Across Europe, urban shrinkage has become an important phenomenon. According to recent studies, almost 42% of all large European cities are currently shrinking, the largest number of them being situated in Eastern Europe. Across Europe, shrinkage affects all types of regions; in a way, Europe has become a shrinking continent. Shrinkage is not only a problem of larger cities, but has, in fact, become one of several pathways for European urban and rural development. Given the context that the European Commission’s ambition is to create prosperous, attractive and sustainable cities, they are expected to create equilibrium between population and employment opportunities, provide clean, safe, sustainable environments and avoid social exclusion. Set against this background, the commentary discusses the challenge that urban shrinkage brings about for European policymaking. It addresses especially issues of urban governance and planning. It draws on recent research on shrinking cities across the European territory. It argues that, on the European level, knowledge about shrinking cities is required; hence, the European Commission should encourage networks of researchers and support mutual exchange between research and urban practice. It argues, too, that there is a great deal of expertise available in some European cities about how to cope with shrinkage and there are other places, throughout Europe, that are in urgent need of this expertise. It finally advocates a stronger voice for the vision of the sustainable, shrinking or shrunk city as a priority of current and future urban policy of the EU.