Recommendation 82 (2000)1 on the situation of local democracy in “the former Yugoslav Republic of Macedonia”

The Congress,

Bearing in mind the proposal of the Chamber of Local Authorities;

1. Bearing in mind the decision taken on 2 November 1998 by the Bureau of the Congress to invite Jean-Claude Frécon, France, to prepare a report on the state of local democracy in “the former Yugoslav Republic of Macedonia”2, further to his report on the case of the imprisoned mayors of Tetovo and Gostivar3;

2. Recalling Resolution 31 (1996) on monitoring of the honouring of commitments entered into by member states and Macedonia’s ratification in 1997, without reservations, of the European Charter of Local Self-Government;

3. Recalling the monitoring report of the Parliamentary Assembly, and in particular paragraphs 91 to 98, and Recommendation 1453 (2000) and Resolution 1213 (2000) (in particular paragraphs 13.viii and 13.ix) adopted on 5 April 2000;

Considering the work carried out in the joint meetings of the working groups on the situation of local democracy in member states and regionalisation in Europe;

Wishing to express its gratitude to the Macedonian government, in particular the Ministry of Justice, the Ministry of Local Self-Government, the Ministry of Finance, the Association of Local Self-Government Units (ZELS) and local elected representatives for their input to the report on the state of local democracy;

Thanking, in addition, the delegation of the European Union and the Phare Programme, the OSCE Mission, Mr Vladimir Ristovski, Director of the Council of Europe’s Information and Documentation Centre in Skopje and Ms Mirjana Lozanoska, Delegate of the Ohrid Local Democracy Agency for their fruitful co-operation;

7. Stressing that « the former Yugoslav Republic of Macedonia » became independent only recently and that it has a multiethnic population;

8. Recalling the difficult geopolitical situation in Macedonia in the political context of south-east Europe weakened by the Kosovo conflict;

9. Recognising the considerable efforts exerted by this country to accept 360,000 refugees in 1999 and to further the peaceful co-existence of its communities;

10. Stressing in particular the major role of the local authorities in the day-to-day management of the reception of these refugees;

11. Fully aware that any government would have been hard put to manage the economic, social, legislative and community problems in the country;

12. Acknowledging the major efforts of the Macedonian government, particularly the Ministries of Justice and Local Self-Government, to embark upon a series of reforms, including with regard to public administration;

Welcoming the setting up of a Ministry of Local Self-Government in December 1998, the drafting of an “Action Plan” followed by a “Strategy for the reform of the local self-government system in Macedonia”, adopted in November 1999;

Noting, however, that the various ministries do not always work in a co-ordinated manner, which could hamper the reform process;

15. Welcoming Macedonia’s ratification, without reservations, of the European Charter of Local Self-Government on 6 June 1997, but regretting the fact that it has not yet been appropriately implemented;

16. Recalling the 1996 structural reform which increased the number of municipalities from 34 to 124 without however providing the new municipalities with adequate resources with which to operate. Furthermore, the transfers from the former municipalities to the new municipalities were not made as ideally they should have been;

17. Recalling the difficult relations with its neighbours when the country first came into existence, and noting with satisfaction the significant improvement in relations with the majority of these neighbouring countries, in particular through the development of transfrontier co-operation and the Macedonian government’s intention to sign the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities and its protocols;

18. Regretting the numerous impasses in Macedonian society deriving in part from its extreme bi-polarisation, aggravated by the almost total absence of a permanent and professional public service;

19. Stressing that all constituent elements of the country – government, associations of local authorities, local elected representatives, political parties, civil society – must work together to overcome these obstacles and embark upon a genuine process of modernisation;

20. Noting that « the former Yugoslav Republic of Macedonia » has embarked upon a difficult process of transition towards a market economy entailing the introduction of value-added tax which is encountering numerous difficulties;

21. Stressing the priority placed, prior to 1990, on self-management of the local administrative units and citizen participation in the management of local affairs;

