COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 06.05.1997 
COM(97) 197 final 
COMMUNICATION FROM THE COMMISSION 
Towards an urban agenda 
in the European Union 

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TABLE OF CONTENTS 
INTRODUCTION 
1. CHALLENGES FACING EUROPE'S CITIES 3 
1.1 Cities in a changing context 4 
1.2 Cities, unemployment and social exclusion 5 
1.3 Imbalances in the European urban system 6 
1.4 Urban Environment 6 
1.5 Fragmentation of power and integration of urban society 7 
2. CURRENT ACTIONS AT EU LEVEL RELATED TO URBAN DEVELOPMENT 8 
2.1 Promoting competitiveness and employment 8 
2.2 Policy in favour of economic and social cohesion 9 
2.3 Transport and transEuropean Networks 11 
2.4 Promoting sustainable development and the quality of life in cities 12 
3. DIRECTIONS FOR THE FUTURE 13 
3.1 The need for an urban perspective in European Union policies 14 
3.2 Services of public interest and urban development 15 
3.3 Contribution of the Structural Funds 16 
3.4 Raising knowledge and promoting exchange of experience between cities 16 
4. FOLLOW UP OF THE COMMUNICATION 17 
ANNEXES 
Annex 1 Socio-economic data on urban deprivation 
Annex 2 Local expenditures in the EU Member States 
Annex 3 Impact of the structural funds on cities 
Annex 4 Some relevant forthcoming events 
INTRODUCTION 
Europe's towns and cities remain its primary source of wealth creation and the centre of its 
social and cultural development. However, there are rising problems relating to rapid 
economic adjustments, unemployment, environmental conditions and traffic congestion but 
also poverty, poor housing, crime and drug abuse. 
Policy efforts in Europe already address many of the problems affecting European cities; but 
these efforts have often been piecemeal, reactive and lacking in vision. It is clear that new 
efforts are necessary to strengthen or restore the role of Europe's cities as places of social and 
cultural integration, as sources of economic prosperity and sustainable development, and as 
the bases of democracy. 
At the European level, the European Parliament and the Committee of Regions have 
supported a more active intervention from the Union in urban development, and the Member 
States and the European Commission acknowledged their common concern about the future 
sustainable development of cities at the recent UN Conference on Sustainable Urban 
Development (Habitat II). 
This Communication examines possibilities for improving urban development and for 
increasing the effectiveness of existing Community intervention in urban areas. The intention 
is not to develop Europe wide urban policies for matters which are best dealt with at a local or 
regional scale. However, since it is clear that cities in the European Union are facing a number 
of common problems, there are also opportunities at the European scale to share and facilitate 
potential solutions. This would not require additional powers at the European level. Rather, 
much can be achieved through a more focused approach using existing instruments at national 
and Community level and enhanced co-operation and co-ordination at all levels. 
There are two further elements which should be taken into account when discussing urban 
issues at EU level. First, the challenges related to urban development provide an opportunity 
for the EU to become a more meaningful body for its citizens by bringing tangible benefits to 
daily lives. It also requires a more explicit recognition of the importance of local democracies, 
the level of political authority closest to the citizen. Second, cities play a crucial role in 
underpinning a European model of society, based on equal opportunities regardless of gender 
and ethnic origin. Whilst urban authorities cannot be the sole agencies to act on these large 
issues, they should be fully involved in the policies related to these matters, as there can be no 
effective solutions on the ground without their active participation. 
This Communication is structured into four parts. The first part sets out the key challenges 
which affect all cities to a greater or lesser degree. The second part takes stock of existing 
EU policies which have an impact, directly or indirectly, on cities. The third part proposes 
some directions for future actions and the approach which urban policy in Europe could 
take as a starting point for debate. Finally, fourth part proposes a follow-up of this 
communication, in particular the organisation of an Urban Forum in 1998. 
1. CHALLENGES FACING EUROPE'S CITIES 
Some 80% of the European population lives in towns or cities, making Europe the most 
urbanised continent in the world. Although there is a great variety in European urban areas, 
they face common features which are briefly summarised in this first section. 
1.1 Cities in a changing context 
Around 20% of Europeans live in larger conurbations of more then 250,000 inhabitants, a 
further 20% in medium sized cities and 40% in towns of 10-50,000 inhabitants. London and 
Paris are the only two European agglomerations with approximately 10 million inhabitants. 
Demographic data confirm that the urbanisation of European society is continuing, although 
at a slower rate than in previous decades. 
The population growth of cities is a result of natural growth rates, inflows from rural or less 
prosperous areas and from migration especially from third countries. At the international 
level, the EU has been an important destination for immigrants and this has helped to offset 
the trend of population decline. In 1990 for instance, an estimated 2,1 million persons 
entered into the Member States from abroad, while almost 1 million people left the EU. 
Apart from Ireland, all Member States nowadays are experiencing net immigration. 
Estimates for the period 1987-1991 suggest that two thirds of immigrants have moved into 
large industrial agglomerations and capital cities. 
Other cities, however, have experienced declining population during the 1980s. The 
disappearance or relocation of traditional employers and suburbanisation are the main 
causes for this decline. Brussels, London, Paris, Lille, Porto, Hannover, Torino, Barcelona, 
and the Randstad cities in the Netherlands are all examples where the centres of the city 
have lost population compared to their periphery. This dispersal of home, work and leisure 
facilities entails, inter alia, an increasing need to travel. 
In terms of economic performance, larger cities remain the main source of prosperity, and 
they contribute disproportionately more to regional or national GDP compared to their 
population, reflecting the higher productivity of cities. However, GDP growth has often 
been of a 'jobless' nature. For instance, the urban regions of Brussels, Rhine Ruhr and 
London had annual GDP growth figures of 5% to 6%, while annual employment creation 
over the same period was +0,2 (Brussels), +0,1 (Rhine-Ruhr), and -0,2 (London). Similarly, 
some medium-sized cities, such as Parma, Rennes, Cambridge, Braga and Volos, have 
continued to grow on the basis of economic success. 
In most cities, total employment increased during the period since the mid-1980s due to the 
significant expansion of the service sector, which represents today some 60% to 80% of all 
jobs in cities and which in most cases compensated for the loss of industrial employment. 
Roughly one third of service jobs is situated in the non-market sector of services, which 
includes public administration, education, health, community and social services, as seen 
for example in cities such as Brussels, Rome, Helsinki, Stockholm and Copenhagen. In 
many cities, however, the growth of non-market services is limited by constraints on public 
expenditure. As far as the other 2/3 of service jobs are concerned, they are mainly in 
financial services, insurance, transport and communications, retail trade, and hotels and 
restaurants. 
The cities which have had the greatest difficulty adjusting to changing circumstances are 
those formerly dependent on resource based industries or situated in regional economies 
which depend on a traditional agricultural sector. Cities in the east of Germany have 
specific difficulties, especially as they are undergoing the rapid restructuring which lasted 
for decades in other EU cities. 
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It is clear that the future development of cities will be structured by different elements than 
in the past. An increased importance will be gained by service activities, such as 
telecommunications and transport, biotechnology, high-tech business, international trade 
and retailing, and by the development of the information society1 as well as education and 
research. Also, the environment and broader quality of life conditions are becoming 
increasingly important factors which influence the location of new activities. Cities 
therefore face the challenge of adapting themselves continuously to rapid changes in 
economic sectors and in other fields. This new mode of development implies the risk of a 
further dualisation of urban societies, and raises the challenge for retraining the labour force 
on a continuous basis. 
1.2 Cities, unemployment and social exclusion 
While problems of data availability are considerable, estimates tend to confirm that urban 
unemployment is above the EU average. The densely populated zones of the EU had an 
unemployment rate of 11,9% in 1995, compared to 10,8% for the rural areas, and 9,0% for 
the areas which have semi-urbanised characteristics, and which are often situated close to 
highly urbanised centres2. The EU average in 1994 amounted to 10,8%. The average 
numbers hide different realities. Some cities have relatively low unemployment rates (e.g. 
Milan, Frankfurt), while others exceed the national and European averages by at least a fifth 
(e.g. Brussels, Birmingham, Kôln, Copenhagen, Naples, Palermo, etc.). 
The present development of new economic opportunities in many cities is widening social 
and economic disparities. While the better qualified part of the labour force is able to 
compete in an open economy, a more vulnerable group has emerged which lives in 
permanent or semi-permanent exclusion. Educational attainment and access to the labour 
market have become major factors dividing the urban population. Important in this respect 
is that half of the EU unemployed are long term unemployed, whereas in densely populated 
areas, long-term unemployment amounts to 56,1% of total unemployment. In cities, 
multiple deprivation is expressed in rising poverty and homelessness, by social isolation, 
bad housing conditions, drug abuse, and criminal behaviour. 
