A report on the state of European cities, 2016

Prepared as a result of the cooperation between the Directorate-General for Regional and Urban Policy of the European Commission and UN-HABITAT, The State of European Cities Report, 2016 studies the cities situated in the 28 EU Member States and the countries of the European Free Trade Association. This paper outlines the most important tendencies and phenomena discussed in the Report.


The State of European Cities Report aims to promote the drafting of urban policies based on facts. In addition, it is closely related to the Urban Agenda for the EU and the UNO’s Habitat III Conference organised in 2016. This Report evaluates the economic, social and environmental processes at urban level and presents a large number of urban development projects as the cities of the community have had the opportunity to realise improvements of 100 billion euros since 2007 through the programs of the cohesion policy.

Urban Agenda for the EU: Adopted at the Informal Meeting of EU Ministers responsible for Urban Matters in June 2016, this Agenda aims to facilitate the cooperation of the European Commission, the cities and the member states in order to enhance growth, livability and innovation in the cities of the Union. Along the principles of “better regulation”, “better financing” and “better knowledge”, 2-year cooperation projects are implemented according to the Agenda in order to exploit the opportunities offered by the cities and handle the social issues.

Cities used to be deemed as sources of problems for a long time rather than opportunities. Consequently, urban policies primarily focused on the solution of issues like poverty, criminality and the decline of cities. However, by today, decision-makers and city leaders have become more and more aware of the economic, social and environmental benefits provided by the cities, so the development policies also focus on their exploitation.

The advantages and development opportunities of European cities:

  • The two sources of the growth of urban population are natural increase and immigration. It is primarily the active age group who move to cities because of education and job opportunities, while elder people (65+) move to less expensive settlements, instead of the cities. As a result, the age structure of cities is younger than the country average, and forecasts show that ageing has a much slower pace.
  • The economic strength of cities is gradually increasing. Between 2000 and 2013 the GDP growth of cities was 50% higher than the EU average. In the same period employment rose by 7%, while the EU average was declining. Higher economic performance arises from the economic advantages of cities such as innovation, specialisation and better access to the local and global markets. Not all the cities have had the opportunity to capture these advantages so far; however, if these potentials are exploited, cities will be able to create jobs and consolidate the economy of Europe.
  • Cities function as centres for innovation and education. In Europe the vast majority of higher educational institutions are located in cities, so the presence of qualified labour force generates innovation. The opposite is also true: specialisation and innovation typical of cities require highly qualified labour force, which may inspire the population to get higher qualifications. In 2010 some 40% of the European urban population aged 30-34 had a degree. By 2015 this proportion had increased to 48%.
  • Environmental burden: over the past two decades the concentration of various air-polluting gases such as sulphur dioxide, carbon monoxide or carbon dioxide has significantly decreased in the urban regions of the EU; however, many cities still suffer from air pollution exceeding the EU threshold. Cities need to realise further considerable investments in the fields of recycling solid waste and sewage treatment. Cities are important intervention areas in the fields of both the adaptation to the global climate change and the reduction of the environmental impacts evoking that. For instance, it is essential that the energy efficiency of buildings is improved for the reduction of energy consumption.

European cities in a global context

For a long time, urban comparisons within the EU were prevented by the methodological obstacle that the member countries used different city definitions. However, this barrier could be eliminated in 2011 when the degree of urbanisation was introduced, dividing the territories into 3 groups on the basis of population distribution: 1. cities, 2. towns and suburbs, and 3. rural areas. The category urban areas includes both cities and towns and suburbs.

Figure 1: Population distribution based upon the degree of urbanisation in the EU28 Member States (1961-2011)

The State of European Cities, 2016, p 37

The specification of these categories primarily needs two pieces of information: global population network and the public administrative borders of the settlements. Since the previous one was not available from a free source, the Joint Research Centre of the European Commission created one (http://ghsl.jrc.ec.europa.eu/), which is based upon two sources: the Global Settlement Layer, which examines the location of the building stock by analysing high-resolution satellite recordings, and the CIESIN world population network. The population network was established on the basis of the census statistics of certain states that keep a record of the households, that is: how many people live in certain places. With this information, the surface was studied by the square kilometre on the basis of the density standard. Each local government was categorised according to the category dominating in the settlement.

As compared to the earlier statements, this investigation procedure revealed that Europe is highly urbanised (72%) and lags behind the global population, as 85% of the population lives in urban regions at the world level. This method shows entirely different data for both Africa and Asia than the studies of the UNO. According to the World Urbanization Prospects (WUP), the rate of urbanisation in these continents is far below 50%; however, the EU procedure shows that urbanisation rates 81% in Africa and 89% in Asia. Concerning Asia and Africa, other studies also draw the conclusion (World Bank 2009: economic geography, Washington DC) that they are more urbanised than the UNO indicates that.