Noting that while the 1995 Local Self-Government Act assigned 32 powers to local authorities and can be regarded as conforming to the European Charter of Local Self-Government, it has been implemented only partially and local authorities have, in practice, been deprived of a large proportion of their attributions. This would also appear to be in contradiction with Article 112 of the Constitution and, as such, incompatible with the commitments entered into by « the former Yugoslav Republic of Macedonia » upon accession to the European Charter of Local Self-Government;

Notes, from Jean-Claude Frécon’s report, that local authorities enjoy in practice neither local self-government nor financial autonomy;

Proposes that a substantial proportion of attributions be transferred to Macedonian local authorities, accompanied by a proportionate transfer of financial resources, in a way which offers firm guarantees of the impartiality and transparency of procedures;

Takes note of the transmission of a preliminary draft law on local self-government and a preliminary draft law on local finances, as forwarded recently by the Ministry of Local Self-Government , and welcomes the spirit of reform existing within this Ministry, whilst at the same time reserving judgement on the content of these draft laws;

With regard to the attributions of local authorities

Regretting the fact that local authorities have only minor competences of limited scope and are unable to manage a substantial share of local affairs within the meaning of Article 3 of the European Charter of Local Self-Government;

Convinced that a large part of the powers exercised by central government should be transferred to local authorities and managed in accordance with the principle of subsidiarity, that these transfers should in particular relate to the fields of action assigned to municipalities by the Constitution; that the powers given to local authorities should, in principle, be full and exclusive as stated in Article 4.4 of the European Charter of Local Self-Government;

Believing that the principle of devolution could also encourage the government to delegate certain powers to municipalities;

29. Recalling the necessity to engage in a clear division of powers between the various decision-making levels, including between Skopje City Council and the seven municipalities which constitute the city;

30. Stressing the need to provide an appropriate legal framework offering guarantees of impartiality and transparency;

31. Recalling the difficulties encountered in the administration of the municipalities of Tetovo and Gostivar following the application of Section 75 of the Local Self-Government Act concerning the dissolution, under certain circumstances, of municipal councils;

Recommends that the Macedonian authorities:

- transfer a substantial proportion of powers to local authorities concerning, in particular, the following fields:

urban planning and development, including the designation of new developmetn areas;

cultural, sports and recreational activities at local level, together with the corresponding amenities and infrastructure;

social action and social assistance, in particular with regard to public health, the protection of children, single women and the elderly (crèches, nurseries, community clinics, retirement homes, etc);

primary and pre-school education;

local public services (public areas, water, sanitation, refuse, etc);

local infrastructures (roads of local importance, etc);

in general, initiative and local development.

- amend Section 75 of the Local Self-Government Act in order to limit its scope and application;

With regard to local finances

33. Notes that the budget for local authorities currently represents only 1% of public expenditure in Macedonia;

34. Considering that the capping of local authority budgets (receipts and expenditure) via an annual law is contrary to the exercise of financial autonomy within the meaning of Article 9 of the European Charter of Local Self-Government;

35. Believing that the redistribution of surplus receipts collected in local authorities in excess of the maximum amount laid down is not based on objective criteria;

Bearing in mind the public expenditure limitation constraints imposed by international financial organisations;

Noting with concern that the tax authorities do not appear able to recover a reasonable proportion of taxes and dues (occasionally only 20%);

38. Stressing, nevertheless, that the transfer of resources and staff assigned to the attributions currently carried out by central government does not entail an increase in public expenditure but a different allocation of resources between central government and local authorities;

39. Believing that the planned very modest increase in central government resources allocated to local authorities does not in any way correspond to the needs of local authorities and will not lead to genuine devolution which is nevertheless a feature of the Strategy adopted in November 1999 by the Minister for Local Self-Government;

40. Considering the fragmentation and lack of transparency in the budgets of local authorities, which do not include the operational profits of public corporations, grants awarded from various special funds and the gathering of certain local taxes (property/services tax);