In many European cities, exclusion has led to the spatial segregation of social groups in 
neighbourhoods with poor facilities. This pattern has long been present in Northern 
European cities, and it is growing as well in cities of Southern Europe. Some urban 
neighbourhoods within bigger cities have unemployment rates above 30% (see annex I), 
and very low educational attainment rates. Also, social exclusion in many cities overlaps 
with the cultural and linguistic diversity of many neighbourhoods, where the educational 
system faces specific demands. It is by now increasingly recognised that spatial segregation 
is not only a social problem in terms of employment, education and low quality of housing, 
but that the socially deviant behaviour which results from segregation harms the general 
economic attractiveness of the city. 
See also COM(96)607 of 27.11.96: 'Europe at the forefront of the Global Information Society: Rolling 
Action Plan'. 
2 Data from the Labour Force Survey for 11 KU countries (not for Luxembourg, Austria, Sweden, 
Finland). Densely populated zones have more than 500 inhabitants per km2, and cover 50% of the LU 
population. Rural areas have less than 100 inhabitants per km2, and cover 22% of the population. 28% of 
the population lives in intermediate zones, which have between 100 and 500 inhabitants per km2. 
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1.3 Imbalances in the European urban system 
Globalisation and the shift from industries to services have not diminished the importance 
of space for economic development. In particular, metropolitan areas located at strategic 
and well equipped nodal points are likely to gain considerable influence at the expense of 
more peripheral and less well equipped towns and cities. The dominance of such areas can 
especially be seen in transport connections. In 1993, the London-Paris airline link carried 
twice as many passengers as any other route in Europe. Crucial for the spatial balance of 
urban development is the equipment of cities with services which allows them to attract 
modern market activities. Peripheral gateway cities such as Athens, Valencia, Palermo, 
Thessaloniki, Belfast, Lisbon and Seville, and industrial cities such as Turin, Glasgow, and 
Bilbao, face disadvantages in this respect compared to central gateway cities such as 
Antwerp, Bremen, Rotterdam, and cities such as Hannover, Lyon, and Vienna, which all 
have a more diversified range of activities and good accessibility. 
The medium cities which are well connected to highly performant economies have also an 
obvious advantage compared to others. Medium cities in the core of the Union's territory 
are expected to profit more from the benefits of European integration than cities in the 
periphery. 
1.4 Urban Environment 
People in urban areas are more and more concerned about the quality of their natural and 
physical environment. Despite considerable efforts, many problems remain. A 1995 survey 
by the European Environment Agency showed that 70 to 80% of European cities with more 
than 500,000 inhabitants do not meet the World Health Organisation's quality standards for 
air. Also, the concentration of 'winter smog' affects around 70 million EU citizens in cities. 
In Milan, Turin, Stuttgart, Belfast, Dublin and Berlin, for instance, 'winter smog' indicators 
are sometimes twice above the quality standard ceiling. Finally, ozone concentrations affect 
around 80% of the EU population at least once a year. 
Besides industry and domestic heating, urban transport is a major source of pollution. The 
use of the private car has grown more rapidly than any other transport means, and is 
predicted to rise further in the near future. The rising concentration of cars in the city 
diminishes the positive effects on the environment which results from cleaner car 
technologies. The urban environment also faces other serious problems such as the 
treatment of solid waste and of urban wastewater. 
Apart from its negative effect on the quality of the urban environment, including noise 
pollution, traffic congestion reduces the mobility in and accessibility of cities, and increases 
the production costs of the urban economy. In London and Paris, the average speed of 
transport by car or by truck has been reduced to the speed that was reached at the beginning 
of this century with more primitive means. 
Besides the very important aspects above, the physical and cultural heritage of buildings, 
public spaces and urban design are also important elements in the quality of life for 
inhabitants of urban areas. 
Environmental issues are common to all urban areas but there are, of course, significant 
differences in the experience in different towns and cities. For example, the quality and 
quantity of green space that is offered: some cities such as Hannover, Evora and Brussels 
devote more than 20% of their surface to green spaces, while Rotterdam and Madrid have 
5% or less. 
In the wider environment, urban planning in the past has not always contributed to the 
potential of cities and of neighbourhoods to provide various functions simultaneously. 
Monofunctional areas have emerged, related to specific elements of human life (work, 
shopping, leisure, living). Such areas reduce the potential of cities to become a space where 
people can develop their lives to the fullest. Change is needed to urban planning policy to 
allow for greater sustainability, mix and diversity, to bring back the city as a lively meeting 
place for all activities at all times of the day. 
1.5 Fragmentation of power and integration of urban society 
The principle factors of integration in urban society go beyond those of the economy and 
the labour market. Apart from offering work, prosperity and commerce, cities also offer 
opportunities for leisure, learning, and cultural development. Cities should provide a "living 
space" and an identity to their inhabitants. 
There is a weakening sense of identity in cities, which is often demonstrated by the low 
level of participation in the local democratic process. Such participation is particularly poor 
in the most marginalised areas within cities, where the problems can be exacerbated by the 
presence of established immigrant communities which do not always exercise voting rights, 
Apart from the problem of identity, the low level of participation in elections in deprived 
urban areas diminishes the pressure on the administration to ensure the delivery of services 
in such areas. 
In terms of an institutional response, cities are operating in different legal, institutional and 
financial systems in the various Member States. As local authorities react to challenges with 
the policy resources at their disposal, it is only natural that their efforts in the field of urban 
development will differ. According to a 1996 study, some local authorities, for instance, 
operate within a greater tradition of local autonomy, and wield a larger spending power 
compared to other local authorities in the European Union (see Annex II). 
Many local authorities face the difficulty of reconciling their responsibility for resolving 
urban problems with their lack of institutional and financial capacity. Urban authorities are 
increasingly financing services which benefit the surrounding area, related to the fact that 
administrative borders no longer coincide with the real space of the urban area. This allows 
surrounding localities to benefit from efforts that are carried out by the often less 
prosperous population of the central city. Also, real income of urban authorities has 
declined over the last decade due to general restraints on government spending. In most 
cases, and especially in cases where social welfare spending of urban authorities has 
increased, this has led to a decrease in local investment. 
City management is further complicated by a multiplicity of public authorities with 
responsibilities at varying levels, from local, regional, national to European, which can both 
create difficulties for the successful implementation of policy on the ground and affect the 
perception of citizens as to who is really responsible for their city. This fragmentation is., 
therefore, an obstacle to responsible citizenship. 
At the same time, citizens are demanding more control over decisions affecting their lives. 
It is therefore becoming more important to engage the participation of local participants to 
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ensure their needs are addressed in implementing legislation or programmes. Also, the 
needs and views of women in urban development require greater attention. 
However, these are only partial responses. The vital question to be answered is "Why are 
people no longer happy to live all their lives in the city?". The city is, in many parts of 
Europe, no longer a desirable place to bring up children, to spend leisure time, or to live. 
This erosion of the role of the city is perhaps the greatest threat to the European model of 
development and society and one which needs the widest debate. 
2. CURRENT ACTIONS AT EU LEVEL RELATED TO URBAN DEVELOPMENT 
All of the policies of the European Union have an impact in some way on Europe's cities, 
although this impact is not always easy to measure. The following highlights the 
quantitative and qualitative impact of some key actions in four policy areas which have a 
particular bearing on the growth and development of Europe's cities: 
- policies which promote economic competitiveness and employment; 
- policy in favour of economic and social cohesion; 
- policies which help the insertion of cities into transEuropean networks; 
- policies promoting sustainable development and the quality of life in cities. 
2.1 Promoting competitiveness and employment 
The European Union faces the challenge of improving its competitive position in a context 
of liberalisation of world trade. Part of the reaction to this global challenge has been to 
create the Single Market, which was designed to increase the Union's competitiveness by 
abolishing obstacles to trade, investments, and labour mobility, and by creating an 
integrated economy which offers advantages of scale. In this respect, the Single Market has 
been the most far-reaching factor for change in recent years, and it has given a major 
incentive to economic performance. Within the same context of a global liberalisation and 
the creation of the Single Market, the EU has also decided to liberalise markets where 
national monopolies were dominating up until now, as in the case of telecommunications 
and transport. 
Cities find themselves mere directly exposed to global economic changes than before. This 
evolution has reinforced the potential of cities as autonomous creators of prosperity, and has 
made them less dependent on national economic developments. Much of both the external 
investment coming into the Union and the internal investment flews select the largest cities. 
