13th Congress Plenary Session 30 May - 1er June 2006

Prospects for regionalisation in Europe

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INFORMATION REPORT

I. Prospects for regionalisation in Europe

1. The plan to protect regional self-government through a Council of Europe legal instrument remains on the Congress’s agenda. But as no conclusion was reached on the subject at the ministerial conference in Budapest in 2005, we have entered a phase of in-depth review: What are the prospects for the Congress’s planned charter of regional self-government?

2. Although the successive failures of our plan are disappointing, withdrawing it is not a constructive solution. On the contrary, it seems that we must make use of the time remaining until the Valencia ministerial conference in autumn 2007 to focus our attention on two main points:

a. What are the reasons for our difficulty in persuading the member countries to follow us in drafting a legal instrument on regional self-government?
b. Can we devise new arguments to position ourselves more effectively in future discussions on a legal instrument with the member countries?

3. I fully realise that many countries would prefer to avoid placing the issue of regional self-government on the agenda for their discussions and would rather put forward other topics. That is why the Congress has a duty to keep the issue of regional self-government in a priority position on the political agenda.

4. Here are the conditions we must meet to do so:

II. The vitality of European regionalism is a fact

5. Regionalism and stronger regional self-government lie at the very heart of a process of political democratisation and social and economic change in most of the Council of Europe member countries. Here are a few examples:

6. Federal states have embarked on some ambitious reforms: Switzerland reorganised financial relations between the cantons and the confederation in 2005. In 2006, Germany is completely reforming the federal structure to increase the country’s political stability and international competitiveness. Belgium has initiated a major debate on the pursuit of the federalisation process (in 2004 new federal powers were transferred by law to the regions).

7. States with a high degree of devolution such as Italy and Spain are carrying out far-reaching reforms at regional level which completely alter relations between central and regional government.

8. Fairly centralised states are also carrying out major reforms. France has embarked on the implementation of a devolution programme adopted in 2003. The United Kingdom is consolidating its devolution reforms and working out the details of power-sharing between central government and Scotland and Wales. A broad debate is also under way on the future of England’s regions. Sweden and Denmark have started to rationalise their territorial units in order to make them larger and more effective.

9. Among the East European countries, the new member countries of the European Union have thoroughly reorganised their regional level of government to boost their capacity to implement the European Union’s common policies, particularly structural policy.

10. Among other member countries of the Council of Europe, organising regional government remains on the agenda. The Croatian Government has set up a committee to devise a plan for devolving powers and financial resources. Norway plans to present a white paper on power-sharing between the different levels of government in October 2006.

11. There can only be one conclusion in the light of all these developments and innovations at regional level in Europe.

12. Regionalism generally acts as a catalyst for modernising a country and amounts to a truly creative change, an issue that fuels innovative thinking and political debate. This reflects a fairly widespread will to organise government on three levels with a concern for subsidiarity, clear sharing out of responsibilities, guaranteed transparency and closeness to the individual citizen and efficient provision of basic welfare state services geared to the citizens’ needs. But it also prompts anxiety about respect for national unity among governments, which are concerned to take account of the general interest by guaranteeing territorial integrity, even when accepting a system of government on several levels.

13. Developments and initiatives aimed at reforming the regional fabric in the Council of Europe member countries are sufficiently numerous and broad in scope. They reflect the features of the member countries in terms of area and population, and affect both federal, centralised and transition states. In substantive terms, they are sufficiently innovative.

14. The Congress therefore has no doubt that the current and planned reforms at regional level in the Council of Europe member countries substantially meet the conditions laid down at the Budapest conference in February 2005.

III. Identifying and understanding objections in order to overcome them

15. So we note that major progress has been made in regionalism in Europe, but we cannot afford to wait too long for the adoption of a regional charter. The discussions held since 1997 have clearly demonstrated that there is resistance to a charter of regional self-government among the member countries.

16. The member countries can be divided into two categories in terms of their positions on the subject: those which have stated their positions clearly and explicitly – at meetings of the CDLR and at the Helsinki and Budapest conferences – and those which have remained rather discreet and have not detailed their reservations, or have expressed themselves in rather diplomatic fashion but have nevertheless supported the final resolutions of the ministerial conferences in Helsinki and Budapest.