Figure 2: Distribution of population based on the degree of urbanisation by the region, 2015

The State of European Cities, 2016, p 27

At the same time, the study highlights that in certain cases the data should be handled with reservations since for some countries the information concerning the population is only available in regional breakdown, so it is distorted. Therefore, this method is promising but needs further development.

Concerning the characteristic features of European cities, the report concludes that the cities of the old continent differ from the urban settlements located in other parts of the world based upon their features. The proportion of the urban population within the total population has hardly changed over the past fifty years and is of lower level than the global average.

Most European cities are middle-sized settlements (with 250 000 – 5 million inhabitants) and there are only some cities with a population over a million in this continent. There are 79 cities with a population over 5 million all over the world, 4 of which are located in Europe. Only 16% of the European urban population lives in cities of such size, while this rate is 28 in North America and 30% in Asia. As for cities with 10 million inhabitants, there are only 2 in Europe: Moscow and Istanbul. Together with the agglomeration, Paris and London also belong to this category.

Figure 3: Cities in the world by the number of inhabitants, 2015

The State of European Cities, 2016, p 31

European cities have a lower density of population (3000 people/km2) than the Asian and African ones (6,000 people/km2) but this figure is twice as high as in North America (1,600 people/km2). For example, the European value is ideal for the efficient arrangement of public transport – with a lower limit of 3,000 people/km2 –, while in the spread cities of America the low density of population is a challenge in this respect Unlike the overcrowded cities of Africa and Asia, European cities offer more pleasant living environment.

Apart from this, the European cities are also located closer to each other than in other parts of the world, but the nearest metropolises are situated much farther. This is due to the dense network of medium-sized towns in the continent, which cluster around metropolises to a smaller extent.

Demographic tendencies

Between 2002 and 2012 the population of the EU 28 increased by 3%. In the capital cities this proportion totalled more than double, i.e. 7%, while in urban regions excluding the capital cities this figure was 4%. The changes in the number of the EU’s population were more affected by migration (2.5%) than the natural increase (0.7%); however, in the capital cities of the EU 15 the situation is right the opposite since natural increase (4.9%) contributed to the increase in the number of population to a larger extent than migration (3.4%).

Although ageing is a challenge in all the EU Member States, cities primarily attract the active aged population owing to their favourable endowments such as the concentration of jobs, higher-level education, etc.; therefore, their age structure is slightly more youthful than that of the rural regions. In capital cities the proportion of people aged 20-65 is 62%, in other cities this rate is 61%, and in areas outside cities 60%. The high proportion of this age group may exert a positive effect on the economy as more people may be at the labour market.

The younger age structure can also be seen in the lower proportion of the population over 65. In 2015 the proportion of citizens over 65 totalled 19%, while this age groups accounts for only 16% of the population of capital cities in the European Union. By 2025 the proportion of people aged over 65 within the total (EU) population is expected to increase by 3 percentage points. This growth will differ region by region: in rural regions the growth will total 4, in the urban regions 3, and in the capital cities 2 percentage points. Thanks to this, the territorial distribution of the age group over 65 will vary even more among these three regions.

Despite the lower proportion of the older generation, cities should pay attention to provide? an appropriate environment to them. They can do this by making public areas, public transport systems and public buildings accessible for movement-impaired people.

Urban economy

Based upon the studies, this Report drew the conclusion that cities, especially the larger ones and the capital cities,

  • attract citizens having higher qualifications,
  • are more productive, and
  • are more innovative settlements at the same time.

In the following we discuss these points in more detail. In cities the higher proportion of people having a college or university degree has several reasons. First, cities offer jobs requiring higher qualifications in the highest concentration, which might be taken by highly qualified labour force arriving from various parts of the country. Second, the urban location of universities also enables the local inhabitants to obtain a degree and find appropriate jobs within the city. Consequently, while one in every three inhabitant of the EU between the ages of 25 and 64 has a college or university degree, this rate is 32% in the cities and agglomerations and 41% in the capital cities.

Beyond the higher proportion of people having a degree, numerous factors play an important role in urban productivity, including the quality of human capital, business environment and institutions, market accessibility, the availability of capital, R&D. Due to tore favourable endowments  cities are not exclusive but frequent sites of innovation. It is clearly shown in the number of patents per capita.

Thanks to the high number of citizens, firms and business companies operating in urban regions are more likely to find workforce fitting their demands. The opposite is also true: local inhabitants are more likely to find a job fitting their qualifications than those living in small settlements. The closeness of the labour force and the economic entities allows for cooperation and learning from each other. They collectively are called agglomeration benefits.

As a result of the above, 68% of the EU’s GDP is produced by cities, while 62% of workplaces and 59% of the total population is concentrated in these regions.

Figure 4: GDP per capita (PPS) by the urban region, 2013

The State of European Cities, 2016, p 77

However, cities cannot be deemed as homogenous conurbations. Their indexes may vary significantly, which can also affect the fundamental operational mechanisms, economic and social tendencies. The study finds out that cities with a low income lose young and highly-qualified people as they move into cities having a higher income. This may considerably reduce the number of active aged population in the long term, which may affect the local economy negatively. As a push factor, the unfavourable economic environment increasingly makes the more highly qualified and younger population leave the settlement.