This is especially true for specialist services such as banking (as in London, Frankfurt and 
Amsterdam). Meanwhile, international firms have generally established their European 
head offices in a few selected cities such as Brussels, Paris, London, Amsterdam, and for 
Japanese firms, Dusseldorf. The area around Amsterdam has been a major location for 
European-wide centres of distribution. Spain, Portugal and Ireland have received a 
relatively large share of the investment flows following the introduction of the Single 
Market, which is reflected in the good economic performance of the Madrid region and of 
the major urban areas of the Spanish eastern coast, and in the strong growth of the Lisbon 
and Dublin regions. 
However, only those cities which are capable of delivering top quality services and which 
have good infrastructural endowments can profit from the autonomy to attract activities 
which have a viable future and great added value. Therefore, the Single Market and the 
liberalisation of world trade has a highly differentiated spatial effect. The negative result of 
this can already be seen in the widening of regional disparities within some Member States. 
For weaker cities, global liberalisation can imply considerable adjustment costs. 
The capacity of cities to innovate tends to lie at the heart of a region's economic success. 
Some of the more successful regions are dominated by urban areas with dusters of top 
quality Research and Technological Development facilities - both public and private -
interlinked to an enterprise culture wedded to innovation. The Cohesion Report3 has 
established that there is a limited number of cities responsible for most of the RTD effort in 
the European Union. 
The most fundamental problem facing the Union today is that of unemployment, reflecting 
the failure to create sufficient jobs for Europe*s expanding work force. Despite efforts in the 
field of human resource and employment policy, the Union remains at present relatively 
powerless in the face of this major challenge. While increasing competitiveness especially 
of SMEs in internationally traded goods and services including tourism is important in 
terms of expanding employment opportunities, it is equally important to note that cities can 
also benefit from local employment initiatives which are not subject to a global logic. The 
Commission's Communication "A European strategy for encouraging local development 
and employment initiatives"4 has explored new opportunities for job creation, generally 
outside the activities where the constraints of international competition are the most 
pressing, both in the public and private sector (e.g. home help services and social sendees, 
environment, local public transport, security, housing, local commerce, tourism and cultural 
heritage). 
2.2 Policy in favour of economic tmd social cohesion 
The Structural Funds and the Cohesion Fund are the main financial instruments of the EU 
in the context of its regional and cohesion policy. Together, these funds amount to some 
170 bn ECU (1995 prices) for the period 1994-1999, or just under 0.5% of the annual Union 
GDP. The Union's structural policies address directly the problems of competitiveness, 
restructuring and under-development affecting the regions as well as the situation of 
disadvantaged social groups, especially with regard to unemployment. 
For Objective 1 regions - regions where development is lagging behind - the success of 
urban areas is crucial to their overall growth and development. Actions relating to urban 
development are currently estimated to absorb around 30 to 40% of total programme 
allocations (see annex III). Objective 2 addresses the restructuring problems of industrial 
areas. These generally have a highly urban character and urban development projects tend 
to occupy a large share of structural policies support. In some cases, more than 80% of the 
total support is spent on urban development actions (see annex ill). 
COM(96)542 - First Report on Economic and Social Cohesion - 1996 This Report has highlighted the 
existence of the so-called 'Archipelago Europe': London, Amsterdam/Rotterdam, Paris, the Ruhr, 
Frankfurt. Stuttgart, Munich, Lyon/Grenoble, Turin, Milan. Nearly half of all the resources under the 
Second and Third Framework Programmes have gone to the regions containing these urban areas which 
are the European centres of excellence. 
O.J.Ii.C. NoC265/3 - 12.10.1995 
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The Structural Funds and Cohesion Fund actions also help to improve the functioning of 
conurbations as a whole. Investments in public transport schemes, in the reclamation of 
derelict urban land, and in the treatment of urban waste water are only three examples of 
actions which contribute both to the growth of wider regional economies and to sustainable 
development in cities. 
In the new context of a global economy, the educational attainment of cities is becoming 
increasingly important as a factor for creating economic prosperity. In this respect, actions 
of the European Social Fund under objectives 3 and 4, which are of a horizontal nature and 
therefore concern all EU cities, can complement local efforts for improving human 
resources. Apart from actions which focus on long-term unemployed and young 
unemployed, specific operational programmes under objective 3 often aim at reintegrating 
disadvantaged social groups into the labour market, which is particularly relevant for urban 
areas. Also, the Commission has stressed the importance of the learning society and the role 
of multicultural education in preventing social exclusion. 
The Social Policy Forum, established in 1994 under the Commission's White Paper on 
social policy, brings together representatives of non-governmental organisations and social 
partners with the aim of offering citizens in Europe a means of maintaining a dialogue with 
the Commission. The convergence between the social dimension and citizenship in the 
European model of society is particularly evident in the report by the "Comité des Sages" 
about basic social rights which are constrained by the living and employment conditions in 
many urban areas. 
In this context mention should be made that 1997 has been declared "European Year against 
Racism" which is an important statement of support for actions in urban areas characterised 
by significant numbers of immigrants. 
Over recent years, increasing attention under EU structural policies has been paid to the 
socio-economic effects of spatial segregation in urban areas. In a first stage, Urban Pilot 
Projects (Article 10 of the ERDF regulation) have been used at the initiative of the 
Commission for innovative approaches in cities. The Antwerp project, for instance, 
established a strong neighbourhood-based partnership between community groups, various 
authorities and the private sector, and it succeeded in levering additional resources from 
various origins for the implementation of an operational plan with economic, social and 
environmental actions. The Dublin project was an innovative regeneration project, which 
demonstrated how the development of arts and culture can form the foundation for the 
regeneration of a deprived inner city district. 
It was this experience which convinced the Commission in 1994 to launch the Community 
Initiative URBAN under the Structural Funds. URBAN is aimed at establishing 
neighbourhood-based partnerships in deprived urban districts to tackle development 
problems through integrated programmes. The Commission has also reinforced the 
possibilities to intervene in deprived urban areas by allowing additional state aids to small 
enterprises which operate at the local scale, so as to encourage investment and job creation5. 
See 'Guidelines on state aid for undertakings in deprived urban areas', SEC(96)1706. Furthermore, aid to 
such enterprises can also be awarded under the so-called 'de minimis' rule, under the guidelines for aid to 
SMEs, and following the rules related to aid to employment. 
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Since the reform of the Union's structural policies in 1989, there has been a change in 
perceptions reflected in a growing awareness that actions to tackle social segregation in 
cities should also be integrated within the mainstream policy for regional development. 
More and more, the actions under Objectives 1 and 2 of the Structural Funds have sought to 
address the problems of deprived urban neighbourhoods and to ensure that new 
opportunities created in the wider region are also of benefit to them. In Portugal, for 
example, actions target the improvement of living conditions for residents in the 'barracas' 
of Lisbon and Porto. The Italian programmes, meanwhile, include actions aimed at 
improving the socio-economic development of the Pianura district of Naples. In UK, 
'Community Economic Development' has been identified as a specific programme priority 
to concentrate resources on pockets of exceptional urban deprivation. A similar priority 
exists within the Objective 1 programme for French Hainaut. 
Within the sphere of horizontal actions for human resource development, the Commission 
launched INTEGRA as part of the Employment Community Initiative of the European Social 
Fund. INTEGRA finances actions in deprived urban neighbourhoods combining a local 
approach to neighbourhood regeneration with employment initiatives. These actions aim at 
raising the awareness of the beneficiaries towards an integrated approach, which should 
simultaneously tackle the multiple problems that face people who are excluded from the 
labour market, such as housing." health, social protection, mobility, access to justice and to 
public services. 
2.3 Transport and transEuropean Networks 
TransEuropean Transport Networks and, more generally, the efficient provision of transport 
services are crucial for urban development and urban policies. In particular, a good 
transport system is a determining factor in the competitiveness of the urban economy and 
in the quality of life of city-dwellers. The notion of 'sustainable mobility' has become the 
central goal of the common transport policy which aims at reconciling the demand for 
mobility (by both business and people) while at the same time recognising the limits on 
resources and impact of transport operations on the environment. The common transport 
policy also addresses issues such as the integration of spatial planning priorities into 
transport infrastructure planning and the promotion of intermodal transport. 
Given existing imbalances in the urban system and in urban areas, transport policy must be 
designed to contribute to solving congestion and environmental problems. Moreover, 
transport policy aims to alleviate the problems of peripheral areas by linking them to the 
core of the Community as well as linking these areas together through improved 
infrastructure and with the establishment of a regulatory framework that ensures the 
provision of effective high quality transport services; either through the market or, where 
required, through the provision of public services. 
