Is it up to cities to fight for the soul of Europe?

Local and regional governments may be invisible in the European Commission’s new EU Budget proposal, but they were anything but invisible in Brussels last week. They turned out in force for the European Week of Regions and Cities, followed by the largest EU Covenant of Mayors Ceremony in a decade.

For the first time ever, the event was opened by three Presidents of the European institutions: Roberta Metsola, President of the Parliament, Ursula von der Leyen, President of the Commission, and Kata Tüttő, President of the Committee of the Regions.

The scale of this year’s event was no coincidence. Europe’s mood is tense: uncertainty, polarisation, climate disasters, economic hardship, geopolitical strain – crisis seems constant. The EU feels it’s under threat. But so do cities and regions, who face these crises first-hand, every day.

When times are hard, the answer is to come together. To strengthen partnerships and form alliances. That was the clear message of the 2025 EU Covenant of Mayors Ceremony, and the reason it drew such high-level attention. Cities and towns are essential to Europe’s future, and the EU says it has their back.

At least, that’s what it says.

But its current policy direction — and its proposed long-term budget — tell another story.

Strengthening from the inside out

The Commission’s recent focus on crisis management and defence has led it to prioritise external security and rapid reaction, forgetting that real strength also needs to be built from the inside out. For Europe to survive, internal cohesion is as important as external defence. This was highlighted by Kata Tüttő, President of the European Committee of the Regions, in her State of Regions address, at the opening of EU Regions’ Week:

The world is more chaotic than ever in our lifetime. And most of Europe’s attention is drawn to the borders. But here we are, local leaders – councilors, mayors, Presidents of regions – and our duty is to focus our attention within. Because we are the ones who have to tend to the social, territorial and economic fabric of the Union. It is true that the Union has to be strengthened from the outside. But it also true that it has to stay strong from the inside. And this is our responsibility.

Kata Tüttő, President of the European Committee of the Regions

To become more agile in the face of crisis, the Commission has become laser focused on “simplification” and “flexibility”. And this focus has driven their new budget proposal unveiled in July 2025 – where they have equated simplification with centralisation.

Although everyone welcomes less red tape in the EU, they don’t all agree that a centralised budget is the answer. And last week in Brussels, local and regional leaders made it clear that this is not the way.

The European Committee of the Regions used the EU Regions Week to voice their concerns. The proposal would undermine the EU’s Cohesion Policy – the mechanism that weaves the very fabric uniting Europe by reducing regional inequalities and channelling investment directly to local efforts.

Instead, the Commission proposes “National Partnership Plans,” negotiated directly between Brussels and national governments. Territorial chapters would just be optional; genuine multilevel governance is nowhere to be seen. Worse, funding for local authorities is lumped together with funds for agriculture — forcing cities and farmers to compete for the same pot, when they should be partners.

The result? A disaster for cities and regions.

After years of pledging, planning, piloting, and pioneering Europe’s green transition, local governments now find the rug pulled from under them.

They’ve taken political commitments, engaged in EU Missions on climate change, started phasing out fossil fuels for a just transition, and are assigned the implementation of EU Green Deal policies like mandatory heating and cooling plans… All encouraged and driven by the Commission itself.

But now, to finish what they started, they’ll have to knock on the doors of their national governments (famously unresponsive) and fight their own farmers for EU funds (famously formidable opponents).

It’s no wonder they took to the streets of Brussels to make their voices heard last week.

The EU Parliament steps up

Thankfully, the European Parliament seems to be on their side. President Metsola underscored her support for local governments in her opening speech at the EU Covenant of Mayors Ceremony.

As we look ahead to the next MFF: first we will keep pushing for strong cohesion funding. Strengthening communities and creating sustainable opportunities. Your local and regional authorities drive half of Europe’s public investment. You are the backbone of policy legislation. We need to make sure that both the design and implementation of these programmes stay as close as possible as regional realities. Policies only work when they are designed for the people they are meant to serve.

Roberta Metsola, President of the European Parliament

The day before, the EU Covenant of Mayors Board had met with MEPs to share concerns, while the Urban Forum — gathering mayors and urban-minded MEPs — also sounded the alarm.

It seems the EU Parliament if gearing up to reject the EU budget proposal as a whole.

Fighting for Europe’s soul

Pascal Smet, former Minister and current Parliament Member of the Brussels Capital Region, warned during the Urban Forum that the Commission’s budget marks a shift towards “less Europe” at a moment when we need “more Europe”. It proposes a “Nations’ Europe”, he said, which risks unravelling what makes the very Union. For this reason, he believes that “this is a fight for the very soul of Europe”.

By centralising the budget, the EU seems to be forgetting its essence. Europe exists only when its people give it meaning – through shared futures, connections, and belonging, as Kata Tüttő signalled both in the State of Regions address and during the EU Covenant Ceremony. To her, “Europe needs the capacity to perceive meaning in the everyday”, which is made possible by local governments.

Europe’s meaning starts at the local level. Through the concrete actions making the places we live nicer, keeping them affordable, safe and dynamic. This is the EU’s vision, as President Von der Leyen made clear in her speech at the Covenant Ceremony.

But such a vision is only visible to Europeans when cities are in on it – and are given the means to bring it to reality.

If cities are deprived of its connection to Europe, so will be its citizens.

MEPs during the Urban Forum also pointed out that cohesion policy and the common market are two sides of the same coin. Undermining one weakens the other.

As Peter Dermol, the mayor of Velenje, a coal city in Slovenia, put it: “What am I to tell the thousands of miners who have lost their jobs if I can no longer continue the transition?”

If inequalities between European regions grow, its common future loses meaning. If Europe’s transition is undermined, backlash is inevitable. The distance between the EU and its citizens will only expand. And so will resistance towards the EU.

Europe may be strengthening its borders, but without a real partnership with its cities, it risks damaging itself from within.

Democracy at stake

And this is why, for many mayors, it isn’t just about funding – it’s about democracy. Defending connection and trust over fragmentation and conflict.

Mayors are seeing how fragile democratic systems can be. What’s happening across the Atlantic is enough to deeply trouble any mayor – but so are stories closer to home. Hungary’s experience shows what happens when national governments grow authoritarian, and how cities like Budapest always get the short end of the stick.

Hostile national governments are already weaponising public funds to punish cities and regions they don’t agree with. Further nationalisation of funds will only make things worse.

Energy Cities’ Board also met last week with the EU Commissioner for Democracy’s cabinet to stress that local governance is democracy in action. The Commission’s “democracy shield” initiative is a welcome step, but this shield should be built from the ground-up. And must connect the dots, recognising that all these questions are interconnected: energy, affordability, security, democracy…  

The EU must recognise that well-resourced local governments are the basis of a strong democracy. One that can listen to its residents, engage them in building their future, transform places to fit their needs, and strengthen trust by improving people’s lives – one neighbourhood at a time.  

A democratic Europe starts by giving cities the capacities to keep carrying the future they are already building. But they need a guaranteed place in the Multiannual Financial Framework if they are to keep going.

The negotiation battle over the next MFF ahead is going to be long and strained. And if we saw anything last week, it’s that mayors won’t stand by and watch Europe self-sabotage.

Because in trying times like these, the EU and local levels need to stand together. The EU may not see it yet. But the local level knows it.

Curious to know more about the MFF, what it means for cities, and how you can get involved to change things? Check out our latest Q&A covering all cities need to know about it and join Energy Cities’ members-only webinar to exchange with us on the topic.