A few months before the EU elections, the European Committee of the Regions published its 2023 EU annual report on the state of regions and cities. Like the previous editions, the report gives an evidence-based state of play of EU territories acting as first responders to recent crises and strongholds of long-term sustainable development, cohesion and democratic stability.From the regions’ and cities’ provision of direct humanitarian relief to displaced people from Ukraine, to the innovative ways they devise to put into practice the green and digital transitions on the ground, and the value of trust in local and regional politicians, the report explores challenges, and solutions and success stories, from regions and cities in the EU. The publication also includes the results of a survey, conducted in cooperation with Ipsos, of local and regional leaders in all of the 27 EU Member States.Some of the key findings of the report are as follows.EU regions and cities are key to the successful reception and integration of Ukrainian refugees. Roughly half of the EU’s regions and cities report hosting refugees from Ukraine. The German state of North Rhine-Westphalia is the region hosting the most Ukrainian refugees, with over 220 000 displaced Ukrainians residing there, and is followed by the Polish region of Mazowieckie. The majority of regions and cities (60 %) see clear benefits – in terms of demography, attitudes and the economy, among other things – in welcoming refugees into their communities. Over 4 in 10 EU cities and regions (45 %) believe that they can contribute to Ukraine’s reconstruction in some way. The Alliance of Cities and Regions for the Reconstruction of Ukraine, set up by the CoR and many partners in June 2022, is helping to fulfil the need for subnational cooperation.The vast majority of regional and local politicians (75 %) claim that regions and cities suffer from a lack of dedicated funding mechanisms to tackle challenges to climate adaptation. Regions with a high level of employment in the agriculture or construction sectors are particularly affected, especially by longer and more intense heatwaves. The rising global temperature is also significantly disrupting the local tourism industry. Overall, Europe would need to invest EUR 40 billion per year to adapt and become resilient to an increase in temperature of 1.5°C. A lack of investment would result in growing inequalities across EU regions, which are unevenly affected by climate change.NextGenerationEU remains territorially ‘blind’. In the 2023 Regional and Local Barometer, more than 70 % of local and regional authorities stated that they had not been involved in the implementation of the Recovery and Resilience Facility, the cornerstone of the post-pandemic recovery instrument NextGenerationEU.Regions and cities have been mobilised to make the green transition work, but Europe needs to avoid a ‘green divide’. The CoR survey shows that regions and cities have taken action in particular to reduce energy consumption (62 %), to promote nature conservation and the greening of cities (40 %) and to reduce waste and its environmental impact (37 %). However, regions in Czechia, Germany, Hungary and Poland are among those that are witnessing a loss of jobs because of the shutdown of carbon-intensive industries. Supporting those regions with investments and upskilling is therefore of the utmost importance to avoid creating a ‘green divide’ in Europe. Forty-five per cent of regions and cities have set more ambitious climate neutrality targets than the EU as a whole.Around 30 million people are expected to ‘disappear’ from Europe’s rural areas between 1993 and 2033. This is the size of the population of Bulgaria, Lithuania and Romania combined. Moreover, between 2015 and 2021, the share of people aged over 65 increased by 5 % in rural areas, twice as much as in urban areas. Eight months ahead of the European elections, this worrying situation is a threat to European democracy, because those people remaining in rural areas easily feel left behind by local, national and European institutions.Trust in local and regional governments continues to grow and remains higher than trust in the national and EU levels. Since 2018, opinion polls have consistently shown that regional and local authorities are the only forms of government trusted by more than 50 % of EU respondents.The visibility of Cohesion Policy should be increased, as 33 % regional and local authorities are not aware of or benefiting from its funding opportunities. The Regional and Local Barometer confirms local leaders’ current lack of visibility and involvement in EU funding schemes. The CoR, notably through the #CohesionAlliance, leads the way to proposing a reform of Cohesion Policy that can help all places and all people in the EU.