Towards a new European urban paradigm

The Cities Forum 2025, held in Kraków (Poland) this past June, reaffirmed the central role that cities play in the green transition, territorial cohesion and social innovation in Europe. This event served as a platform to highlight both the progress made and the ongoing challenges facing European urban policies. While promising initiatives were announced, such as the strengthening of the European Urban Initiative (EUI) and the creation of the Urban Seal of Excellence, the need to address certain shortcomings was also made evident to unlock the cities’ true transformative potential.

For European cities to thrive and lead the way towards a more sustainable and equitable future, it is imperative to tackle a series of structural challenges that limit their autonomy and the effectiveness of the policies that affect them. These issues, systemic in nature, require equally structured responses. The European Commission and its Member States have developed an increasingly broad toolkit of instruments, but their effectiveness depends on integration, on local capacity to implement them, and on genuine multilevel governance.

Accessible and flexible financing for cities

One of the most evident shortcomings of the current European funding model is the difficulty many cities — particularly medium-sized and smaller ones — face in accessing structural funds. Bureaucracy, lack of technical capacity, and budget thresholds often exclude high-quality projects from funding, despite their transformative potential.

The Urban Seal of Excellence, proposed during the Forum, represents an attempt to correct this inefficiency: a mechanism to formally recognise outstanding unfunded urban projects, enabling them to seek support from other programmes such as Urbact, Interreg or national instruments. Additionally, the possibility was raised for cities to become active entities themselves or for 15% of the Cohesion Fund budget to be allocated to urban development.

In this context, it is crucial that cities are aware of and take advantage of new funding opportunities already underway. Among them are the Strand 1 and 2a Investment calls, open until 13 November 2025, supporting interregional projects in the green and digital transitions and smart manufacturing (technological readiness level 6–9). Also noteworthy is the upcoming Strand 2b Capacity Building call, scheduled for October, which will strengthen innovation ecosystems in less developed regions. Another relevant call for cities is the New European Bauhaus, which seeks to promote community environments where sustainability, cohesion and design are fully integrated.

In the framework of the Horizon Europe programme, the Innovation Actions for climate neutrality and smart city development are also particularly significant. One of the key calls makes a total of €12 million available for projects under the EU Missions on climate-neutral and smart cities and cancer. Another initiative allocates an additional €41 million to proposals specifically aligned with the Mission for Climate-Neutral and Smart Cities. Both calls close on 4 September.

Also notable is a call aimed at driving the transformation towards climate-neutral cities through pre-commercial public procurement, with the deadline for proposals set for 20 January 2026.

However, none of these opportunities can fully deliver on their potential unless governance structures are strengthened to allow cities to decide, coordinate and act with autonomy and strategic vision.

Weak and fragmented urban governance

The lack of a solid multilevel urban governance structure remains a major obstacle. Cities have a strategic role, yet their influence over European financial and legislative planning is still limited. During the Cities Forum, the possibility of making an urban chapter mandatory in Member States’ Partnership Agreements was raised, as well as some speakers’ proposal to earmark at least 15% of ERDF funds for urban interventions. This would help embed the urban dimension in the EU’s financial architecture, rather than treating it as a voluntary add-on.

This approach must be accompanied by a truly cross-cutting European Urban Agenda, which is not merely a collection of thematic partnerships but a coherent roadmap that integrates housing, sustainable mobility, clean energy, and climate action under a single operational framework.

Urban territories at different speeds

Unequal access to resources and innovation is another underlying tension. While some cities can pilot advanced solutions thanks to European networks and direct funding, many others are falling behind. Programmes such as Urbact, DUT, Interreg, and City-to-City Exchanges from the EUI aim to close this gap through peer learning and networking.

However, their impact remains limited unless accompanied by a genuine systematisation of knowledge and its operational scalability. The Portico Knowledge Hub, introduced as a platform to centralise tools, case studies, and training, is a step in the right direction.

Housing emergency

Access to affordable and decent housing remains one of the most serious structural crises in European cities. Real estate speculation, touristification, and demographic pressure are exacerbating an already precarious situation for millions of citizens. During the Forum, a pan-European investment platform for affordable and sustainable housing, promoted by the European Commission and the European Investment Bank (EIB), was presented as a structural response.

This initiative may complement national and local efforts, but it also highlights a paradox: housing is a fundamental right recognised by the EU, yet there is no binding common urban policy to guarantee it. It is urgent to move from recommendations to obligations and to make housing a priority focus of the next European Urban Agenda.

Cities facing the climate emergency

Cities are on the front line of climate change, both as emitters of CO₂ and as recipients of its impacts. The EU Mission for Climate-Neutral Cities represents a strong commitment to local action, but it also reveals the uneven level of preparedness among European cities. Some are progressing rapidly, while others lack technical and financial resources.

The challenge is twofold: accelerating the transition without deepening territorial inequalities, and ensuring that this transformation is just, participatory, and systemic. This requires the integration of housing, mobility, and energy policies under a common framework, something that will only be possible through instruments that promote integrated, not fragmented, planning.

Towards real integration of urban sectoral policies

One of the most persistent limitations of urban action is its sectoral and uncoordinated approach. Policies on mobility, energy, housing, or employment are often developed in isolated silos, preventing effective responses to complex problems. Instruments such as the EUI, Urbact, or Interreg pilot actions already enable integrated approaches, but a deeper cultural and political shift is needed.

One solution could be to require that every EU-funded project in urban settings include a cross-sectoral impact assessment, encouraging interdepartmental collaboration and systemic thinking from the design phase onward. It is also essential to simplify existing financing mechanisms, as reducing administrative burdens is key for cities to access and combine the various available funds.

The urban future of Europe depends on its ability to overcome fragmentation and embrace structural integration. Isolated projects and good intentions are no longer enough. It is time to consolidate a true European ecosystem for urban transformation, in which cities are not just beneficiaries but co-creators of the European development model to come.