Over the last 20 years there has been a vigorous discussion of evidence related to new and more intense social and spatial divisions within European cities. These contributions have identified social and spatial polarisation associated with globalisation, deindustrialisation and the increasing income inequalities arising from these. However, various ‘moderating’ factors were identified to explain why different outcomes were emerging in European cities than in their American counterparts. In this context much of the literature has focused on types of national welfare state and as these arrangements have come under pressure across Europe it may be expected that differences from the USA may decline. However there are other literatures that, rather than emphasizing the importance of national welfare states, refer to the stronger interventionist traditions of European governments and the distinctive characteristics of European cities. Differences in these dimensions within Europe – including those related to urban planning and decommodified housing – do not correlate with typologies of national welfare states and suggest continuing divergence within Europe and between Europe and the USA. Working within this framework, this introduction to a special issue argues that although European welfare states have weakened, other factors continue to sustain differences between European and American cities.