EU budget 31

Advisor – Territorial Cohesion & Local Finances

BENNIS Hamza In EU budget, EU budget, Impact community Cohesion, Impact community Cohesion, Local finances, Local finances, Press, Publications, Territorial development

Localising the European semester

CEMR-EPSU project shows local governments and social partners remain under-involved in shaping EU economic governance

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The European Semester, introduced in 2010 to coordinate national economic, employment, and social policies across the EU, has become the backbone of EU economic governance. Its annual cycle guides Member States’ reforms and budgets under the Stability and Growth Pact and the Europe 2020 strategy. Yet, despite its importance, the role of local and regional governments (LRGs) and social partners in this process remains limited.

A joint project by the Council of European Municipalities and Regions (CEMR) and the European Public Service Union (EPSU), carried out between 2018 and 2020, examined how and why subnational actors are involved in the Semester. It assessed the rationale for their participation (“why”), the mechanisms used in different Member States (“how”), and the quality of this involvement (“how well”).

Findings suggest that while LRGs are increasingly acknowledged, their input often depends on existing national dialogue structures and the political will of central governments. Social partner organisations, particularly trade unions representing the local government sector, are even less involved, with national peak organisations rarely consulting their membership in depth before feeding into the process.

The project also highlighted good practices: more systematic consultations, stable structures for dialogue, and efforts to ensure that recommendations (Country-Specific Recommendations, or CSRs) reflect local realities. However, in many cases, LRGs and social partners have little influence over the drafting and implementation of National Reform Programmes (NRPs), undermining ownership of the Semester.

From a broader perspective, the research confirmed that EU recommendations are more likely to be followed when countries face strong market pressures, when reforms are tied to EU financial rules, or when smaller states seek EU legitimacy for their policies. But there is still a gap in understanding whether stronger involvement of LRGs and social partners leads to better implementation of reforms, a gap that future research should address.

The report concludes that the Semester can only be effective if it becomes more inclusive. To strengthen ownership and impact, national governments and EU institutions must ensure that local and regional governments, as well as social partners, are systematically and meaningfully involved in shaping and implementing economic and social reforms.

Read the study here

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BENNIS Hamza

Officer – Employment, Digitalisation and Public Services

THOMAS Carol In EU budget, EU budget, Governance, Governance, Local democracy, Local democracy, Local finances, Local finances, Press, Publications

Lessons from the COVID19 Pandemic

Local and regional governments need stronger support, recognition, and autonomy in times of crisis

As Europe continues to grapple with the long-term consequences of the COVID-19 crisis, the Council of European Municipalities and Regions (CEMR) highlights the vital role of local and regional governments during the pandemic and the urgent need for stronger multilevel governance and financial resilience.

From the earliest days of the pandemic, local and regional authorities were at the frontline: managing public health measures, ensuring social services, maintaining education and local transport, and supporting vulnerable groups. They also had to cope with increased expenditure while facing plummeting revenues, a phenomenon CEMR described as the “scissor effect.” Despite their efforts, many municipalities and regions received little compensation or recognition for their critical role.

In light of these challenges, CEMR has outlined ten key recommendations to ensure more effective responses in future crises and support long-term resilience:

Recognition of essential services
Local and regional governments must be acknowledged as essential actors in crisis management. Their competences, funding, and resources must be guaranteed and reinforced, with better alignment of policies across government levels.
Equal access to EU recovery tools
Municipalities and regions should be directly involved in shaping and implementing national recovery plans, particularly in the context of the Recovery and Resilience Facility. This means ensuring equal access to EU funds, simplification of procedures, and stronger monitoring mechanisms.
Flexible financial frameworks
The EU fiscal rules need to evolve. CEMR calls for more flexibility for local and regional governments in borrowing and investment, especially for long-term sustainable projects. Debt incurred for these purposes should be excluded from deficit calculations under the Stability and Growth Pact.
Stronger digital transition
The pandemic highlighted the digital divide across Europe. More investment is needed to strengthen local digital infrastructure and capacity, especially in rural and underserved areas. Local and regional authorities must play a central role in the EU’s digital transition.
Health, care, and social services
Municipalities and regions are often responsible for delivering or coordinating health and care services. They must be involved in national health policy planning, with proper resources and long-term investment to ensure quality and accessibility.
Support for local economies
Cities and regions played a key role in supporting local businesses and workers during the crisis. The EU and Member States must ensure that economic recovery policies reach the local level and that municipalities can take proactive measures to protect local economies.
Strengthening social cohesion
COVID-19 amplified existing inequalities. Local authorities are best placed to address social exclusion, support vulnerable groups, and reinforce community resilience, but need adequate funding and policy support.
Better governance
The pandemic exposed the weaknesses of top-down crisis responses. Multilevel governance, subsidiarity, and the partnership principle must be strengthened to ensure effective cooperation and faster, more tailored solutions.
Green recovery
Recovery funds and policies must prioritise sustainability. Local governments are already implementing the Green Deal at ground level, through sustainable mobility, energy-efficient buildings, and green public spaces. Their role must be formally supported in EU policy and funding instruments.
Crisis preparedness
Europe must develop better tools for future emergencies. This includes building the capacity of local administrations, sharing best practices, and ensuring municipalities have access to critical resources when crises hit.