If we want the cities with a low income to avoid this trap, we should make every effort so that they can become cities of a medium income. These settlements should improve the standard of the institutions and the business environment, the infrastructure, and through high-quality education they should create innovative and highly qualified labour force in order to attract activities producing a higher added value.

Therefore, urban development policies should be differentiated, adapting to the local endowments and challenges, as they are parts of a dynamic and constantly changing process in which they have to face challenges and opportunities resulting from their role in the economic labour share.

Urban environment and climate change

In cities the concentration of people and various activities causes a considerable degree of pollution (water, soil, air, etc.) locally. What is even more, in European cities these issues are present not only locally but we can also talk about global dangers. Still, it is just concentration that can help us mitigate the negative environmental impacts.

Within the EU the issue of water pollution was handled; however, air pollution is still a severe risk for both the population and the environment. In Europe the main sources of air pollution include road transport, shipping, energy production, industrial activity, heating, agriculture and waste. In 2013 road transport was the highest nitrogen oxide emitter, accounting for 46% of the EU emission. It also significantly contributed to the emission of particulate matter (13-15%).

As a result, traffic has been restricted in numerous EU cities based upon the harmful substance emission of cars. 200 cities have introduced low-emission or environmental zones, where only vehicles of low harmful substance emission can drive in, with a permission on their windscreen.

Greenhouse gas emission decreased by 24% in the Member States of the EU28 between 1990 and 2014. Although this tendency seems to be promising, there is still much to do to achieve the ambitious objective for 2050: to reduce the GHGE by 80-95%.

In many cases pollutions the public administrative borders, restricting the role of local actions in the reduction of harmful substance concentration. Consequently, more and more coordinated collaboration is required among the local, regional, national and supranational actors in order to handle the problems.

In 2015 in Paris the 21st yearly session (COP 21) of the Nations Framework Convention on Climate Change (UNFCCC) pointed out that the degree of global warming should be kept within 1.5°C. However, it cannot be realised without focused actions. In this task cities have to play a central role. Therefore, more than 400 mayors attended the conference – at the Climate Summit of Local and Regional Leaders– in order to consult on achieving the target values. This meeting is of historic importance since before the conference cities were regarded as great polluting factors in the context of environmental protection. However, at the conference the active involvement of city leaders suggested that cities are also global problem solvers.

So far we have examined the environmental impact of cities from the output side; however, a considerable effect is exerted in the field of consumption (input), too. In order to enhance the efficiency of energy and water consumption in the cities, the renovation of the buildings is essential. However, the different studies have found that despite the financial supports and incitements the necessary transformations are proceeding slowly. This can be due to several factors, including the following: the affected parties have no sufficient information about the available financial constructions, the cost of the reconstruction, or in the case of lessees the fact that the expenses of the renovation should be borne by the lessor while the advantages such as the cheaper bills are enjoyed by the lessees. The Report also gives account of positive developments since in numerous European cities like Vilnius or Sofia the energy efficiency improvements make good headway, particularly in the social housing sector, where the investments reduce energy poverty and vulnerability among the relevant population.

Besides the state of infrastructure, another important component of energy consumption is the customs of the population. In this context, various awareness-raising campaigns play an important role, inspiring people to reduce consumption – for instance, to use the air-conditioning less in the summer. We can find examples for such campaigns all over Europe, including Austria (Klimaactiv), France (j’éco-rénove, j’économise), Finland (Motiva platform) and Latvia (Let’s live warmer).

To counterbalance the impacts of the climate change, the improvement of the green and blue infrastructure is becoming more and more common – although there are considerable differences among the cities of the EU Member States. The previous group includes among others the building of green roofs, establishment of city parks, planting of street and the preservation of forests and nature conservation territories, which – among others – reduce the air pollution and the heat island effect.

Blue infrastructure means water-related solutions such as the wetlands, brooks, lakes, digs+ and basins that may prevent flooding and support water cleaning. The document refers to Malmö as a model in this respect, with significant nature-based investments: surface rainwater system, green roofs, green walls and further green areas have been established, which cool the microclimate of the city, reduce the risk of flooding and feed the groundwater back.

This Report shows that the issue of the climate change has become one of the priorities of cities over the past years. The actual challenges and issues to be managed are wide-ranging; therefore, cities should elaborate responses in accordance with the local endowments as soon as possible.

Therefore, The State of European Cities Report provides a comprehensive picture of the tendencies affecting the cities of the old continent, of which we have only highlighted the most important ones. The knowledge of these processes can help us understand the challenges and opportunities of the cities better and elaborate more appropriate answers, i.e. form an urban life of better quality.


  • The State of European Cities 2016 – Cities leading the way to a better future. European Union, United Nations Human Settlement Programme (UN-Habitat), 2016

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