European cities, the frontier of cohesion

How to ensure that cities are places of rights and quality of life and not of division and marginalisation? European institutions, through cohesion policy, are trying to find solutions

In recent decades, urban areas have undergone a number of profound transformations. More and more young people are moving to the city in search of a better perspective of life and work, abandoning small villages and rural areas. Today there are about 359 million Europeans who live in the urban centres of the 27 member countries, a trend that is expected to grow by 2050, with the risk of causing uncontrolled and unsustainable urban expansion. Meanwhile, peripheral urban and suburban areas are turning into border lines, increasingly left to themselves, with areas marked by degradation, abandoned infrastructures, fragmentation of social relations, and a growing gap between citizens.

Faced with today's many challenges, such as demographic ageing, unemployment, social exclusion, etc., local administrations are no longer able to meet the needs of the territory, to ease the pressure and offer adequate public services. The situation is further aggravated by the ever-increasing level of pollution and climate change.

This picture is common to many European cities today and action is urgently needed at the Community level to reverse the decline, make cities more habitable, and promote sustainable territorial development and social cohesion.

Urban development, the prerogative of the member states but…

Urban development policy remains an exclusive prerogative of individual member states of the Union. Any potential intervention by the EU institutions on the matter must first be coordinated with the states, and not many are interested in supporting EU intervention. France and Poland stand out among those who argue that more space should be given to EU institutions, followed by the Czech Republic and Germany. However, over the past three decades, European interest in urban issues has consolidated. The Commission has carried out various interventions aimed at contrasting the problems shared in the European area, respecting the differences and the different realities of the urban areas of the member countries.

The main instrument that made direct European intervention at the urban level possible was cohesion policy. Based on the primary objective of pursuing economic, social, and territorial cohesion, the Commission was able to finance various urban regeneration actions in disadvantaged areas and/or revitalisation of existing infrastructures, giving citizens back new spaces for aggregation and socialisation. This was made possible in particular thanks to the European Regional Development Fund (ERDF), which has a dual value: on the one hand, emphasis is placed on the concept of territorial cohesion, to promote balanced and harmonious territorial development in the European area. On the other hand, financial contributions are provided for the implementation of interventions of an experimental nature in the urban areas of the member countries.

Over time, ERDF funds have become fertile ground for sustainable urban development, indirectly reinforcing the urban dimension of cohesion policy. During the 2014-2020 financial period, the regulation of the structural funds provided that a minimum of 5% of the ERDF funds allocated to each EU member country should be invested in integrated initiatives that target specific local needs and promote the sustainable urban development. The provision of dedicated European funds has provided urban authorities at the local level with a new horizon of breadth, thus allowing the implementation of wide-ranging interventions, sometimes even going beyond the rigid administrative boundaries to adequately address local problems.

The results of these loans are now being reaped. Focusing on the Balkan countries, we note at first glance a heterogeneous situation in terms of urban policy at the national level. For example, Bulgaria and Greece do not officially have an urban policy. However, the aforementioned interventions are in any case carried out through various internal legislative instruments.

In 2014-2020, Bulgaria allocated around 715 million Euros, i.e. 20% of its budget from ERDF funds, to sustainable urban development, far exceeding the 5% threshold. In neighbouring Romania, sustainable urban development was the third national intervention objective, obtaining about 10% of the ERDF funds allocated to the country for the same financial period. These funds make up the main financial instrument of intervention for the urban development of Romania, mainly focusing on the development of infrastructures, the revitalisation of urban areas, and the creation of green spaces for the benefit of the citizens.

A tool for shared challenges

Over the past seven years, in addition to the ERDF funds, the Commission made additional resources available to urban authorities through the Urban Innovative Actions (UIA) initiative. Cities with more than 50,000 inhabitants had the opportunity to compete for funding of up to 5 million Euros to test locally new solutions that address issues related to sustainable urban development and that have relevance at the community level. The total value made available was equal to 372 million and approximately 90 projects presented directly by the urban authorities were financed.

Given the satisfactory results, UIA is currently being transformed into a permanent instrument called the European Urban Initiative, under whose scope all European cities fall without size constraints, thus aiming at the development of new capacities and innovative solutions to the challenges urban areas of community importance. The funds made available are currently 450 million to be distributed by 2027.

Given the current times and the multiplication of transnational challenges, ranging from the increase in inequality to environmental degradation and digitalisation, it was also decided to raise the bar of European funds destined for the sustainable urban development sector, moving from 5 to 8% of the ERDF funds due to each member country. However, how these funds will be distributed locally remains to be seen, as the responsibility for their allocation still rests with national governments.