As the European Union prepares its next long-term budget for 2028–2034, decisions taken now will influence how Europe’s regions develop, cooperate, and innovate for years to come. The ongoing discussions on the next Multiannual Financial Framework (MFF) offers a crucial moment to rethink how EU funding can better connect territories rather than treat them separately.
Insights from the Horizon Europe project RURBANIVE — RUral-uRBAN synergies emerged in an immersIVE innovation ecosystem — show that Europe’s prosperity increasingly depends on recognising and strengthening the connections between rural and urban areas.
Drawing on policy work coordinated by AEIDL, the European Association for Innovation in Local Development, contributes to the upcoming policy work in RURBANIVE – especially the upcoming first RURBANIVE Forum meeting on Agenda for Cities – evidence and recommendations to ensure that EU funding better supports inclusive, sustainable local development across Europe.
At the heart of this work lies a simple reality: Europe’s rural and urban territories are interdependent, and policy needs to reflect this.
Rural and Urban Areas: Two Sides of the Same System
Rural communities rely on cities for services, markets, and innovation networks. At the same time, urban centres depend on rural areas for food, ecosystem services, landscapes, heritage, and knowledge that sustain economic and social well-being.
Despite this mutual dependency, policies often frame the relationship as one-directional: rural areas supplying resources while cities supply technology and markets. This narrow view overlooks the fact that innovation, resilience, and quality of life depend on cooperation in both directions.
RURBANIVE promotes a more balanced approach through practical experimentation across six domains that help generate rural–urban synergies and well-being economies:
- Circular Bioeconomy
- Ecosystem and Biodiversity Restoration
- Improving Logistics and Shortening Value Chains
- User Engagement, Empowerment, Society, Territorial awareness
- Culture, Landscape, Heritage access & Promotion
- Enhanced Mobility Solutions
Through participatory and multi-actor approaches, the project tests solutions in different European regions, providing stakeholders with tools to strengthen governance, innovation, and cultural awareness.
Policy Progress Exists — but Gaps Persist
EU policies increasingly acknowledge territorial interconnections. Horizon Europe, as well as instruments within the Common Agricultural Policy such as Smart Villages and the LEADER programme, already encourage innovation partnerships linking rural and urban actors.
Yet implementation remains fragmented.
Many policies affect both rural and urban territories without explicitly encouraging cooperation between them. As a result, opportunities for integrated development are often missed. Policy fragmentation, digital divides, regulatory complexity, and inconsistent territorial targeting continue to limit impact.
The conceptual framing of urban–rural relationships also remains underdeveloped, frequently overlooking how rural territories contribute to urban innovation and sustainability beyond raw material supply.
At the same time, new opportunities exist through initiatives such as the Long-Term Vision for Rural Areas, the Rural Pact, and emerging funding mechanisms like the European Competitiveness Fund.
Four Strategic Directions for the Next Budget
Based on RURBANIVE findings, four improvements could help future EU funding better support territorial cooperation.
First, territorial classifications across the EU should be harmonised. A unified framework would allow funding programmes to better target functional areas rather than administrative boundaries.
Second, the “rurban” perspective — seeing rural and urban territories as part of a continuum — should be embedded in future EU strategies, including the Rural Action Plan and the Agenda for Cities.
Third, fragmented local development initiatives should be consolidated. A mission-oriented framework, including an 8% earmark for local development funding and a dedicated funding window for functional areas, would support coherent territorial investment.
Finally, urban and rural policies should be systematically evaluated using Better Regulation tools, such as Territorial Impact Assessments and Rural Proofing, ensuring policy coherence and alignment with Sustainable Development Goals.
What the Proposed Budget Means Across Key Domains
Circular Bioeconomy The proposed budget positions the circular bioeconomy as a driver of the green transition, with significant support through the European Competitiveness Fund and cross-cutting funding streams. However, monitoring frameworks risk overlooking systemic transformation, potentially favouring low-risk investments over innovative, high-impact solutions that strengthen urban–rural resource loops. | Ecosystem and Biodiversity Restoration Environmental objectives are increasingly integrated across EU policies, and stronger safeguards are in place. Yet fragmented funding risks reducing impact, particularly for landscape restoration projects. Greater coherence between agricultural, competitiveness, and environmental instruments is needed to connect ecological recovery with socio-economic development. | Culture, Landscape, Heritage access and promotion Cultural funding remains substantial but is measured mainly through quantitative outputs such as visitor numbers or job counts. Indicators related to resilience, inclusiveness, and fair working conditions are largely absent. Without broader measures, rural culture risks being reduced to tourism promotion rather than recognised as a driver of social cohesion and innovation. |
Enhanced Mobility Transport policies align with climate goals but continue to prioritise infrastructure expansion rather than accessibility and affordability. Indicators rarely capture mobility challenges faced by rural residents or vulnerable users. Mobility policy could better support territorial cohesion by measuring accessibility, affordability, and social inclusion outcomes. | Improving Logistics and Shortening Value Chains While investments target decarbonised transport infrastructure, rural mobility needs remain under-addressed. Demand-responsive transport and shared mobility services are not adequately reflected in current funding indicators, leaving many communities underserved. | User Engagement, Empowerment, Society & Territorial Awareness New National and Regional Partnership Plans will guide funding after 2027. However, leaving territorial targeting entirely to Member States risks weakening previous progress in addressing rural depopulation and spatial inequalities. Maintaining an earmarked share of funding for local development aligned with the objective of bringing Europe closer to citizens would help preserve territorial balance. |
A Shared Territorial Future
The next EU budget is more than a financial instrument — it will shape how territories cooperate, innovate, and respond to future challenges.
RURBANIVE demonstrates that rural and urban areas succeed when they work together within shared innovation ecosystems. Embedding this understanding into EU funding and governance structures is essential for building resilient, inclusive, and future-ready regions.
If Europe wants balanced development, rural–urban cooperation must move from policy ambition to practical implementation. The next MFF offers the opportunity to make this shift a reality and build a truly connected Europe.
References:
Pazos-Vidal, S., & Sinerma, J. (2026). Analysis and mapping of relevant policies at EU level (Version v1). Zenodo. https://doi.org/10.5281/zenodo.18348724
Pazos-Vidal, S., & Sinerma, J. (2025). RURBANIVE Policy Brief #1 – Prospects for Rural-Urban policies in the post 2027 policy framework. Zenodo. https://doi.org/10.5281/zenodo.15736387
Submission by AEIDL to the European Commission public consultation on EU’s next long-term budget (MFF) – implementing EU funding with Member States and regions. (2025) available in: Feedback from: European Association for Innovation in Local Development (AEIDL)