Public Transport has an important contribution to make to local transport networks and to 
social cohesion, notably in urban areas where people without cars, in particular low income 
groups or younger or elderly people, need to have access to economic and social activities. 
Traffic patterns in medium sized and large cities are usually well suited to reinforcing 
public transport. To benefit all urban dwellers, these transport services should ideally be 
accessible in terms of coverage of services, physical accessibility (notably to older people 
and people with reduced mobility) and affordability. Urban transport policies should also 
promote other alternatives to the use of the private car, such as cycling and walking. 
Therefore, a well targeted urban transport policy brings clear benefits to cities, It ensures a 
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more efficient transport system which should reduce congestion and therefore costs, reduce 
the number of accidents and impact less on the environment. The Commission's Green 
paper 'the Citizen's Network'6 sets out the benefits of public transport and the main action 
areas at a Community level to encourage and promote an integrated, intermodal transport 
system which fully exploits the potential of public transport. 
Such policies have to be complemented by appropriate pricing policies which ensure a more 
rational allocation of resources in the urban transport system. Cities should benefit from the 
implementation of this approach (described in the Commission's Green Paper on fair and 
efficient pricing in transport) with the reduction of congestion, environmental damage and 
accidents and the final result of a more effective and efficient transport system. 
TransEuropean Transport Networks (TETNs) are also instrumental in terms of improving 
access to cities, generating employment and allowing exchanges between cities and regions. 
More generally the TETNs have the potential to open up the Community territory, 
generating new opportunities for cities connected to the network. A continuing challenge 
for transport and structural policies will be to ensure that investments in TETNs are fully 
integrated with local networks so as to enable peripheral areas and local populations to 
benefit fully from the long distance links. Cities themselves form the nodal point which 
connects modal networks and are therefore essential elements of the TETNs, notably in 
allowing the development of seamless passenger and freight intermodal transport 
operations. 
The progressive integration of European transport markets has brought major benefits to the 
consumers in terms of greater choice and lower prices. Cities are obviously well placed to 
benefit from this liberalisation process. In cases where there is insufficient demand for 
market forces to provide regular and affordable services, Community legislation makes 
provision for public service obligation requirements to be applied by public authorities. 
Public service obligation requirements are also essential in the context of 
telecommunication networks, in order to avoid an opportunity gap between cities in the 
emerging liberalised environment. Specific less favoured urban areas or user groups may 
require accompanying measures to help accelerating the development of networks. The 
expansion of an efficient telecommunications network should also help to overcome 
mobility and urban congestion problems by widening locational choices for companies and 
allowing for a more flexible organisation of work. 
2.4 Promoting sustainable development and the quality of life in cities 
Sustainable development has increasingly gained legitimacy with the citizens in Europe as a 
determinant aspect of the quality of life for the present and future generations. The Green 
Paper on the urban environment of 1990 and the Sustainable Cities Report of 1996 both 
promote an integrated approach to urban problems encompassing social, economic, and 
environmental factors. The Sustainable Cities project, started in 1993, aims at encouraging 
and assisting cities and towns to establish and implement local agenda 21 or similar 
sustainability plans through policy reports, exchange of experience, networking and 
dissemination of good practices cases. 
European Commission, The Citizens'network. Fulfilling the potential of public passenger transport in 
Europe. Green Paper, Brussels- Luxembourg, 1996. 
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In the specific context of environmental policy, a more bottom-up approach is now being 
adopted by the Union. Better implementation in. a partnership approach and the use of 
alternative instruments in environmental policy, are priorities where the urban dimension 
plays an important role. The 'greening of the Structural Funds' has also become a central 
concern, as explained in the Communication on 'Cohesion and Environment'. 
In the field of RTD, the Commission has been investigating ways of easing urban traffic 
congestion, through measures to control traffic and promote public transport, including the 
use of new technologies for road pricing, integrated payment, travel information, etc. 
Important research in the treatment of urban wastewater and solid waste, noise, the 
protection of cultural heritage, urban air quality and its effects on human health as well as 
other environmental issues and socio-economic research related to urban issues is in 
progress. Other issues related to urban management that receive attention in the RTD 
programmes concern telematics, information society, energy, transport as well as new 
technologies for the building/construction industry, architecture, urban design ancl urban 
planning. A number of projects within the Telematics Application Programme focus on 
socially excluded communities within cities, such as unemployed and immigrants. 
Furthermore, the SAVE II programme supports the setting up of local agencies to help local 
authorities to formulate their energy policies. 
Within the context of sustainable development, the role of urban tourism for the growth of 
the local economy also deserves attention. 
3. DIRECTIONS FOR THE FUTURE 
The starting point for future urban development must be to recognise the role of the cities as 
motors for regional, national and European economic progress. At the same time, it also has 
to be taken into account that urban areas, especially the depressed districts of medium-sized 
and larger cities, have borne many of the social costs of past changes in terms of industrial 
adjustment and dereliction, inadequate housing, long-term unemployment, crime, and social 
exclusion. 
The twin challenge facing European urban policy is therefore one of maintaining its cities at 
the forefront of an increasingly globalised and competitive economy while addressing the 
cumulative legacy of urban deprivation. These two aspects of urban policy are 
complementary. Economic progress which undermines the cohesiveness of urban areas is 
unlikely to be sustainable over the longer-term: 
• urban society will pay a heavy price in terms of crime and anti-social behaviour if 
development is accompanied by major inequalities of access to the rewards of economic 
progress; 
• Europe as a whole will pay through disaffection of its citizens and the loss of support for 
the European model of society; 
• finally, the European economy will suffer because adjustment to rapid change, to 
maintain the competitiveness of Europe's cities, is only likely to succeed where it 
commands the widest consensus. 
Member States have primary responsibility in developing the urban policy for the next 
century. Issues related to the reinforcement of local democracy, citizenship, migration, 
-14-
employment, cultural development, education, social exclusion, urban crime, which have 
been discussed in part 1 of this document, need the involvement of policy instruments 
which are in the hands of national administrations. 
Nevertheless, as has been discussed in 1.5 above, there is a multiplicity of bodies involved 
in urban management., It will be essential to engage all levels - which start from the district 
level to the conurbation level up to the European urban system - within a framework of 
interlinking relationships and shared responsibility and achieve better policy integration. 
The various actions at the EU level should be assessed from the viewpoint of a coherent and 
sustainable development of cities. The Commission therefore invites comments in relation 
to an improved integration of Community policies relevant to urban development, in order 
to ensure that they fully correspond to actions at other levels and in particular to the needs 
of cities and towns. In the light of the outcome of the debate on this Communication, the 
Commission will examine how it can adapt its interna! co-ordination to contribute to urban 
development. Special attention should be given to at least the following directions. 
3.1 The need for an urban perspective in European Union policies 
The EU should play a complementary role in addressing urban issues as it has responsibility 
for policies in a number of sectors which have a direct bearing on the development and 
quality of life in urban areas. Possibilities for adapting these policies to improve their 
contribution to urban development need to be more exhaustively explored. Among the areas 
for further reflection are : 
• the development of clear targets for improvement of the urban environment with 
specified timescales, and the improvement of EU sectoral policies from the viewpoint of 
sustainability. This may involve the development of voluntary tools for urban planning 
aimed at sustainable development; 
• the development of the TETNs in particular to ensure efficient access to the networks 
from regional and local systems, and to ensure that resources are used to produce the 
maximum benefit in terms of environmental, employment and industrial objectives; 
• the reinforcement of intermodal freight and passenger transport, both for facilitating 
access to the city and mobility within the city. Special emphasis should be placed on 
promoting public passenger transport; 
• the targeting of RTD activities on the main problems facing the cities of tomorrow, 
namely integrated transport, energy, sustainable construction technology, information 
networks, technology for the protection of cultural heritage, urban sustainable development, 
environmental technologies and new urban vehicles, as presented in the key action "The 
city of tomorrow" in the Commission's formal proposal for the Vth Framework-
Programme7; 
COM(97)142 of 09.04.1997 
-15-
• telecommunications policies, including Universal Service obligations, to ensure the 
earliest provision of links to the information highway involving depressed urban 
neighbourhoods and smaller urban areas; 
• the strengthening of the commercial function of citiesg and neighbourhoods and of their 
role in the development of tourism; 
• the issues of migration, police and judicial co-operation, and crime which are dealt with 
under Title VI of the Treaty of the European Union; 
• the fight against social and economic exclusion, which is an explicit goal of the 
European employment strategy, as well as the fight against racism in the framework of the 
1997 European Year against Racism. The actions of the European Year should help to 
mobilise public opinion on the danger that racism constitutes for urban democracies in 
particular. Also, the reflections of the Social Policy Forum9 on fundamental social rights 
could pay increasing attention to social aspects of urban development problems; 
• public health policy and in particular health concerns related to urban deprivation and 
poverty (drug abuse, bad housing conditions, etc.); 
• the need for creating trust based relationships between various actors at the local level, in 
order to promote local empowerment, responsibility and initiative, and to reinforce 
employment policies, which is the Commission's aim with the Territorial Employment 
Pacts; 
Some of these issues are explored in the European Spatial Development Perspective10 
which should play an important role in organising the debate at the European level on areas 
of common interest and which have a spatial effect beyond the scope of single urban areas, 
regions or countries. 
