This study, commissioned by the European Committee of the Regions, outlines the current challenges facing local and regional authorities and present some scenarios and policy options for re-structuring a multiannual financial framework that can help addressing social, economic and environmental issues at city and regional level.

1) The EU needs to continue promoting endogenous growth in its territories via a modern cohesion policy, and not simply hope for some solution when the socio-economic tensions due to rising disparities become untenable. ICT advances create new forms of collaboration and the EU should experiment with them, given its social, political and territorial realities.

2) To have the best financial instruments with best risk-bearing facility, it is better to have one European-wide fund for different investments, rather than small financial instruments that uses small amounts from the structural funds allocated to regions as guarantees. Managing authorities should be able to create financial instruments from the large EU funds (a modified and expanded EFSI) with off-the-shelf solutions.d)

3) EFSI should have a ‘development window’, a guarantee structure designed for regions bearing higher risks.

4) Support for integrated programmes in cities should be expanded, which is one of the reasons for the need to simplify procedures and make combining funds easier.