To draw on the findings of the CoR study commissioned for the autumn of 2012 and to contribute to the objective adopted in the recent opinion on Multi-Level Governance: to carry out an assessment of the state of affairs with regard to regionalisation and decentralisation in the European Union, which would provide a measure of progress observed towards local and regional authorities' political, judicial and fiscal autonomy. This would be useful, in particular, as part of the Committee's commitment to monitoring subsidiarity. The last CoR opinion on the state of devolution dates back to July 2005;
To reiterate the support by the European institutions for multi-level governance (MLG) based European Union policies and to ensure that the momentum is kept;
To reaffirm CoR's commitment to continue monitoring the application of the subsidiarity principle;
To ensure that the economic crisis and austerity measures implemented throughout Europe do not create the excuse for further centralisation of power, or for the devolution of power without consequent financial resources;
To propose that the CoR regularly assess the state of affairs with regard to regionalisation and decentralisation in the European Union.
This opinion has helped steer the debate on some topical issues, including decentralisation, division of competences, fiscal decentralisation and even independence movements. The opinion has been presented by the rapporteur and the administration in various conferences to a plurality of audiences and has also been referred to in meetings. It has been one of the points of reference for the development of specialised work-streams such as local and regional finances, fiscal decentralisation, etc. It provided the political backdrop for the study on the division of powers, which looks at the articulation of competences between the national and the subnational levels across various policy areas in EU 28 and the enlargement countries. The administration launched in 2013 a study request to complement the aforementioned study with data on fiscal decentralisation. The final deliverable is expected in the 3rd quarter of 2014.
From European Commission impact report:
Commission welcomes the interest of the Committee of the Regions for its analysis on fiscal decentralisation at national level published in the Public Finance Report 2012. It also broadly agrees on its main messages, as recalled in the Committee's opinion, i.e. that decentralisation of spending functions does not necessarily run against sound public finances and that incentives for fiscal discipline are strengthened if subnational governments are predominantly financed by own resources rather than transfers from the centre.
Commission calls for some caution on the interpretation of these results (and henceforth on the policy recommendations drawn from them), given the still limited availability of data, which prevents to fully capture all relevant aspects of national decentralisation arrangements, and the importance of country specificities.
In reaction to point 56 of the opinion: statement by President Barroso in early July 2013 followed by a letter of Vice-President Rehn to the EU finance ministers, according to which in the preventive arm of the SGP the Commission will consider allowing temporary deviations from the structural deficit path towards the Medium-Term Objective (MTO), or the MTO itself if already reached, to accommodate the national expenditure on projects co-funded by the EU under the Structural and Cohesion policy, Trans-European Networks (TEN) and Connecting Europe Facility (CEF) with positive, direct and verifiable long-term budgetary effect, provided that (1) the economic growth of the Member State remains negative or well below its potential; and (2) the deviation does not lead to a breach of the 3% of GDP deficit ceiling, and the public debt rule is respected.
This application of the provisions of the SGP concerning temporary deviations from the MTO or the adjustment path towards it is related to the current economic conditions of large negative output gap. Once these temporary conditions are no longer in place, any deviation as the above will have to be compensated. Anyway, similarly to all other elements of the EU fiscal framework, it is for the Member State to decide on articulation between the central, regional and local subsector of government.
Decentralisation of public management clearly has the potential to bring development and delivery of public policies closer to citizens, and to foster local democracy.
More and better local stakeholder participation is clearly an important aspect of achieving better governance and should thus be fostered - also in the context of the European Structural and Investment Funds (ESIF).
Commission does not share the assessment that centralised Member States are not executing the funds as well as decentralised ones.
The Commission is ready to work with the Committee of the Regions to help develop some possible orientation in this regard, drawing on the Committee's experience in this field and in full respect of MS competences.
However, issues related to sub-national public finance are also regularly discussed between the Commission and the Member States in relevant Committee formations (e.g. Economic Policy Committee peer review on coordination arrangements across levels of government).
THE COMMITTEE OF THE REGIONS
- understands devolution to mean all measures at political level that strengthen the role of sub-national authorities in the national and European decision-making process and that lead to powers being transferred from the central government level to local and regional institutions;
- is convinced that functioning local and regional administrations and effective devolution should be based on the principles of subsidiarity, proportionality and multilevel governance;
- is convinced that the political and legal principle of subsidiarity is a key driver of devolution, since it leads to power being located at the level at which they can be most efficiently exercised;
- sees that the economic and financial crisis has proved to be a catalyst for reform and change, with local authorities in some countries having faced a local restructuring process and institutional power structures also having changed considerably;
- points out that a coherent process of devolution can only succeed if the transfer of powers to sub-national authorities is matched by a corresponding allocation of financial resources;
- observing that regions which are primarily financed from their own resources manage the available funds in a responsible manner and therefore have solid public finances, recommends that Member States rely more strongly on own financial resources than on transfer systems;
- emphasises the positive connection between devolution on the one hand and successful, sustainable European regional policy on the other;
- insists that discussions on the future of Europe should include the regional and local levels, since the legitimacy of the EU depends in part on the legitimacy of LRA;
- recommends that all levels of government work together to achieve a lasting solution to the European sovereign debt crisis and calls for the involvement of local and regional authorities on equal terms in drawing up European and national reform plans;