17. However, the main reservations may be grouped as follows:

- there is clearly general opposition to the legal constraints imposed at European level, with a concern to defend national sovereignty and determine the content and extent of regional self-government. The monitoring procedure based on a legal instrument arouses misgivings.

- There are fears for national and territorial integrity if regional self-government develops too swiftly, and there is even a perceived danger of separatist tendencies. The concern to maintain national unity, territorial integrity and equality is therefore paramount. Governments quote national constitutional obstacles, which are said to restrict the scope of the concept of regional self-government.

- National governments express reservations in particular over codifying regional self-government because they are experiencing rather unsuccessful regionalisation experiments or the inadequacies of regional governments trying to exercise their functions in an efficient and economical manner.

- Central government mistrust regional governments’ capacity to handle complex issues. It seems more fashionable to seek national responses to globalisation issues than to show confidence in the effectiveness of devolution and subsidiarity.

- At national level there are also fears that a new level of government would be created and could not longer be abolished.

- Central government is planning to adopt national standards to secure the legal and economic unity of the country, and a European legal instrument on regional self-government would hamper such legislation.

- Central government wants to maintain the major strategies for economic and political development in the national interest – especially in transition countries. From this standpoint, regionalisation is intended for “later on”, as a “luxury” instrument, as it were, calling for a mature economic and political situation and civil society.

- There is also concern that national policy might be fragmented by increased competition between regional authorities, and that political cohesion might be lost.

- National governments are afraid to lose financial resources to regional authorities, or share those resources with them, especially in the case of the European funds; they are also afraid of losing their influence over the content of these programmes.

- A European legal instrument might influence current national reforms on regional government.

- National governments are reluctant to approve a binding legal instrument such as that planned by the Congress because it might be used as a reference document pursuing objectives that go beyond those adopted at national level. Some countries see a danger that the planned instrument might pave the way for a form of regional development which they are not, or at least not yet or not so soon, prepared to pursue.

- Anxiety about losing influence causes national elites and the staff of decentralised national units to oppose strengthening the authorities in charge of regional self-government.

- There is chiefly uncertainty about the financial and administrative consequences of regional reform, including the need for complete reorganisation of relations between central, regional and local government. This is a costly process which takes time and takes up much of the political community’s energy.

18. These views include many reasonable and understandable points, so it is entirely in the Congress’s interest to respect them. We can only overcome these reservations by

- presenting our arguments in favour of regionalisation and regional self-government more effectively, and

- perfecting our legal approach. We must further improve our 1997 draft regional charter. Our charter must ensure real protection of regional self-government and must respect distinctive national features as far as possible.

IV. The advantages of greater regional self-government

19. In its declaration on governance, the ministerial conference held in Budapest in 2005 clearly identified the challenges posed and the various criteria governing regional organisation:

20. But it concentrated on the consequences for local and regional authorities, and completely failed to define relations between regional and national government with the same care for the purpose of resolving the problems described. The Congress therefore wishes to broaden the ministerial conference’s approach on the basis of three elements:

a. The political arguments for reinforcing regionalism and regional self-government in a context of tension due to separatism and globalisation

21. In 2003 the former French Prime Minister Jean-Pierre Raffarin stated the main point: “central government cannot be answerable for success or failure in every area of the country”. The realisation that states are no longer all-powerful makes it easier to accept the need for power-sharing between several levels of government, all the more so because state sovereignty has been substantially restricted over the past few decades by European and international integration on the one hand and the effects of globalisation on the other.

22. Central government is therefore reacting in a reasonable and understandable fashion if it divests itself of a number of central government functions such as road networks, public health, public order, education, drainage/sewage and social welfare and devolves them to the regional (or local) authorities There are several advantages for central government in these functions being exercised at regional level:

- it points towards positive results in terms of social and economic development;
- it gradually eases the financial burden on central government;
- it increases the regions’ political and financial responsibility while genuinely alleviating that of central government.

23. Better sharing out of powers and functions between several levels of government may be the only means of preserving national unity if, on account of cultural, ethnic, linguistic, religious or other differentiating factors, adherence to the unitary state is undermined by separatist tendencies.

