Future EU budget: regions and cities warn that centralisation risks weakening Europe’s competitiveness and cohesion

"Regions and cities are the engine of our capacity to compete and prepare for the future” said President Tüttő in State of the Regions and Cities address.

Ahead of a crucial meeting of EU heads of state and government, local and regional leaders warned that the Union’s next long-term budget risks concentrating decisions at national governments’ level and opportunities in the strongest areas, deepening territorial disparities and weakening Europe’s ability to mobilise the economic potential of all its regions.

During the opening session of the 2026 European Week of Regions and Cities, Kata Tüttő, President of the European Committee of the Regions (CoR), delivered her State of the Regions and Cities address. She spoke in the presence of António Costa, European Council President, European Commission Executive Vice-President Raffaele Fitto, and hundreds of local and regional leaders from across the Union.

The EU Annual Report on the State of Regions and Cities, published today by the CoR, paints a worrying picture of the current and future challenges that Europe’s territories are facing: one in two regions has experienced an increase in poverty and social exclusion, while more than half of regions have seen labour-market conditions deteriorate. Declining production and high energy costs are weakening regional competitiveness, and European territories are increasingly vulnerable to natural disasters and affected unevenly by them: wildfires have risen by 57% over the past four years, and the annual cost of drought is estimated at €9 billion.

Demographic change is also deepening territorial inequalities across the EU: nearly three-quarters of regions, particularly rural areas, are expected to lose population by 2050, while most urban areas face mounting pressure on housing and infrastructure.

During the debate that followed the President's speech, local and regional leaders underlined that Europe’s competitiveness depends on firms, workers, infrastructure and innovation ecosystems across all its regions. A strong, well-funded and decentralised Cohesion Policy connects these capabilities to the single market and helps regions manage industrial, demographic and climate transitions. Yet the proposed 2028-2034 EU budget risks concentrating decisions on territorial investment at national level, weakening predictable funding and sidelining local and regional knowledge. “If Europe wants to be stronger on the global stage, it must also become stronger from within. Its budget must connect Europe’s strengths and help more places develop their potential,” said CoR President Tüttő.

Quotes

Kata Tüttő, President of the European Committee of the Regions: "Europe’s promise is shared prosperity. We cannot fulfil it by assuming that growth generated in a few places will eventually reach everyone. Cohesion and competitiveness belong together: connecting innovation with businesses, workers and communities across Europe. Regions and cities bring knowledge, investment capacity and public trust. The next EU budget must give them the means to act-and give people a real choice to build their future where they feel at home."

Juanma Moreno, first Vice-President of the European Committee of the Regions: “We maintain that priority policies such as agriculture, fisheries, security, and migration cannot be forced to compete against one another within national budgets; simplification must not become a pretext for recentralisation. The debate is not merely about the size of the budget. The real question is what kind of Europe we want to build. In that context, defending the role of regions and cities is not simply an institutional matter. It is a profoundly democratic one. When Europe loses its presence on the ground, citizens cease to perceive the European project in their daily lives, leading to growing disengagement, particularly among younger generations. This detachment fuels frustration, polarisation, and extremism that challenge the very foundations of European integration. There is still time to act. Let us make our voices heard and work together to influence the negotiations before they enter their decisive phase.”

More information

• Photos and videos of the opening session of the European Week of Regions and Cities, the biggest annual event dedicated to Cohesion Policy and EU territories. The event runs from 12 to 14 October and is co-organised by the CoR and European Commission's Directorate-General for Regional and Urban Policy (DG REGIO). Official programme.

• More material on the EU Annual Report on the State of Regions and Cities, including factsheets and the entire document.

• To explain clearly and accessibly what regions and cities expect from the next EU budget, drawing on adopted opinions and related documents, the Committee has launched the AI-powered 'Ask Jacques' platform. Try it and ask your question!

Contact

Matteo Miglietta
Tel. +32 470895382
matteo.miglietta@cor.europa.eu