EU Budget proposals risk cutting out cities and regions: FEDARENE and the Local Alliance react to the 2028-2034 EU long-term budget

On 16 July 2025, the European Commission released its proposal for the 2028–2034 EU long-term budget, also known as the Multiannual Financial Framework (MFF), which outlines the European Union’s priorities and funding over a seven-year period. The proposed budget is the largest in EU history, amounting to just under 2 trillion euros when adjusted for inflation. It aims to simplify the EU’s budgetary framework and sets out funding and instruments to address the main challenges; notably linked to competitiveness identified in the Draghi report.

FEDARENE President Julije Domac had a few words to comment on the newly published MFF:

The times call for a strong European Union capable of rising to the global challenges our continent faces. This requires a budget that supports our ambitions for a competitive and decarbonised EU. Make no mistake, embracing decarbonisation as a driver for competitiveness requires all the expertise our continent can muster. This will only be achieved by mobilising local and regional energy agencies through forward-looking partnerships. A more resilient, prepared and sustainable EU is possible, as long as the right actors implement it. These local and regional experts must be involved in the governance of the new European Competitive Fund to lay the ground for its implementation and secure the competitiveness and resilience of our territories.

FEDARENE, alongside partner organisations from the Local Alliance, representing local and regional authorities from across the EU, published a press release in reaction to the MFF proposal.

Press Release: EU Budget proposals risk cutting out cities and regions

Brussels, 17 July 2025

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, 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 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.

The members of the Local Alliance are: Association of Cities and Regions for sustainable Resource management (ACR+); The Council of European Municipalities and Regions (CEMR); Climate Alliance; Energy Cities; Eurocities; FEDARENE; ICLEI – Local Governments for Sustainability; POLIS. 

FEDARENE will continue to advocate for better recognition of the contribution and added value of energy agencies, greater inclusivity of local stakeholders in the design, management, and implementation of EU funding, and improved access to financial resources. This will take the shape of policy briefs, member consultations, calls for action, events and more.