Conclusion
The COVID-19 pandemic has been a stress test for European governance and local governments passed it with resilience and determination. Now, CEMR urges EU institutions and Member States to turn these lessons into action. By strengthening the role, autonomy, and resources of local and regional authorities, Europe can better prepare for the next crisis and deliver a fair, green, and inclusive recovery for all.

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THOMAS Carol

Senior Adviser, Governance, Gender Equality, Local Democracy

GAUDRON Marine In EU budget, EU budget, Governance, Governance, Impact community Cohesion, Impact community Cohesion, Local finances, Local finances, Press, Publications, Territorial development

COVID impact on local finances

A Europe-wide snapshot of the pandemic’s fiscal impact on municipalities and regions, and what support is still missing

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The COVID-19 pandemic placed local and regional governments at the frontline of public health response in Europe. While ensuring safety, maintaining essential services, and supporting vulnerable populations, these governments were simultaneously burdened with spiralling costs and plummeting revenues. A survey conducted by the Council of European Municipalities and Regions (CEMR) in May 2020 offers critical insight into the financial distress faced by cities and municipalities across 17 European countries.

The survey reveals a dual pressure on local and regional finances: soaring expenditures, primarily for personal protective equipment, sanitation, and social support and sharp declines in revenue due to reduced economic activity. Tax revenues, municipal service fees, and income from the cultural and tourism sectors were severely impacted. For example, Bulgaria saw a 41% decrease in municipal income from its own sources, and Austria faced estimated municipal revenue losses between €900 million and €2 billion.

While local authorities acted swiftly, organising food deliveries, providing accommodation for healthcare workers, and ensuring online education, support from national governments was slow and often insufficient. Although a few countries, like Estonia and Germany, implemented meaningful aid measures, most national support was delayed, limited, or only promised in future budget cycles.

Many governments, like in France and Sweden, pledged support, but uncertainty remains about the long-term sustainability of subnational budgets. Furthermore, the varied structure of local financing systems across Europe means that the financial impact differs widely between countries and even among municipalities within the same country.

The CEMR report makes it clear: without timely and adequate support from national and European levels, local and regional governments risk losing the capacity to invest in recovery and sustainable development. To prevent a prolonged post-pandemic investment slump, EU funds, especially from the Recovery and Resilience Facility, must be made directly accessible to local authorities.

Only by empowering municipalities can Europe hope to achieve its long-term goals for resilience, cohesion, and sustainability. Now is the time for stronger multilevel cooperation and for the EU to acknowledge the central role of local and regional governments in shaping recovery.

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Advisor – Territorial Cohesion & Local Finances

GAUDRON Marine In EU budget, EU budget, Impact community Cohesion, Impact community Cohesion, Local finances, Local finances, Press, Publications, Territorial development, Territorial development

Strong Budget, Strong Cohesion

CEMR urges EU leaders to secure an ambitious long-term budget that empowers local and regional governments

As EU leaders prepare to decide on the next Multiannual Financial Framework (MFF), the Council of European Municipalities and Regions (CEMR) calls for a robust budget and a cohesion policy that keeps local and regional governments at its core.

The need for an ambitious MFF

CEMR stresses that ambitious European goals, sustainable development, the Green Deal, and social inclusion, cannot be delivered without a strong budget. Any further cuts to cohesion policy, such as those recently proposed, would undermine Europe’s ability to meet its commitments. Local and regional governments, as the key actors implementing EU policies on the ground, rely on a timely agreement to ensure a smooth transition to the next funding period.

