The European Council on 30 January made it very clear: to reboot Europe’s economies, we need not only discipline but also growth. We need to tackle youth unemployment and to give all the support we can to small businesses. 

Cohesion policy has to be at the heart of efforts on both fronts. But success depends on harnessing the economic potential of cities, since they are engines of the European economy and home to nearly 70% of the EU’s inhabitants.

That is why cities have been given a special place in the reforms of cohesion policy proposed by the European Commission and currently under discussion by the member states and European Parliament. And that is why representatives of many cities – many of them members of the Eurocities network – will meet in Brussels on 16 February to discuss priorities at the first Urban Forum organised by the Commission.

Last year, the Commission consulted urban experts on how our cities can play their part in keeping Europe competitive. The conclusions were clear. Because cities are places in which diverse people and activities are concentrated, intelligently co-ordinated development policies can have a tremendous impact. But concentration and diversity can, if left unmanaged, lead to problems of segregation, poverty, high carbon emissions and, ultimately, economic stagnation.

The following can help us get the greatest return on (currently limited) public investment. Firstly, cities should be recognised as important partners and should be given a greater role in policymaking. Their knowledge of their own local economy, needs and opportunities is invaluable when deciding how to make funds bring results and stretch as far as possible.

Secondly, investments in cities should be designed to deliver a single set of strategic objectives. That may necessitate the creation of new governance or co-operation structures that cross administrative boundaries.

Thirdly, cities should be given an incentive to keep innovating. As centres of economic activity and markets, cities offer a critical mass and are ‘living laboratories’ for market, public and social innovations that address real challenges, whether they be economic, social or environmental (or, indeed, all three).

Finally, the Commission has proposed that in the 2014-20 funding period at least 5% of the European Regional Development Fund should be spent on initiatives that bring together different sectors and funds in a comprehensive investment strategy run at the municipal level.

If we cannot make better use of the talent we have in our cities, we will not maintain our prosperity, nor will we be able to compete with global partners. If we cannot achieve greater energy efficiency in cities, in transport and in housing, we cannot hope to tackle climate change. And if we do not recognise the special role of cities we deny a consistent truth of European development over centuries.

If we want liveable, competitive cities, we must invest ambitiously. The return on that investment will be smarter, more sustainable and more inclusive growth that benefits everyone, not just city-dwellers.

Johannes Hahn is the European commissioner for regional policy. Frank Jensen is the president of Eurocities and the mayor of Copenhagen.