3.2 Services of public interest and urban development 
The role of the public sector and city management is increasingly less that of direct provider 
of services. Member States have very different approaches to this issue. While recognising 
this diversity of organisational set-ups, the Commission highlighted in a recent 
communication that services of general interest are part of shared values in Europe. These 
services are at the heart of the European model of society, since they further fundamental 
objectives of the European societies such as solidarity and equal treatment within an open 
and dynamic market. These shared values translate into different ways of organising such 
services, from one region to another and from one sector to another. For economic services 
such as telecommunications, post, transport, energy or broadcasting, adjustments have had 
to be made in response to technological change, the globalization of the economy and user's 
expectations and needs. The Commission has underlined that, although Member States are 
8 COM(96)530 of 20.11.1996 - Commission Green Paper on Commerce 
9 See § 2.2 
10 The ESDP, launched in the Ministerial Meeting for Regional Policy and Spatial Planning (Liège, 
November 1993), is an exercise of the 15 Member States with the support of the Commission which aims 
at developing a strategic view on the spatial development of the Union's territory. 
- 16-
free to define their own policies in this matter and that it has no interest in who specifically 
provides the services, it is clear that the services must serve society as a whole, ensuring 
continuity, equality of access, universality and transparency. 
In non market services, such as education, training, and health care, public authorities are 
still the most important providers. Also here, serving society as a whole becomes 
increasingly important in the context of the dualisation of societies which is expressed most 
clearly in urban areas. The Commission's White Paper 'Teaching and Learning: Towards 
the Learning Society' emphasised this. Actions such as the 'second chance schools' in 
deprived urban areas and European networks have aimed at promoting cities which are 
capable of overcoming unequal access to educational resources. 
3.3 Contribution of the Structural Funds 
It is becoming more and more evident that cities play a crucial role for structural policies. A 
greater attention to urban development in future strategy building and programmes could 
result in an integrated strategy between actions in urban areas and in their wider regions, as 
well as in terms of economic and human resource development. To achieve such coherence, 
it is important that local authorities participate closely in the preparation and 
implementation of regional development programmes. Local authorities can also often 
bring in necessary expertise and knowledge on the local economy and labour market. 
For the present programming period, the following actions could already be undertaken: 
• the focusing of Structural Fund activities including labour market measures on pockets 
of high unemployment in the inner cities, or on the densely populated urban periphery, and 
a targeting of the special needs of immigrant groups; 
• the mainstreaming of experiences under the URBAN and INTEGRA programmes and the 
reinforcement of urban community development as a priority axis, including the notion of 
sustainable local communities with the active participation of the local population; 
• greater emphasis on transport issues to improve infrastructure and public transport 
systems rendering the peripheral regions more accessible and contributing to the resolution 
of congestion and environmental problems in urban areas; 
• the transfer of accumulated experience and best-practices on urban development. 
These actions will contribute towards focusing further attention on : 
• the role of cities as growth poles for regional development; 
• social inclusion and the alleviation of urban deprivation; 
• integrated and sustainable urban development that combines multisectoral solutions and 
involves investment in human as well as physical capital. 
3.4 Raising knowledge and promoting exchange of experience between cities 
There is an increasing need for significant and comparable information about cities, 
particularly amongst local and other public authorities in charge of urban policy. To ensure 
a solid base for improved decisions on common issues related to urban development, the 
Commission proposes to develop a two-step approach. 
-17-
In the short term, an "Urban Audit" to assess strengths and weaknesses of European cities 
will be launched. This Urban Audit will measure the quality of life in our towns and cities 
through the use of a simple set of urban indicators and a common methodology. 
The Commission will seek to establish a set of indicators which are simple to use and 
update to encourage the participation of local authorities both in the compilation and future 
use of the information in developing their urban policies. 
This tool could also, as a second stage, enable a better assessment of the impact of various 
national as well as European policies, on the development of urban areas. 
Building on the experience gained with the "Urban Audit", the Commission is considering 
setting up tools for measuring and monitoring sustainability. 
In parallel to this bottom-up action, the Statistical Office of the European Communities 
- Eurostat - will process the local level information already available in its databases to 
produce basic statistical information on cities and urban agglomerations. In the medium 
term, efforts already undertaken by Eurostat, in co-operation with the national statistical 
institutes to develop a harmonised information system, including standardised definitions of 
cities, have to be continued. 
Within the EU, numerous fora and networks exist where cities exchange experiences and 
co-operate on specific topics. The Sustainable Cities Campaign gathers local authorities 
with a specific concern to implement Local Agenda 21. In the context of article 10 of the 
ERDF regulation, the Commission proposed recently to support a number of networks 
related to particular topics such as economic development, SMEs. technology, 
environmental improvement, and equal opportunities for women in the economy7/. Other 
topics around which co-operation is actively promoted concern telematics, energy, 
transport, education, culture and research. Incentives are also given to EU local authorities 
to engage in decentralised co-operation with cities in other continents of the world in order 
to assist these cities in their development, strengthen the EU relations with third countries, 
and support the participation of local actors from the EU in the process of global integration 
(e.g. Med-Urbs, Asia-Urbs, URB-AL). 
During the coming years, the Commission will intensify its efforts for the transnational 
exchange of experience between cities, with the objectives of collecting and compiling all 
relevant experience in urban regeneration and sustainable urban development, including the 
results of research in the socio-economic field. 
4. FOLLOW UP OF THE COMMUNICATION 
In conclusion, it is clear that the number and scale of challenges facing cities and towns 
today and in the years to come do not lend themselves to easy solutions. It is recognised 
that many of the external pressures for change, including demographic and global economic 
trends, are not only out of reach of regional and national policies, but are also beyond the 
scope of European actions. 
1 ' Call for Proposals for internal interregional co-operation (O.J.E.C. C 386, 31.10.96), 
and Ecos-Ouverture 11 (O.J.E.C. C 125, 22.04.97)) 
-18-
The European Union, however, can react more effectively to urban needs and in many 
instances could set a more positive agenda which would go toward meeting at least some of 
these challenges. Leading factors should be greater cohesion within the Union and 
sustainable development leading to a lasting improvement in the quality of life of citizens. 
This agenda will require active participation at all levels of public authorities and should 
also seek to engage key actors from other sectors who have a contribution to make toward 
making European cities better places to be, which would contribute to realising the 
fundamental goals of the European Union as laid down in article 2 of the Treaty. 
The Commission does not underestimate the difficulties of this task. The participation of 
European citizens in the future development of their towns and cities may need new 
mechanisms which can offer better access and feedback to decision making. This will take 
time and considerable effort from all those involved. 
As a starting point the Commission seeks to engage in a wider debate on urban issues on the 
basis of this Communication. A dialogue will be sought between the Commission and other 
institutions, including the Council, the European Parliament, the Economic and Social 
Committee, the Committee of the Regions, local authority organisations and other 
interested parties. 
The outcome of this dialogue will be brought to an Urban Forum which the Commission 
intends to convene in 1998. 
-19-
LlST OF REFERENCES 
European Commission, Green Paper on the Urban Environment, 
Brussels-Luxembourg, 1990, 
Réf. CD-NA-12902-EN-C. 
European Commission, Europe 2000. Outlook for the development 
of the Community's territory, Brussels-Luxembourg, 1991, 
CX-71-91-518-EN-C. 
Eurostat, The statistical concept of the town in Europe, 
Luxembourg, 1992, 
CA-70-91-758-EN-C. 
European Commission, Urbanisation and the Functions of Cities in 
the European Community, Brussels-Luxembourg, 1992, 
CX-75-92-259-EN-C. 
European Commission, Europe 2000+. 
Co-operation for European territorial development, Brussels-
Luxembourg, 1994, 
CX-86-94-117-EN-C. 
European Commission, First Report on Economic and Social 
Cohesion 1996, Brussels-Luxembourg, 1996, 
CM-97-96-928-EN-C. 