Just Transition and partnership

CEMR welcomes the creation of a Just Transition Fund to support regions in the shift towards a low-carbon economy. However, these new measures must come with additional funding, not at the expense of cohesion policy. Equally vital is the Partnership Principle, which guarantees that municipalities and regions are directly involved in programming and implementing EU funds. This principle must remain a cornerstone of cohesion policy.

Europe’s ambitions will only succeed if local and regional governments have the tools to deliver them. A strong MFF, safeguarded cohesion funding, and reinforced partnership are the foundations of a Europe closer to its citizens.

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Advisor – Territorial Cohesion & Local Finances

BORDELOT Federica In EU budget, EU budget, Governance, Governance, Local democracy, Local democracy, Press, Publications

Europe’s democratic future

The 2019 European elections highlight progress in participation, diversity, and gender balance, but also the need for stronger local involvement in shaping EU policies

The European elections of May 2019 marked a turning point for democracy in the European Union. With more than 400 million citizens called to vote, turnout reached 51%, the highest since 1979, signalling renewed interest in EU politics. Yet, the debate within the Council of European Municipalities and Regions (CEMR) underlined that more must be done to sustain citizen engagement and strengthen local governments’ role in shaping European policies.

The new European Parliament is more diverse than ever, reflecting a broader range of political views. This diversity will influence the Union’s legislative agenda and policy outcomes. Progress has also been made on gender equality, with women now making up 40% of Members of the European Parliament, up from 36% in the previous mandate.

Still, challenges remain. Increasing citizens’ interest in Europe requires targeted outreach, particularly towards young people, through communication channels they use and trust. Local and regional governments are key to bridging the gap between European institutions and citizens’ daily lives. Strengthening their role in the EU’s decision-making process is essential for the effective preparation, financing, and implementation of policies.

Looking ahead, the new Parliament is expected to continue work on the Multi-Annual Financial Framework (MFF) and embed the Sustainable Development Goals into EU legislation. A gender-balanced approach in filling top positions within both the Parliament and the European Commission is also vital to ensuring fair and inclusive representation.

The 2019 elections opened a new chapter for the European Union. Higher participation, improved gender balance, and a more diverse Parliament are encouraging signs, but further efforts are needed to build trust, foster inclusion, and give local governments a stronger voice. By working together, the EU and its citizens can ensure that Europe’s democratic future is both representative and resilient.

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BORDELOT Federica

Director – Policy & Impact

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

Protecting regional solidarity funds

CEMR warns against budget cuts and calls for strong, ambitious cohesion policy at the heart of Europe’s future

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At its Policy Committee meeting in Bilbao (11 June 2018), the Council of European Municipalities and Regions (CEMR) adopted a declaration on the European Commission’s proposal for the Multiannual Financial Framework (MFF). While the proposals maintain cohesion policy interventions in all European regions, CEMR highlights serious concerns about the reduced ambition and risks for Europe’s territories.

Risks of a reduced budget

The proposed 7% cut to cohesion policy represents more than a financial adjustment: it risks undermining the EU’s ability to deliver on key priorities such as climate action, social inclusion and economic development. CEMR stresses that cohesion policy is not just another programme, but an objective enshrined in the EU Treaties and central to the Union’s DNA.

Safeguarding cohesion and partnership

CEMR calls for cohesion policy to remain focused on territorial, economic and social cohesion, not diluted by unrelated measures such as public administration reforms. It also warns that new provisions risk weakening integrated territorial development by creating further divisions between funding streams such as the ERDF and ESF+. At the same time, local and regional governments must not be penalised for decisions taken at national or EU level within the European Semester.

A modernised but ambitious approach

CEMR welcomes efforts towards simplification, flexibility and sound financial management. However, the organisation insists that modernisation cannot come at the cost of ambition. Local and regional governments, the main investors in cohesion policy sectors, must be closely involved in shaping and implementing programmes through strong partnership agreements.

Looking ahead

As negotiations continue, CEMR urges that the future cohesion policy reflect the EU’s broader commitments, including the Sustainable Development Goals, climate action and the European Pillar of Social Rights. Europe’s capacity to meet these challenges depends on empowering its municipalities and regions, placing them at the heart of the European project.

