This book is a result of the programme "Building Administrative Capacity in the Danube Region and Western Balkans (BACID)". BACID aimed at strengthening the governance structures in the Western Balkan and the Republic of Moldova with focus on local governments and European integration. It has been supported by the Austrian Development Agency and implemented by the Austrian Association of Cities and Towns (AACT) and the KDZ Centre for Public Administration Research. In the first chapter we asked municipal practitioners from the European Union to present their experiences with the impact of the European Union on local governments such as: • Subsidiarity in the European Union; • Financing municipalities including public investments and the fiscal compact; • Public-private partnerships including public procurement; • The EU Urban Agenda and regional policy; • Water sector and trade agreements; • Experiences with programming EU-funds. The second chapter focuses on the European integration activities of the local government associations in the candidate and potential candidate countries of the Western Balkan: • The role of local government associations (LGA) in the EU negotiation process; • Activities of the LGAs in Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia including the cooperation with CEMR (Council of European Municipalities and Regions) • EU funds supporting the pre-accession phase; • NALAS position on EU enlargement; • Challenges of fiscal decentralisation in South East Europe.