European Commission, Green Paper Citizens network. Fulfilling 
the potential of public passenger transport in Europe, Brussels-
Luxembourg, 1996, 
C3-93-95-564-EN-C. 
European Commission, Social and Economic Inclusion through 
Regional Development. The Community Economic Development 
priority in European Structural Funds programmes in Great Britain, 
Brussels-Luxembourg, 1996; 
CX-98-96-421-EN-C. 
European Commission, European Sustainable Cities. Report by the 
Expert Group on Urban Environment, Brussels, 1996, 
CR-97-96-055-EN-C. 
Communication from the Commission, "Services of general interest 
in Europe", 1996, 
CM-98-96-897-EN-C. 
European Commission, Europe of cities. Community Actions in 
urban areas, 1997, forthcoming. 
European Environment Agency, Europe's Environment: the Dobris 
Assessment, Brussels-Luxembourg, 1995, 
CR-80-93-339-EN-C. 
ANNEXES 
g:\stef\urban\comm1 Oae.doc 
Oo 
Annex I: 
Urban areas in difficulty : 
characteristics of the populations involved 
Disadvantaged urban areas suffer from a combination of economic, social and urban 
problems. 
In order to define more accurately the populations affected, we have selected 29 URBAN 
Community Initiative programmes and have developed the following table. It shows 
similarities and differences among the 29 areas by indicating : 
• the unemployment rate among the active population; 
• the widespread breakdown of family structures (single parent families) increased by 
poverty and lack of opportunity; 
• the foreign population when this leads to dysfunctions. 
The following table allows us to assess the seriousness of the situation in each of these 
cities of the Community. 
?' 
COUNTRY 
Austria 
Belgium 
Denmark 
Finland 
France 
France 
France 
Germany 
Germany 
Greece 
Greece 
Ireland 
Ireland 
Italy 
Italy 
Italy 
Luxembourg 
Netherlands 
Portugal 
Portugal 
Spain 
Spain 
Spain 
Sweden 
United Kingdom 
United Kingdom 
United Kingdom 
United Kingdom 
United Kingdom 
North. Irl. City/town - Area 
Wien-Gurtel 
Antwerp-North-East 
Aalborg-North Jutland 
Joensuu-Rantakyla-
Utra 
Amiens-North and 
Etouvie 
Marseille-Centre 
Roubaix-Tourcoing 
Rostock 
Saarbrtlcken-Unteres 
Malstatt, Leipziger 
Str., Jenneweg, 
Hochstr., Ottstr., 
Fullengarten 
Patras 
Peristeri 
Cork 
Dublin-Ballymun-
Finglas-Darndale 
Cagliari-Pirri 
Cosenza-Core of the 
historic centre 
Siracuse-Ortigia 
Dudelange-
DifTerdange 
Amsterdam-
Bijlmermeer 
Lisbonne-Casal 
Ventoso 
Porto-Vale de 
Campanha 
Badajoz-Estramadure-
Historic centre, plaza 
Alta 
Badaiona-Serra d'en 
Mena 
Malaga-Historic 
centre 
MalmO 
Glasgow 
London-Park Royal 
Manchester-Moss 
Side, Hulme 
Nottingham 
Belfast-
Subprogramme I Populatio 
n covered 
by URBAN 
130,000 
66,324 
4,000 
12,500 
33,000 
31,306 
50,000 
19,000 
34,656 
77,000 
-34,300 
55,624 
84,000 
30,000 
22,500 
5,500 
2,154 
51,585 
4,200 
23,000 
12,114 
76,168 
46,889 
22,000 
19,198 
25,665 
28,000 
21,000 
37,134 Unempl 
oyment 
rate 
(%) 
11.30 
18.40 
11.90 
40 
28 
26.5 
34 
>19 
23 
15 à 17 
>14 
39 
40 
>43 
>33 
>31 
>2.14 
32.3 
Very 
high 
20 
25.18 
22 
35.8 
18 
38.8 
22.2 
23.9 
40 
<46 Household 
s receiving 
state 
benefits 
28 
12 
30 
55 
44 
70% of 
families Single 
parent 
families 
9 % of 
children 
36 % of 
inhabitants 
11.25% of 
families 
46 % of 
children Foreign 
population 
34% 
30% 
16.5% 
foreigners 
150 
nationalities 
34% ethnic 
minorities Total 
cost of 
the 
program 
me in 
MECU 
31.926 
15.234 
3.042 
5.279 
20.478 
17.583 
17.613 
16.016 
22.572 
12.417 
6.651 
6.651 
19.323 
18.555 
22 510 
1.033 
19.683 
24.387 
18.261 
14.286 
6.582 
14.285 
11.92 
16.235 
16.326 
17.743 
14.890 
16.580 European 
Communi 
ty 
contributi 
on in 
MECU 
9.770 
4.574 
1.521 
3.958 
7 
7 
7 
12 
8 
8.613 
4.988 
4.988 
9.188 
9.188 
9.188 
0.507 
4.65 
18.290 
12.793 
10 
3.291 
10 
4.97 
8.036 
7.653 
8.036 
6.786 
11.3 
Data on benefits', single parent families and foreign population are not available for all neighbourhoods. 
^^ 
Annex II: 
Local expenditure in the EU Member States1 
Public expenditure by level of government (%of GDP)2) 
Countries 
Austria 
Belgium 
Denmark 
Finland 
France 
Germany3 
. Greece 
Ireland 
I My 
Luxembourg 
Netherlands 
Portugal 
Spain 
';'.;'.• :Swe^eii>;::-;:;;:;::;:::;: 
:-^:-mB Public 
expenditures 
48.4 
55.2 
61.1 
59.0 
50.9 
45.5 
51.2 
38.7 
52.9 
40.7 
55.9 
34.7 
40.7 
67.3 
42.7 Central 
government 
17.9 
25.3 
18.8 
15.7 
16.4 
10.8 
27.0 
19.6 
23.2 
16.1 
15.6 
21.7 
10.6 
26.2 
21.2 Intermediate 
and local 
government 
13.8 
8.3 
33.3 
20.1 
9.5 
15.2 
6.4 
14.5 
15.3 
4.5 
20.5 
3.8 
10.6 
28.1 
16.0 Social security 
funds 
16.7 
21.6 
9.0 
23.3 
25.1 
19.5 
17.9 
4.6 
Î4.4 
20. Ï 
19.7 
9.3 
19.4 
13.0 
5.6 
1 Source of the data : European Commission - DG XXI - Studies on European local government 
finance. The outcome of the Comparative study of the 15 countries - December 1996 
2 Source : OECD National Accounts, 1995 
3 Include only West Germany 
Local government spending as a share of national income 
and total government spending4 
4 Source : OECD National Accounts, 1995 
7k 
-6 
Annex III: 
Estimate of the financial impact of the European Regional 
Development Fund and the Cohesion Fund on Cities 
The ERDF and the Cohesion Fund support various measures that are important for the 
economic development of backward areas. The measures are traditionally presented in 
regional or national programmes, which tend to make the significant impact on urban 
development less visible. Strategy-building for regional development is also a process 
that mostly takes place at national or regional level, which runs the danger of 
underestimating the contribution that cities make to regional and national growth. 
In order to contribute to a debate on the importance of cities for regional development, 
the Commission has attempted to estimate the magnitude of the present financial impact 
of ERDF and Cohesion Fund actions on urban areas. The exercise under consideration 
concerns the ERDF part of the objective 1 and 2 programmes (excluding the Community 
Initiatives), and the Cohesion Fund. Cities are defined as urban areas with at least 
100,000 inhabitants5. 
1. ERDF 
The global ERDF budget under consideration for this exercise amounts to approximately 
60 bn ECU6. Around 21 bn ECU of this has been identified as being spent in cities. 
Therefore, it is estimated that approximately 40 % of the total ERDF budget for 
objectives 1 and 2 is spent on urban development. As could be expected, a clear 
distinction in urban impact appears between the programmes in objectives 1 and 2, which 
are therefore treated separately. 
1.1 Objective 1 
Figures on the urban impact in Greece, Spain, Portugal, and Ireland are of a comparable 
magnitude, and amount to approximately 40%. Other objective 1 regions are of a 
somewhat different nature, and the Operational Programmes show also a different impact 
on urban development. Merseyside and the former East-Berlin, for instance, are 
extremely urbanised areas, where programmes show a high impact in terms of urban 
development actions. 