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Advisor – Territorial Cohesion & Local Finances

BORDELOT Federica In EU budget, Impact community Society, Impact community Society, Migration and inclusion, Press, Publications

Funding migration integration

How EU funds can better support local and regional governments in managing migration and long-term inclusion

Migration continues to shape Europe’s future, bringing both challenges and opportunities. While national governments define migration policies, it is local and regional governments that carry the responsibility of welcoming newcomers, providing housing, schools, healthcare, and jobs. Yet, access to EU funds that support integration remains complex and often out of reach for municipalities that need it most.

Towards Smarter EU Funding

The post-2020 EU budget framework is an opportunity to rethink how migration funds are designed and accessed. Local governments call for:

More resources for integration: A larger share of the Asylum, Migration and Integration Fund (AMIF) should be earmarked for integration, rising from 20% to at least 30%.
Direct access to funding: Cities and regions should be able to apply directly to the EU for integration projects, especially when dealing with urgent pressures.
Simpler, fairer rules: Current procedures are often overly bureaucratic, leaving small and medium-sized municipalities excluded. Simplification and flexibility would allow more actors to take part.
Block grants and blending facilities: Innovative funding tools combining multiple EU resources (AMIF, ESF, ERDF) with loans or microfinance could deliver integrated, long-term solutions tailored to local realities.
Better coordination: Strengthening the partnership principle would ensure that municipalities are involved in programming, avoiding duplication and ensuring EU resources meet real needs on the ground.

From Emergency to Long-Term Strategy

Too often, EU migration funds are designed for short-term emergencies rather than sustainable integration. But integration is not a one-off response; it is a long-term process requiring education, job creation, social cohesion, and community investment. Aligning EU funds with local priorities and recognising integration as a shared responsibility will ensure better outcomes for both migrants and host communities.

Migration is a European challenge, but its solutions are local. By improving access to EU funds, simplifying procedures, and investing in long-term integration strategies, Europe can empower municipalities and regions to turn migration into a driver of social cohesion and sustainable development. The future EU budget must make this shift a reality.

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BORDELOT Federica

Director – Policy & Impact

BENNIS Hamza In Employment, Employment, EU budget, EU budget, Impact community Cohesion, Impact community Cohesion, Impact community Labour, Impact community Labour, Local finances, Local finances, Press, Publications, Territorial development

Regional actors in economic governance

CEMR–EPSU report maps current involvement of local and regional actors in EU economic governance

The European Semester, created in 2010 in response to the financial crisis, is the EU’s annual cycle for coordinating Member States’ economic, social, employment, and budgetary policies. Its aim is to align national reforms with shared EU objectives, including stability, sustainable growth, and the Europe 2020 strategy.

While central governments and EU institutions remain the main players, the process increasingly affects local and regional governments (LRGs) and their social partners. From public finance and taxation to health, social care and employment, many Semester reforms directly touch the responsibilities of municipalities and regions, as well as the working conditions of the sector’s employees.

The joint CEMR–EPSU project “Localising the European Semester” (2018–2020) set out to better understand and strengthen this involvement. The first deliverable, a background report published in February 2018, provided an overview of the Semester’s development, evidence of how LRGs and social partners are engaged, and identified important gaps in knowledge.

Key findings from the report include:

Limited evidence of structured involvement: While LRGs are often consulted through existing dialogue structures, their influence remains inconsistent across Member States. For social partners, involvement is even less systematic, with sectoral trade unions and employers’ organisations often sidelined in favour of peak-level organisations.
Impact remains unclear: Academic studies assess when countries follow Semester recommendations, for example, during election cycles, under market pressure, or when backed by EU enforcement. However, little research exists on whether reforms are more likely to succeed when LRGs and social partners contribute.
Need for deeper analysis: The extent to which local governments and sectoral social partners shape National Reform Programmes (NRPs) is largely undocumented. Equally, it remains uncertain whether peak organisations fully represent the concerns of the local government sector in national consultations.
Opportunities for good practice: Where involvement does occur, it is often tied to long-standing structures for social dialogue or intergovernmental coordination. The challenge is to turn sporadic consultation into regular, structured dialogue with clear impact.

The report concludes that strengthening the role of LRGs and their social partners in the Semester is both necessary and possible. By documenting experiences, identifying good practices, and pressing for meaningful engagement, the CEMR–EPSU project aims to ensure that the voices of local governments, employers and workers are better reflected in one of the EU’s most powerful policy coordination tools.