Single market - Look to the cities

The EU should rethink cohesion policy that focuses on developing remote or disadvantaged regions and target second-tier big cities that have substantial growth potential in services, argued the authors of a report from the Centre for European Reform.

All about services: John Springford, Sander Tordoir and Lucas Resende Carvalho pointed to services exports within the single market as a big growth area that’s got more potential, especially for tech or finance. However, moves to deepen the internal market also risk expanding territorial divides, they warned. Cities that excel in services – and are set for more growth – are also those that have high-skilled workers, high research investment and good transport networks.

Bridging the gap: There’s an opportunity to help smaller cities reach the big league if cohesion funds could be directed to urban areas that have struggled with deindustrialization and could work on improving what they can do in services, they said. They suggested that the EU should designate “growth city-regions” in each country, such as Cologne, Karlsruhe and Leipzig in Germany or Valencia in Spain.