This exercise has no scientific pretensions. The financial impact on urban development has been 
reconstructed mainly through the privileged knowledge of the Commission's desk officers on their 
regions. The aim was to arrive at a general idea on the importance of regional and cohesion policy for 
bigger cities in each Member State. The decision \o limit the cities under consideration to 00,000 
inhabitants is somewhat arbitrary, and has been treated flexibly where this seemed necessary. The 
actions that have been included for consideration relate to urban development in a narrow sense. For 
instance, transport infrastructure to connect cities has an obvious impact on urban development, but it 
has not been included in this exercise, due to the fact that its impact goes also far beyond cities. 
The figure concerns almost all of the ERDF part for objective 1 1994-1999 and objective 2 1994-
1996. 
-7-
The total ERDF support to the CSF-Portugal amounts to 8.724 MECU. 47 % of this 
(4,082 MECU) has been identified as "urban". Around 1,200 MECU of the OP 
"modernisation of the economic structure" is allocated to support for industries in urban 
areas. Other measures that are financially important for cities concern the improvement 
of transport infrastructure (estimation of 836 MECU) and education (estimation of 500 
MECU). Apart from these measures which are sectoral in nature, there is also a special 
OP for "environment and urban renovation". The subprogramme for urban renovation 
(ERDF support of 299 MECU) aims at improving the living conditions in the "barracas" 
of Lisbon and Porto (see 3.1 of this annex). 
In Greece, 34 % has been identified as being urban, i.e. 3,207 MECU out of a total of 
9,489 MECU. Around 70% of this is situated in Athens (approx. a quarter of the total 
ERDF allocation for Greece goes to Athens, which corresponds to approx. 2,200 
MECU). The investment in the Athens metro (ERDF contribution of 783 MECU) is the 
most important project in financial terms for all EU urban areas. Amongst other things, 
important benefits for Greek cities concern the measures for research and technology 
(approx. 250 MECU), of which more than 50 % is situated in Athens, and urban 
environmental improvement (approx. 150 MECU). 
In Ireland, around 35 % (i.e. around 900 MECU out of a total of 2,562 MECU) has been 
identified as "urban". Important individual projects in Ireland concern the redevelopment 
of Temple Bar area in Dublin (20 MECU), and the investment in the Light Rail Transport 
System in Dublin (154 MECU). Also, a specific "urban and rural development OP" 
promotes local enterprise support measures, employment, investment in the physical 
renewal and economic regeneration of urban areas. Particular attention is paid to the 
assistance of enterprise and employment in disadvantaged areas of the country. The total 
ERDF support for this OP amounts to 180 MECU. 
The total ERDF support for Northern-Ireland amounts to almost 677 MECU, of which 
approx. 19 % (126 MECU) has been identified as urban. Important projects concern the 
physical redevelopment of the Belfast Docks in the city centre (16,5 MECU) and a 
sewage treatment plant for Belfast (20 MECU). 
In Eastern Germany, the situation is obviously exceptional for East-Berlin, where the 
Structural Funds are heavily involved in the redevelopment of numerous sites, both in the 
heart of the city as well as in some more industrial zones. The construction of the eastern 
part of the new German capital happens with the support of 530 MECU of ERDF money 
(100% of ERDF support). For the other Lander, figures amount to 20 and 25 %. The 
combined figure for ERDF support to urban redevelopment in Eastern Germany is 
approx. 1,670 MECU, or 24% of the total ERDF support. 
In Spain, 15,944 MECU has been foreseen for the period 1994-1999, of which 5,984 
MECU is estimated to benefit urban development. The actions that are supported relate to 
the extension of high quality digital telecommunications networks in all urban areas, to 
the equipment of industrial land in cities in order to centralise economic activities in 
certain zones, to the improvement of the urban environment by investments in green 
areas and parks, to research and development, and to urban transport. Examples of 
important urban transport projects concern roads, railroad transport in the metropolitan 
area of Valencia, and the renovation of the areas around train stations in various cities. 
In Italy, important contributions to urban development concern especially Naples, Bari, 
and Palermo. An estimation of the financial impact on urban areas for most regions 
i* 
-8-
(Abruzzo, Calabria, Campania, Puglia, Sardegna, Sicilia) shows that around 30% is spent 
in urban areas, which corresponds to approx. 1,000 MECU. 
For France, objective 1 concerns Corsica, French Hainaut, and the DOMs. Of the total 
ERDF budget which amounts to 1,335 MECU, approx. 750 MECU (56%) is spent on 
urban development. 
The case in French Hainaut is particular, as it concerns one of the objective 1 areas which 
are characterised by industrial decline. Actions in such areas relate very much to urban 
regeneration. In French Hainaut, for instance, one of the quantified objectives of the 
programme is to reach 35,000 people in depressed urban areas, which is around 1/3 of the 
total population that lives in distressed urban areas in the region. At the level of the 
whole region, the programme foresees important measures to stimulate economic activity 
and employment opportunities in the urban centres of the region. 
In Merseyside, approximately 90 % of ERDF support goes to urban redevelopment. The 
equipment of sites and premises for business development, and incentives for local 
businesses are important measures herein. As in the case of French Hainaut, special 
measures are taken for reaching particularly vulnerable groups through what is called 
'Community Economic Development' (see point 3.2 of this annex). Part of the 
programme targets the most depressed urban areas, where the ERDF allows more socially 
oriented measures in order to reintegrate difficult categories of unemployed into the 
labour market. 
Another objective 1 region characterised by industrial decline is the province of Hainaut 
in Belgium, which receives 515,92 MECU of ERDF support. Important actions take 
place in Charleroi, Mons, La Louvière and in some other medium-sized cities. 
Finally, in Flevoland (the Netherlands), an estimated 37% out of a budget of 80 MECU is 
spent on urban development, mainly in Lelystad and Almere. 
1.2 Objective 2 
The estimations on the financial impact of objective 2 programmes on larger urban areas 
show very high figures for Britain and Germany, and also for the region around Liège in 
Belgium. In some of these cases, figures go beyond 80%. For Britain, there is 
considerable differentiation amongst the objective 2 areas. In less densely populated 
zones (Eastern Scotland, Western Scotland, and Industrial South Wales), the financial 
impact on greater urban areas of the ERDF is less outspoken (approx. 40 to 50 %) than in 
the English objective 2 zones. The situation in English objective 2 zones, where 
percentages tend to be around 80 to 90 %. is comparable to the one in Merseyside 
described above. A high proportion of the total Structural Fund expenditure in Britain is 
accounted for by the densely populated industrial belts from Merseyside to the Humber 
across central Scotland through Glasgow. The area around Birmingham, the UK's second 
city, is also eligible. 
Compared to Britain, there are less variations between German objective 2 regions. 
Percentages concerning the financial impact on urban areas range from 80 to 100 %. 
In the Netherlands, France, and Spain, objective 2 programmes have also an outspoken 
effect on urban development. The financial impact of the ERDF on bigger cities is mostly 
situated around 50 to 60 % of the total ERDF support. In French regions, values range 
\ 
_9-
from approximately 30 % in some cases (Centre, Auvergne, Languedoc-Roussillon) to 
75 % in others (Basse-Normandie, Champagne-Ardennes, Franche-Comté, Pays de Loire, 
Poitou-Charentes). In the Netherlands, especially Arnhem-Nijmegen stands out as the 
whole area is "urban" in character. In Spain, examples of important projects in objective 
2 areas related to urban development are the public transport system in Bilbao and 
Barcelona, and the recuperation of historic buildings for social, educational or economic 
purposes. In Italy, the estimations on the financial impact on cities vary from 15% 
(Lazio) to 70% (Liguria). 
A different picture emerges for the objective 2 programmes in the Nordic countries and 
in Austria. Objective 2 areas in these countries have no cities with more than 100,000 
inhabitants, the criterion that was used for this exercise. In this sense, an exercise which 
only focuses on larger cities does not do justice to the situation in these countries, where 
the economic development policy is concentrated on smaller towns, which serve as 
economic growth poles for bigger geographical areas. 
The considerable variation between the Member States seems to correspond partly to a 
different structural reality, related to different patterns of industrialisation and 
urbanisation. One important structural indicator to interpret the given figures on the 
financial impact on cities concerns the population density in the objective 2 areas. The 
following table gives the national average density (population per km2) of the objective 2 
areas for each country: 
Country Average inhabitants/km2 
•• in objective 2 areas 
Belgium 484 
Denmark 88 
Germany7 911 
Spain 349 
Italy 256 
France 167 
Luxembourg 389 
Netherlands 472 
Austria 73 
Finland 46 
Sweden 26 
UK " 650 
Total EU 245 
The densities (population per km2) in objective 2 areas are remarkably lower in Austria, 
Denmark, Finland and Sweden , compared to the European average of 245 (the previous 
EUR 12 average population density in objective 2 areas was 313 inhabitants per km2). 