41. Recommends that the Macedonian authorities, in accordance with the principles of the European Charter of Local Self-Government:

a) abolish the application of a ceiling to local authorities’ receipts;

b) transfer budgetary resources commensurate with the transfer of attributions;

c) set up a joint control authority (central government/local authorities) to define the criteria for the redistribution of central government resources;

d) manage public expenditure by involving local authorities in the process while preserving the principle of state regulation of the national economy, for example by setting up a consultation body between central government and local authorities;

e) introduce a system of financial equalisation by, for example, redistributing a percentage of the value-added tax in accordance with a limited number of criteria, including the number of inhabitants;

f) ensure that local authorities are provided with a significant proportion of public resources so that local self-government can be genuinely implemented;

g) ensure, accordingly, that local authorities are provided with resources of its own resources (taxes and duties) under the new Local Finances Act;

h) introduce a system ensuring that local authorities can operate in conditions commensurate with sustainable economic development;

i) regroup municipal budgets and the accounts of public corporations to ensure greater transparency in local public expenditure;

j) clarify relations between municipalities and public corporations, and/or deliberate on the desirability of privatising certain services;

introduce a more efficient system of tax collection.

42. Notes with satisfaction that the preliminary draft law forwarded by the Ministry of Local Self-Government envisages redistributing a percentage of receipts from value-added tax to the municipalities, as recommended by the Rapporteur, without however fixing the percentage level;

With regard to transfrontier co-operation

43. Recalling that the development of transfrontier co-operation presupposes that local authorities have attributions at domestic level and the resources with which to exercise them;

44. Congratulating the Macedonian government for its efforts to develop transfrontier co-operation with Albania, Bulgaria and Greece, with the participation of local authorities, as witnessed by the joint declaration adopted at the trilateral summit of the Foreign Ministers of the countries concerned in Korca on 8 March 2000;

45. Invites the Macedonian government to sign and ratify the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities and its protocols;

46. Recommends that the Macedonian authorities, in consultation with the authorities in its neighbouring countries, take all appropriate steps to facilitate border crossings and visa acquisition, particularly for the inhabitants of border regions, for example by issuing a border resident’s card or multiple-entry visas;

With regard to the territorial structures in Macedonia

47. Noting that the law on territorial structures will not be adopted before the municipal elections scheduled for November 2000 and that it will be difficult to abolish thereafter municipalities whose mayors will have only just been elected;

48. Noting that several categories of municipalities have been set up de facto (chief municipalities which emerged from the former 34 municipalities, newly created municipalities, new municipalities assuming greater powers when they are able to do so);

49. Drawing attention to the need to stabilise the country’s administrative structure and the potential inherent risks in the adoption of further reform to territorial structures;

50. Aware, nevertheless, of the dysfunctions resulting from the creation of new municipalities having very inadequate financial, human and logistic resources;

51. Having been informed of interpretation issues raised by local elected representatives with regard to the compatibility of promoting inter-municipal co-operation (Section 10.2 and 10.3 of the 1995 Local Self-Government Act) and the existence of an association of local authorities (Section 10.5);

52. Recalling Article 10 of the European Charter of Local Self-Government recognising the right of municipalities to form consortia in order to carry out tasks of common interest;

53. Sharing the desire of the Macedonian authorities to maintain the unity and integrity of the country and not to encourage the process of disintegration, which would not be the case for inter-municipal co-operation projects, and recalling that it would be advisable to make it possible for new associations of local authorities to be set up – in the spirit of Article 10 of the European Charter of Local Self-Government – on bases other than ethnic, if necessary by amending the law;

54. Invites the Macedonian authorities to interpret Section 10 of the Local Self-Government Act so as to confirm the possibility of creating inter-municipal structures (eg inter-municipal consortia aimed at providing specific services to citizens) and to verify its conformity with the spirit of the European Charter of Local Self-Government to ensure that it authorises the creation of other associations of local authorities and the setting up of inter-municipal co-operation bodies, or failing that to amend the Act on this point;

55. Recommends that the Macedonian authorities encourage inter-municipal co-operation in order to provide citizens with better services and to improve the effectiveness of municipal administration, if need be by financial incentives;

Suggests that the Macedonian authorities provide for the voluntary merger of municipalities which prove not to be viable, and encourage the grouping together of neighbouring municipalities which would like to organise their public services jointly or envisage the setting up of “urban districts” around certain municipalities, particularly the former municipalities;

