ABSTRACT
In recent years, the European countries and their citizens have witnessed the impacts of a severe financial and socio-economic crisis, caused by the interplay of a number of international and domestic factors (e.g. Werner, 2013). Economic recession, increasing unemployment rates, welfare cuts, and socio-cultural segregation are only a few of the diverse and wide-ranging consequences faced by nation states and cities across Europe (URBACT, 2010). The weak economic climate, often compounded by institutional and political mismatches, has meanwhile proved to have considerable negative impacts, most particularly in Southern European societies, where the crisis has hit particularly hard (e.g. Aalbers, 2009; Hadjimichalis, 2011). The deep economic crisis has notably marked the end of a period of constant boom in the construction sector in many Southern European countries and cities. The increasing demand for housing, the provision of low-interest mortgages, the significant investments in major urban projects, and the extension of the welfare state have led to decades of massive urban sprawl and excessive dependence of the economy on the construction sector (Romero, Jiménez, & Villoria, 2012). This development has also been facilitated by the lack of adequate housing and social policies, as well as of complete and effective administrative control and mechanisms for coordination and territorial governance. The sudden bursting of the speculative property bubble and the ensuing cessation of large urban projects, leaving new housing developments uncompleted (mainly on the outskirts of cities), daily evictions from houses, and abandonment of offices and apartments due to the closure of enterprises and job losses, have had significant impacts on the real estate economy. The downswing has gradually spread to other sectors of the concerned national economies. This negative development has affected both the built environment in cities and the everyday life of citizens, thus revealing the first signs of a social crisis. Taking the above into consideration, it can be concluded that Southern European cities and urban regions now have to deal with serious social, economic, and spatial challenges, such as the slowdown in employment and entrepreneurial economic dynamics, the worsening of the real estate economy, the discounting of functions in the urban fabric, the occurrence of new regional disparities, including spatial selectiveness and polarisation, increased levels of poverty, and
even social unrest in certain areas (mainly in the urban peripheries). As a result, the set of tasks and functions that cities and urban regions need to fulfil increases drastically, while their political and fiscal revenue collection is curtailed or even collapsing. Facing impaired revenue collection and the need to set spending priorities, cities are challenged with regard to the provision of equal service coverage and living conditions, which inevitably affects the quality of life of their citizens. As far as the political responses to the crisis are concerned, the implementation of austerity measures and financially driven policies have been put forward. Austerity here refers to government policies that seek to reduce budget deficits, public indebtedness levels, and spending by reducing or freezing labour costs, increasing taxes, and restructuring public services and the welfare state, or by a combination of these measures (Donald et al., 2014). This has, of course, manifold impacts on local self-government budgets, such as cuts in local public spending and reductions in local investments (Nunes Silva & Bucek, 2014a). In addition, municipalities are forced to become more entrepreneurial in order to promote economic development, often leading to ‘the sale of . . . municipal assets to reduce and relieve the public indebtedness’ (Wollmann, 2014: p. 68; see also Donald et al., 2014). However, this can ‘threaten the functioning of local government, and influence the quality and scope of the local services provided’ (Nunes Silva & Bucek, 2014b: p. 182). This goes hand in hand with the fear of a widening gap between the demand for services and those offered, e.g. the provision of technical and social infrastructure, social cohesion policies, quality of life policies, which, in socio-spatial terms, can end in the emergence of uneven socio-territorial developments, resulting in the discontinuation of functions of the urban fabric and further inner segregation of the cities and their Metropolitan Areas. At the same time, decision-makers have been put under pressure to fulfil the obligations imposed by the international donor community in cutting public expenditures and reforming the public sector. This means that the public bodies responsible for urban and regional development are currently in a phase of transformation and are, first and foremost, preoccupied with restructuring their tasks and competencies. In the majority of cases, the restructuring of the cities and municipalities is accompanied by a solid guidance from the state (Crespo, 2013). The current challenge is to rescale government levels and activities as part of a constant search for temporal-spatial fixes (Jessop, 2004) and as a contribution to relieve public budgets. The significant cuts in public expenditures thus lend increasing importance to new forms of governance and collaboration, service rationalisation, and public activation (e.g. Cohen, 2011; Fujita, 2013; URBACT, 2010). In addition, the socio-economic and financial crisis has led to a strengthening of civil mistrust in public institutions and politician realms. This is mainly due to the development of semi-democratic forms of territorial governance and urban political regimes, which are often based on particularism, favouritism, and unclear relations between political and economic actors when implementing
urban policies (e.g. policies connected with specific real estate developments, large development projects, public-private partnerships). This is particularly evident in cities where these social struggles and resistance become visible and where social protests, such as the recent instances in Istanbul, Athens and Madrid, take place (e.g. Uitermark, Nicholls, & Loopmans, 2012). Drawing on the general debate outlined above and strongly linked to the most recent theoretical reflections and debates in the areas of urban politics, urban governance, and socio-economic crisis, it becomes clear that the complexity of the challenges faced by European cities and urban regions in crisis and the pressing need to master these abrupt changes call for new concepts, approaches, and solutions. These must be tailored to individual contexts and involve public, private, and civic stakeholders to enable adaptive governance, collaborative decision-making, and behavioural change towards more resilient and sustainable European cities (embedded within the built environment, the planning system, and the everyday activities of politicians, urban and regional planners, and civil society organisations). Yet, crisis events are not a new phenomenon for Europe, but have happened throughout time in various forms, scopes, and intensities. Looking back over the last decades, important structural changes, geo-political transformations, and fundamental shifts in society can be traced back. The serious impacts of those crisis events have led to complex consequences in several policy fields, both at the national and the urban level. The demographic change in many European countries, for instance, has affected the labour, capital and housing markets, the social insurance schemes for health and long-term care, the system of financing pensions, and the provision of infrastructure (Fujita, 2013). In this context, both national and local authorities in Germany, for example, have been confronted with new and various challenges – how to maintain facilities in the light of declining and structurally modified demand, how to guarantee socio-territorial equity and integration, and so on (e.g. Hamm, Seitz, & Werding, 2008; Müller, 2013). Another ‘crisis’ experienced in many European countries has been the structural and economic transformation in former industrial regions, which has also led to changes in the development trajectories of many cities. This has caused pressure on the labour market and has led to increased migration flows, processes of decline, and regional disparities, inter alia, requiring new solutions, governance mechanisms, and innovative ideas to deal with these problems. Despite the high degree of similarity in the evolution of crisis events, the recent financial and socio-economic crisis shows obvious unique characteristics related to its nature, prolonged duration, and widespread impacts. Starting as turbulence in the financial markets, it gradually evolved into a global crisis with diverse effects at the urban level. Southern European cities, which have extensively followed neoliberal policies over the last few decades and have largely focused on external financing, experienced the outburst of the crisis and the spread of its impacts particularly harshly. Austerity measures, applied in an attempt to lighten the impacts of the crisis, caused additional pressure at the local level. As a result, the current context in Southern European cities is mainly
defined by the interplay of externally imposed and internally driven policies. This raises the question of how cities can adapt to this complex situation and which new concepts, approaches, and solutions for the future sustainable development of these European cities and urban regions and the living conditions of their citizens could be envisioned.