This shows that these areas had a different industrialisation pattern than other countries, 
and that industrial decline is more expressed in "semi-countryside areas". For the 
Scandinavian countries, the importance of the wood and forest industry, which developed 
in a process of "countryside industrialisation", could partially account for this. 
There is a small underestimation of the density figures for Germany. 
ii 
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For UK, Germany and Wallonia in Belgium, the figures show that industrial decline is 
mainly a phenomenon of highly urbanised areas, and that therefore, objective 2 policies 
in these countries are mainly concerned with urban redevelopment. In Germany, densities 
are extremely high, related to the small surface of some zones with high population 
figures (e.g. Berlin West, Bremen and Bremerhaven, P.uhrgebiet). The projects supported 
in these countries are on the one hand mostly typical economic regeneration projects 
directly related to productive activities (physical investment, enterprise support measures, 
technology), and on the other hand measures which are more of a facilitating nature (e.g. 
urban transport in some cities, intermodal transport facilities). 
2. COHESION FUND 
For the Cohesion Fund, there is a 50/50 division between transport and environment 
projects. Transport concerns mainly roads and rail (respectively 71 % and 21 % of all 
transport projects). These projects are always connected to the Transeuropean Networks 
(TENs), or they should feed the TENs. Therefore, there is an important indirect impact on 
urban areas. The reduction of travel time between cities, and the connection of the 
periphery of the EU with the core, should decrease production and distribution costs of 
enterprises in peripheral cities. Nevertheless, a quantification of the financial benefits that 
these transport projects bring to cities is difficult. 
As far as the environment is concerned, 72 % of the Cohesion Fund projects concern 
water (water supply, or wastewater treatment), and 4 % concerns waste treatment. Most 
of these projects aim at improving the functioning of urban areas. 
3. STRUCTURAL FUNDS MEASURES FOR DEPRIVED URBAN AREAS 
On the demand of the European Parliament, the Commission decided to launch the 
Community Initiative URBAN in 1994, hereby calling specific attention for the problem 
of spatial segregation in cities. Indeed, the concentration of unemployed and other 
socially vulnerable groups in specific neighbourhoods has been rising to worrying 
proportions over the recent years in many EU cities. 
The CI URBAN has a budget of around 850 MECU for the period 1994-1999, with which 
programmes will be implemented in approximately 115 cities. Besides of a positive 
contribution in socio-economic terms, URBAN wants to act as a catalyst in attracting the 
attention to the problem of social exclusion and segregation in cities, and it wants to 
enable the understanding of the best methods of intervention. 
Apart from the Community Initiative URBAN that was launched by the Commission, 
more and more actions in the Community Support Frameworks/Single Programming 
Documents of the Structural Funds, which are proposed by the Member States 
themselves, relate to actions that generate sustainable economic development, 
employment opportunities, and good general living conditions in deprived urban areas. 
The following are some illustrations. 
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3.1 The Operational Programme for Environment and Urban Renovation in 
Portugal 
On the proposal of the Portuguese authorities, the Commission adopted an Operational 
Programme for "Environment and Urban Renovation". This subprogramme on Urban 
Renovation contains three measures: 
• the renovation of neighbourhoods characterised by bad housing conditions; 
• the rehabilitation of these zones with new activities; 
• the renovation of the area for the Expo '98 in Lisbon. 
The programme wants to improve the living conditions of the Portuguese urban 
"underclass", and contributes to the social cohesion in the two metropolitan areas of 
Lisbon and Porto. Both cities contain neighbourhoods with "barracas", which lack basic 
amenities and which are characterised by an increasing marginalisation of the population. 
In quantitative terms, the programme aims at eliminating 200 neighbourhoods that are 
composed of barracas over the course of the programming period. This operation 
involves around 25,000 families. The ERDF does not co-finance the housing aspects of 
the programme, but it supports other investments in the area that contribute to better 
living conditions and to the creation of employment opportunities (establishment of 
services, commerce, small industries, social equipment, infrastructure). 
The subprogramme on Urban Renovation contains also a measure that aims at the 
rehabilitation of the derelict land in Lisbon where the Expo '98 will take place. The 
reconversion of an area of 310 hectares and the equipment of the area with modern 
infrastructure will be a major contribution to the development of the whole Lisbon area, 
and to the conditions in this specific part of the city, which is situated in the communes 
of Lisbon and Loures. 
The total cost of this subprogramme on Urban Renovation amounts to 487 MECU, to 
which the ERDF contributes 299 MECU. 234 MECU of the total cost is allocated to the 
renovation of the poor neighbourhoods, while 245 MECU goes to the reconversion of the 
area for the Expo '98'8. 
3.2 Community Economic Development in Great Britain 
An important innovation is occurring in the British programmes under the label of 
"Community Economic Development" (CED). Within Merseyside and the objective 2 
areas, the CED priority concentrates resources on pockets of exceptional deprivation 
(which is called "spatial targeting"). The disadvantages in terms of social exclusion and 
long-term unemployment in these areas are so considerable that they face the prospect of 
exclusion from the mainstream actions. CED seeks to involve local communities and 
businesses in the process of regeneration. An essential aspect of the priority concerns 
capacity building measures, which attempt to strengthen individuals and local 
organisations to implement local development actions. Efforts are also done to create 
linkages between the deprived communities. 
It is important to note that CED allows to focus resources in accordance with desires and 
needs of the communities themselves. Therefore, actions related to CED can be more 
8 The remaining 8 Mecu is allocated to technical assistance. 
3 O 
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social in nature, the reason being that such measures are an indispensable intermediate to 
bring individuals in deprived communities back into productive activities. In attempting 
to reintroduce the most vulnerable groups into the regular economy, CED can make a 
positive contribution to the wider aims of improving regional economic development. 
The total ERDF support to the CED priority amounts to 271 MECU for the period 1994-
1996 (objective 2) and 1994-1999 (objective 1). 
3.3 The socio-economic development of the Pianura neighbourhood in Naples 
(objective 1) 
In the framework of the CSF objective 1 for Italy, the Commission included a reference 
to the importance of local development actions in urban areas in order to improve the 
urban environment and to combat social exclusion. Following this, the Italian authorities 
recently proposed a programme to the Commission which aims at stimulating the socio­
economic development and improving the environment of Pianura, a neighbourhood of 
approximately 54,000 inhabitants in Naples. The neighbourhood of Pianura has been 
characterised by a rapid urbanisation. It grew from around 10,000 inhabitants in 1951 to 
approximately 54,000 in 1991. A third of the active population is employed in the 
agricultural sector compared to 4% for the whole city of Naples. 
The proposed programme amounts to 55 MECU (27 MECU ERDF, 24 MECU from the 
Commune of Naples, and the remaining part from the national government and the 
private sector). The ambition of the programme is to create 910 jobs in the Pianura 
neighbourhood. Apart from actions which are classically supported by the ERDF 
(creation of new enterprises, business support measures, ...), the measures that are 
proposed relate also to the creation of an active associational life, and the establishment 
of the identity of the Pianura neighbourhood. Through the CSF for Objective 1 in Italy, 
the Commission has also expressed its intention to launch similar actions in Catania and 
Palermo, which should be made operational by the Member State in the near future. 
3.4 Distressed urban areas in the CSF for French Hainaut (objective 1) 
Within the framework of the objective 1 programme for French Hainaut, the Single 
Programming Document foresees almost 40% of the resources for the 'local 
regeneration' measure. The Structural Fund support to this measure amounts to 165 
MECU out of a total support of 440 MECU. Important submeasures concerning local 
regeneration are the reconversion of disused industrial and urban areas, urban 
development and restructuring, support measures for depressed areas, and measures to 
combat exclusion through occupational integration. Together, these submeasures account 
for around 75 MECU of Structural Fund support. 
it 
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Annex IV: 
Some relevant forthcoming events 
The debate on urban development at European level will benefit from various events such 
as : 
• the Summit of Regions and Cities, organised in Amsterdam by the Committee of 
Regions in May 1997. This Summit will especially focus on the Intergovernmental 
Conference; 
• the Informal Meeting of Ministers on Regional Policy and Spatial Planning under the 
Dutch Presidency (Noordwijk, 9-10 June 1997); 
• the second Social Policy Forum at the end of 1997, which will concentrate on issues 
related to exclusion; 
• a Third Sustainable Cities Conference prepared by several regional conferences, 
envisaged for 2000. 
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ISSN 0254-1475 
COM(97) 197 final 
DOCUMENTS 
EN 14 07 05 13 
Catalogue number : CB-CO-97-208-EN-C 
ISBN 92-78-19641-X 
Office for Official Publications of the European Communities 
L-2985 Luxembourg