Missed opportunity: structural barriers to inclusion in EU Community-Led Local Development

European cities are still entrenched in social inequalities, exacerbated by the aftermath of the 2008 financial crisis and compounding austerity measures, the COVID-19 pandemic, and the ongoing Russia–Ukraine war. To mitigate inequalities, the European Union (EU) has promoted multilevel governance mechanisms, in particular Community-Led Local Development (CLLD), in order to empower local actors and foster inclusive growth. However, structural barriers continue to obstruct access to EU funds for the most marginalised communities. This article critically examines how urban development policies, shaped by neoliberal logics and the economisation of governance, have come to prioritise market efficiency over democratic participation and social equity. Drawing on qualitative research from seven European cities, we analyse how excessive bureaucracy, short-term project cycles, and the lack of genuine co-production systematically exclude grassroots actors and reinforce inequality. Our findings show that, despite an inclusive discourse, funding frameworks often privilege resource-rich organisations while further marginalising those most in need. We argue that these limitations are not incidental, but symptomatic of deeper governance structures that prioritise rapid, quantifiable outcomes over long-term, transformative social change. The paper calls for a recalibration of EU urban policy: one that centres co-creation, redistributes decision-making power, and meaningfully integrates community voices. Without such a shift, EU Cohesion Policy risks perpetuating the very exclusions it aims to resolve.