Considering with interest the existence of neighbourhood communities whose status and prerogatives are regulated by Chapter XII of the 1995 Local Self-Government Act which, within the local authority, have a council of elected representatives and promote participatory democracy and citizen participation in the management of local affairs;

Recalling that the Article 3 of the European Charter of Local Self-Government defines local self-government as the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population;

Recommends that the Macedonian authorities, in accordance with the principles of the European Charter of Local Self-Government:

encourage the work of neighbourhood communities and the development of participatory democracy at sub-municipal level, by implementing the provisions stipulated in the Act currently in force;

ensure that the privatisation process provides local authorities with real estate corresponding to their own needs and enabling them to influence the development of town planning and the economy; in particular, there is a need to amend the system of central government authorisation and approval concerning the adoption of town planning schemes insofar as such a system runs counter to Article 8 of the Charter with regard to the administrative supervision of local authorities’ acts;

With regard to local elected representatives and local authority staff

60. Stressing that any transfer of powers must be accompanied by a transfer of financial resources and qualified staff, in accordance with Article 6.2 of the European Charter of Local Self-Government; in particular, the staff attached to the regional offices of the government could be reassigned to the local authorities;

61. Recommend that the Macedonian authorities

a. draw up conditions of service for the staff of local authorities complying with Article 6 of the Charter, guaranteeing the existence of a neutral, stable and competent municipal staff;

b. amend Section 54 of the Local Self-Government Act and abolish the spoils-system-based method of recruitment;

c. set up a training facility for local authority managers and local elected representatives;

d. draw up a statute for local elected representatives ensuring, in particular, in accordance with Article 7 of the European Charter of Local Self-Government, protection for elected representatives in the exercise of their duties and setting out levels of remuneration and emoluments in an allowances table, having regard to the size of the municipality and the responsibilities assumed by the elected representatives;

With regard to civil society

62. Noting that the media can usefully contribute to creating a climate conducive to the reform process and that they should play this role to the full;

63. Welcoming the initiatives taken by the Ohrid Local Democracy Agency since 1997 to promote and develop local democracy and inter-community dialogue, thanks in particular to the contribution of the Council of Europe’s Confidence-Building Measures programme, while deploring this agency’s lack of financial resources;

64. Believes that the Association of Local Self-Government Units should become a genuine speaking-partner of the government, submit working proposals and defend the interests of local authorities, irrespective of the political beliefs or ethnic origin of the local elected representatives;

65. Encourages the Ministry of Local Self-Government to build on its action by initiating an appropriate communication policy and a policy of dialogue with the Association of Local Self-Government Units and with citizens;

66. Noting with regret that there are no women among the 124 mayors in Macedonia, thereby making it very difficult to apply Article 2.2 of the Charter of the Congress;

67. Recommends that the Macedonian authorities encourage the participation of women in the municipal elections through appropriate measures;

68. Invites the Macedonian authorities and representatives of civil society to pursue their efforts to strengthen social cohesion and inter-community dialogue;

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69. Reasserting the urgent need for reform in the field of local self-government for the smooth running of the municipalities and the exercise of local self-government by elected representatives;

70. Recommends that the Macedonian authorities continue to co-operate with the Council of Europe and to forward draft laws of local self-government, local finances and territorial structures, so that these texts can be examined to ensure conformity with the European Charter of Local Self-Government;

71. Invites the Committee of Ministers to take account of these recommendations in assessing the honouring of commitments entered into by Macedonia and to support financially, in particular through the Stability Pact, the Congress, the Local Democracy Agency and the ADACS programme, the efforts of the Macedonian government and elected representatives to implement the principles of the European Charter of Local Self-Government and recommends in particular that the Committee of Ministers support the setting up of a training centre for local authority staff, in the context of the Stability Pact or a joint programme with the European Union.

1 Debated and approved by the Chamber of Local Authorities on 24 May 2000 and adopted by the Standing Committee of the Congress on 25 May 2000, (see doc. CPL (7) 8, draft Recommendation, presented by Mr J.-C. Frécon, Rapporteur).

2 The title “Macedonia” is later used descriptively for the convenience of the reader and without prejudice to the Congress’s position on the question of the name of the country.

3 Document CG/BUR (5) 75.