The most direct contact many European citizens have with the EU is through infrastructure financed with regional development funds that come from the bloc’s central budget ― think roads, metro stations and municipal football fields.

However, according to the bloc’s mayors and regional leaders, the European Commission’s new budget proposal for the seven-year period from 2028 to 2035 is set to make accessing those funds much more difficult. Furthermore, it risks cutting off a direct link to Brussels.

Announced on Wednesday, the proposal not only reduces the cash earmarked for regional development, but also leaves the power to allocate and distribute it in the hands of national governments. Cities and regions, meanwhile, would be left with no guarantee that vital money needed for climate adaptation, sustainable mobility or economic development will ever reach them.

Gdańsk Mayor Aleksandra Dulkiewicz said the proposal undermines “Europe’s main tool for territorial and social cohesion,” and it “risks widening inequalities and missing its climate and digital goals.”

By weakening that “direct connection between investment and citizens’ everyday lives,” she added, the Commission is in danger of undermining the only physical proof most Europeans have that the EU is more than just distant bureaucrats in far-off Brussels.

Problematic proposal

The contentious €1.816 trillion budget proposal aims to fulfill Commission President Ursula von der Leyen’s campaign promise of rationalizing how the bloc’s funds are managed and distributed. With funds spread across a vast variety of programs that can often have overlapping priorities, Budget Commissioner Piotr Serafin described the current process of accessing EU money as “a bureaucratic nightmare.”

In a bid to tackle this problem, the 2028 budget proposal does away with standalone cash pots for signature EU schemes like the Cohesion Policy, which has been used to finance regional and urban development across Europe for decades.

Money for these expenditures will now be merged with the cash meant for other major programs, like the Common Agricultural Policy, and allocated through National and Regional Partnership Plans.

Local and regional leaders are alarmed by the change, as it would substantially reduce regional development funding, which makes up more than one-third of the current budget.

The Local Alliance — a group of the eight leading networks of European local and regional governments — also pointed out that the proposal only guarantees cohesion funding for the bloc’s poorest regions and doesn’t earmark cash for others, or for the cities where nearly three-quarters of Europe’s inhabitants live.

“The proposal fails to give cities guarantees that they will receive the effective support they need to deliver a just, sustainable and prosperous future for the people of Europe,” said Tallinn Mayor Jevgeni Ossinovski.

Local leaders are additionally incensed by the Commission’s apparent move to give the EU’s 27 national governments absolute power over shaping and administering the so-called Partnership Plans.

Pascal Smet, a member of the Committee of the Regions’ (COR) Cohesion and Budget Committee, angrily described the proposal as promising “flexibility and simplification,” while actually being a “triple layer of centralization.”

“The proposed structure leaves a lot of uncertainty about the role of local and regional governments and the lack of safeguards for cities to actually be able to co-design and implement these plans,” said Louise Coffineau, policy director at Eurocities, a network of over 200 European cities.

COR President and former deputy mayor of Budapest, Kata Tüttő, put the matter more bluntly, accusing the Commission of using “simplification smoke” while “a MONSTER plan emerges to swallow cohesion policy and crack its backbone.”

However, Regions and Cohesion Commissioner Raffaele Fitto attempted to defend the proposal during a hearing in the European Parliament on Thursday, leading lawmakers to accuse him of “selling off” Europe’s regions. “I think [cohesion policy] is not dead, we’re in a different phase,” he said, highlighting the €218 billion committed to development in the bloc’s poorest regions.

Hinting at his own dissatisfaction with the proposal, Fitto added he was hopeful the Parliament and the European Council would “further improve the text” in the negotiations to be held over the next two years.

Safeguard concerns

For local leaders, there’s also the additional worry over the Commission’s plan to link national governments’ ability to access EU cash with their implementation of major reforms or their adherence to the rule of law.

In the past, cohesion funds still flowed to cities and regions in countries with central governments that clashed with Brussels. But under the new terms, problems that national administrations have with the Commission could stymie cities’ ability to secure EU money for building tram lines or sustainable housing.

In Poland, where the central government’s access to EU cash was temporarily blocked due to concerns over the independence of the judiciary, Wrocław’s Deputy Mayor Jakub Mazur expressed deep concerns over tying access to funds with national leaders.

“When national governments fail to meet horizontal conditionalities such as the Rule of Law,” he argued, “local efforts might be put at risk by political changes at the national level, despite cities’ commitment to delivering on EU priorities.”

There are even greater worries about national governments possibly abusing their power to shape and administer the National and Regional Partnership Plans, as there are no apparent safeguards in place to stop them from refusing to allocate or distribute cash to cities and regions governed by political rivals.

The scenario is not far-fetched: In Hungary, Budapest’s Mayor Gergely Karácsony has accused Prime Minister Viktor Orbán of blocking the city’s access to EU funds because the capital’s progressive administration isn’t politically aligned with the right-wing national government.

“By recentralizing the budget, you risk having cities cut off in this manner,” said Eurocities’ Coffineau, pointing out that clashes between national governments led by far-right or populist parties and traditionally progressive cities were now likely to increase.

“Cities implement 75 percent of the EU’s policy objectives,” she stressed. “By sidelining them, you risk the implementation of the bloc’s key policies and hinder the EU’s potential for success.”