The financial crisis has diminished the European financial sector's ability to channel funds towards long term investments undertaken by European local authorities. Since 2008, systemic crises have also led a movement towards territorial re-organisation and several efforts to increase the efficiency of local public services. In this respect, various strategies, some of them controversial, have been implemented to rationalise resources despite the exponential pressures that European local authorities face (migration challenges, urban renovation, increased inequalities, ageing populations, social and ecological transitions…). However, and notwithstanding a recent decrease, European local authorities are still responsible for over 65% of public investments in Europe. They are therefore one of the main driving forces of the European economy.
This situation represents an opportunity to rethink the European project on a political level, as well as on an economic and social level; the role played by local authorities in developing their territories and the way they cooperate between them; the dominant economic model and the current European consumption-centred lifestyle.
To face these challenges, new strategies are emerging in Europe in order to diversify the sources of funding for local authorities. For instance, the economic context (especially the decrease in public spending and the requirements to lower the carbon footprint) has made clear that the model of funding is evolving towards mobilising private capital and national, regional and international public financial institutions, as well as operating in the bond market.
Optimising resources and local assets through a revised cooperation between all level of local authorities (vertical cooperation) and within urban stakeholders (horizontal cooperation), and incorporating environment friendly management systems are nowadays on the agenda of local authorities and their partners, along with innovative alternative models to support local economy and finance.
In this regard and to meet the objectives of the REsolutions to fund cities programme, three research themes stand out and blend in together in Europe, in order to promote the various aspects of financing a resilient, inclusive and sustainable urban development: mobilising the "traditional" financial resources; optimising resource management; encouraging to explore alternative and endogenous funding solutions.
1/ Readjusting and putting renewed effort into "traditional" sources of funding in order to meet the local needs in different European contexts, diverse local circumstances and associated growing needs. Top-level institutional actors and urban representatives will assess loan strategies (solidarity based or socially and economically responsible bond issuance); fiscal consolidation; deploying new European financial engineering models; giving directions to regional policies; innovative or efficient Public Private Partnerships etc.
2/ Optimising and rethinking resource management and local investments
This section will be devoted to analysing equalisation systems, horizontal and vertical cooperation models, social and environmental management schemes such as the Eco-budget, cost-cutting initiatives (energy efficiency, waste recovery, etc.) or methods to avoid the costs of inaction, and smart technologies.
3/ Rethinking financial and economic innovations on a local scale: on-going alternatives
For several years, territories have been the fertile soil for innovative, global and resilient initiatives. These initiatives allow local authorities to re-examine the question of wealth, explore various governance models (Community Land Trusts), local democracy systems (participatory budgeting) or even active solidarity and economic exchange schemes (complementary local currencies, support to social and solidarity based economy, local finance). Whenever they help to indirectly fund local authorities, these strategies also contribute to strengthening territorial autonomy and resilience.
In a nutshell:
- How did the financial and institutional European partners adapt to a context of European systemic crisis in order to meet territorial needs ?
- What type of partnerships, initiatives and local funding schemes are local authorities opting for and relying on nowadays ?
- Which strategies and financing tools should be implemented or adapted in order to promote dynamic territories, funding key sectorial policies, a solidarity-based equlisation system between territories ?
- How whould these systems be integrated in horizontal and vertical cooperation policies ?
- Which conditions need to be gathered in order to transfer and replicate successful experiments ? According to what terms of engagement for urban actors ?