31st Session of the Congress of Local and Regional Authorities – 19-21 October 2016
Speaking notes for Ms Luzette Kroon (The Netherlands, PPE)
Check against delivery
Local and regional democracy in Croatia
Strasbourg, 20 October 2016
Ladies and gentlemen
It is a pleasure for me to present to you today the draft recommendation and the report on local and regional democracy in Croatia, which were approved by the Monitoring Committee at its last meeting in June.
The monitoring visit to review the state of local and regional self-government in Croatia took place from 2 to 4 March this year. The delegation was composed of myself as rapporteur on local democracy and Ole HAABETH, who is no longer rapporteur on regional democracy. David MELUA accompanied the delegation as expert.
It was the third monitoring visit of the Congress to Croatia, the last having taken place in 2007 resulting in the adoption of Recommendation 226. Just 10 days after their nominations, the Minister of Public Administration and the Deputy Minister for Regional Development warmly welcomed us although, unfortunately, the Chief State Treasurer had to cancel at the last moment. Nevertheless, we were able to meet with the State Audit Office, the Deputy Ombudswoman and the Constitutional Court as well as with the Speaker of the Croatian Parliament and two permanent committee Presidents.
We also met mayors and councillors from the cities[1] of ZAGREB and RIYEKA as well as on the island of KIRK - from OMISAL municipality - and the town of KIRK. In addition, we met regional representatives from ZAGREB County and PRIMOR GORSKI KOTAR County.
I acknowledge how helpful were the Croatian Delegation to the Congress and the associations of local and regional authorities, who contributed to the organisation and smooth running of the visit.
Since the last Recommendation of the Congress in 2007, we welcome the ratification on 1st October 2008 of several articles of the Charter, making Croatia now bound by this convention in its entirety so that the Charter is fully integrated into Croatian domestic legislation pursuant to the Constitution.
We are also pleased to see:
· the introduction of direct elections for mayors and prefects
· the implementation of an equalization policy
· the adoption in September 2015 of the legislation for voluntary mergers of local government units and
· a proposed fiscal decentralisation reform as well as
· the introduction of the open data initiative incorporating inter alia the e-citizens and the e-consultations portals.
In spite of this progress, we conclude that Croatian self-government still faces challenges that are in conflict with the European Charter principles:
In particular, we noticed that functions are often imprecisely allocated between the various levels of government, as already indicated in 1998 and 2007, and their exercise is hampered by a still over-centralised state organisation.
Moreover, we have concerns about the inadequacy of resources available to local and regional authorities to exercise their powers, leading to a dependency on the state.
In the same vein, we are alarmed by the cut in local tax revenues - which provide the main source of revenue for local units - brought about by amendments to the Income Tax Act with effect from 1 January 2015, while the top rate chargeable for local surtax on income tax, a further own revenue for local units, was also reduced.
Furthermore, we regret the lack of formal consultation with local and regional representatives, also indicated in 2007, notably on financial and fiscal matters.
We are also concerned by the insufficient implementation so far of the legislation on voluntary mergers of local government units adopted by Parliament in September 2015.
Lastly, the territorial disparities remain a source of concern and the notion of a universal level of public service is still far off.
Given these findings, we recommend to the Croatian authorities:
First, to revise the breakdown of responsibilities between the central and subnational levels of government so as to avoid all overlapping of responsibilities, by establishing a clear list of the allocation of powers to the different levels of government, in consultation with those concerned, and so as to keep state intervention proportional to the interests which it is intended to protect.
Second, we recommend the Croatian authorities to draw up legislation setting out the procedures for consulting local and regional authority representatives to ensure that they are effectively consulted, that is in due time and in an appropriate manner, on all questions directly concerning those authorities, in particular on financial questions.
Furthermore, we call upon the Croatian Government to provide adequate financial resources for self-government authorities, in particular financial resources, to be commensurate with their responsibilities and which they may dispose of freely within the framework of their powers.
With respect to the reform and revision of legislation concerning fiscal decentralisation, we recommend the central authorities to reconsider the conditions governing local taxation and, in particular, the setting of tax rates by local authorities in order to give these authorities greater freedom of action with regard to their own resources and thus to move away from dependence on the state in this regard.
We further urge the Croatian authorities to re-consider the 2015 law on the voluntary merger of local government units with the aim of making voluntary mergers more attractive by disseminating information relating to the benefits of the mergers to communities, including their public services, or considering the implementation of other incentives.
Finally, we invite Croatia to sign and ratify in a near future the Additional Protocol to the Charter (CETS 207) on the right to participate in the affairs of a local authority insofar as the relevant legislative provisions in force in Croatia, as well as current practice, appear consistent with the requirements of the treaty.
In concluding I would just like to remind you that monitoring provides a snapshot of the moment of a visit so that a country’s compatibility with the Charter is assessed in regard to the status quo that we encounter and cannot be based on laws that are in the process or planned to be enacted at a future stage.
The Croatia visit illustrates why this is the case. Our meetings with Government ministers took place within only about 10 days of their appointments when they were just getting to grips with their policies in the transition from the previous government. Just 6 months after our visit there is a new government coalition in place – admittedly with more or less the same majority as before – and the proposals that were expected to be well advanced by now must be held up.
One of those planned developments concerns decentralisation which in Croatia is still incomplete. Indeed the most recent decentralisation initiatives, and the then government’s commitments to continue reform, including on fiscal decentralisation, are evidence of an admission that more still needs to be done. The associations of local and regional authorities declare themselves ready to take real decentralised responsibilities. As we mentioned in our report, we will in any case closely follow any reforms and encourage Croatia to further pursue the legislative projects corresponding to our recommendations.
I am confident that the Croatian authorities will take it to heart to implement our recommendations and in my capacity as rapporteur I intend to pursue the political dialogue to improve the situation of local and regional democracy in the country.
This concludes my remarks on behalf of the delegation and I would like to commend the draft recommendation and the report for your approval.
Thank you very much for your attention.