EU will shape its long-term investment strategy.

What is at stake is not just the amount of funding, but how and with whom those resources will be planned and implemented.

At the EU annual budget conference in May, EU Commission President Ursula von der Leyen made a shift in tone.

For the first time, she spoke not only of “national” plans, but of “national and regional partnerships for investments and reforms.”

This is more than a semantic change, but words must be followed by action. Without concrete steps, even the most inclusive language risks remaining just words.

The new proposed investment architecture is set to build on lessons from the Recovery and Resilience Facility (RRF). But unless a key flaw of the RRF is addressed — namely, the lack of involvement of local actors — the same mistakes will be repeated.

If we want these partnerships to succeed, they must be co-created with the local and regional governments that will implement them. From green mobility to housing and digital infrastructure, success also depends on getting the governance right.

Luckily, we do not need to start from scratch. The word “partnership” recalls an existing model: the Partnership Agreements used in the Cohesion Policy. These already require member states to involve local and regional governments in shaping investment strategies.

In countries like Poland and Portugal, it has led to investments aligned with real local needs—revitalising industrial areas, developing green transport—showing that when local actors are at the table, EU funding delivers real impact.

But this is about more than funding. As the EU aims to pair investments with reform, multilevel governance must become a central principle of the reform agenda itself. We are therefore calling for:

1. A co-creation approach that underpins new investment and reform partnerships, with transparent and structured mechanisms to involve local and regional governments in shaping priorities, both at the national level and within EU processes such as the European Semester.

2. Multi-level governance must be embedded in the reform dimension of these partnerships, ensuring that Member States not only consult but also empower local and regional governments to act as both planners and implementers.

3. A funding model that respects the principle of subsidiarity, with flexible, bottom-up approaches and less stringent thematic concentration decided at the Commission level to avoid the repetition of the challenges recalled in the mid-term revision of the RRF.

The EU stands at a turning point. The next long-term budget is a chance to move towards a more democratic, grounded, and effective policymaking, or to repeat the mistakes of the past. Let’s not miss this chance. Let’s make partnership the rule, not the exception.

Signatories: 

• Christopher Schnaudigel is co-president of the Council of European Municipalities and Regions (CEMR), vice-president of the German Section of CEMR (RGRE), and president of the county of Karlsruhe (German County Association)
• Ľubica Karvašová is an MEP, vice-chair of the Committee on Regional Development, Renew Europe coordinator in REGI Committee
• Vladimir Prebilič is an MEP, rapporteur on Simplification of the Cohesion Policy, Greens/EFA Coordinator in the REGI Committee.

*****

This opinion article was published on EU Observer on 15 July 2025. You can read it here

For more information, contact:

BORDELOT Federica

Director – Policy & Impact