Key challenges and opportunities for cities and regions and MFF post 2020

The EU budget is indeed facing unprecedented challenges which may have profound impacts in the size and structure of the post-2020 multiannual financial framework (MFF). One of the greatest challenges will be to handle the impact of Brexit on the EU budget's revenues. This is not only a budgetary issue; it may well entail a shift in the ambitions of EU action as well as in its focus. Part of the foundations of Brexit are also to be found in the EU budget and should not be ignored. The EU is under pressure to deliver in critical areas such as economic growth, environmental protection, climate change, security and migration. Depending on the role the EU will be expected or have to play, this may have considerable budgetary implications. But the challenge is also how to adapt the budget given its limited (and unlikely to be increased) size. There is also a risk that member states, rather than focusing on Europe's changing needs, will fall prey to pork barrel politics in order to protect their receipts from the EU budget. It is possible that cuts generated by Brexit will affect the local and regional authorities (LRAs). An impact on LRAs is also to be expected from the revision of the budget's effectiveness, efficiency, governance, flexibility and general rules. Indeed, several reform processes are already in action, whilst others are still at an embryonic stage or under reflection. It is therefore difficult to determine unequivocally how the next MFF will impact LRAs. On the bright side, the multiple challenges have also led to extensive reflection on the functioning of the budget, and some of the latest innovations and proposals for simplification also point to potential improvements for the beneficiaries, as long as simplification does not lead to subsequent amendments that create even more complexity.