24. Regionalisation thus operates as a litmus test in determining whether those who demand greater regional self-government in the name of democracy are prepared to accept the same principles at national level. Concern to maintain national unity and concern to increase regional self-government are simply the two sides of the same coin: we want to organise government on different levels so that they may carry out all the policies required to safeguard the independence and security of the state, the well-being and prosperity of the population and the principles and constitutional structures on which government is based.

b. Economic and fiscal arguments in favour of regional self-government

25. Developing regional self-government is economically and financially profitable. The results of the European Union’s policy of cohesion appear to prove that the degree of regional self-government and the regions’ economic performance are interdependent. However, EU statistics do not always pinpoint the link between the degree of self-government and the level of economic prosperity. A few examples will make this argument clearer. Some regions with special self-governing status substantially exceed the national average, examples being the Åland islands in Finland, the Trentino-Alto Adige region in Italy and some areas of Scotland. This is self-evident in cases where the tax revenue of regions with a higher degree of self-government exceeds that of other types of region. The British government has opted for this approach, comparing the GDP of some regions in the United Kingdom with the performance of regions in central Europe.

26. Although we cannot yet generalise on these statistics, central government might respond to these economic findings by setting up pilot regions vested with powers designed in particular to galvanise the economy and the labour market.

c. Arguments in favour of the legal basis of regional self-government

27. The principle of democracy demands that powers and functions be shared among the different levels of government according to the subsidiarity principle. This principle is substantially recognised in the Treaty of the European Union and is therefore binding on the EU member countries. It is part of the Council of Europe’s European Charter of Local Self-Government and is therefore incorporated into domestic law through signature and ratification of the Charter.

28. But the subsidiarity principle is not simply a legal instrument. Sharing out powers and functions at the level closest to the citizens also means recognising the people’s will in matters of territorial organisation. The failure of the referendum held in England at the end of 2004 when direct elections to a regional assembly were introduced revealed two facts:

- the territorial organisation of a country must respect public opinion, and
- if regional units are to be set up, they must have clear and convincing advantages over existing local government bodies. Consequently, subsidiarity is both a legal safeguard for local authorities and a limitation on structural reform.

29. It is therefore important that the draft “Treaty Establishing a Constitution for Europe” also requires the European Union, under Article I – 5, paragraph 1, to respect local and regional self-government, which entails acceptance of the principle of regional self-government in European law.

30. The organisation of government on three levels in a spirit of respect for diversity is therefore a safeguard for Community values. It also means that regional self-government must be protected by law at both regional, national and European level.

31. Regional government is likewise legally recognised in secondary EU legislation, especially in the general provisions on the structural funds concerning complementarity and partnership.

32. Since the EU member countries recognise the principles of subsidiarity, democracy and regional self-government in the Union’s primary and secondary legislation, the Council of Europe member countries, which are also members of the EU, contradict their own previous position if they refuse to accept a legal instrument safeguarding the principle of regional self-government at the Council of Europe.

33. The development of regionalisation or broadening of regional self-government is quite apparent. In most of the Council of Europe member countries, the regions:

- enact legislation or regulations;
- exercise a growing share of public functions;
- provide a substantial proportion of public services;
- manage economic assets or immovable property on a large scale;
- expend a considerable and growing proportion of national tax revenue, and
- employ a substantial proportion of public sector staff.

34. Obviously, such a range of regional powers calls for legal institutionalisation according to the principles of democracy, the rule of law and lawfulness. The member countries’ domestic law thus includes all the legal instruments required to guarantee the lawfulness of regional government measures.

35. At the Council of Europe we must now go further:

We must co-ordinate and harmonise the existing legal rules in a binding legal instrument on regionalisation and regional self-government at European level on the basis of the common rules of local and regional democracy and the traditions rooted in particular in the 1985 Charter of Local Self-Government.

V. With discussions on the need for a charter more or less at a standstill, the Congress must make new proposals

36. We are called upon to expand on our plan for a charter of regional self-government while respecting the current state of the discussions at the Council of Europe. Our work can focus on two approaches:

a. Preparing a Congress policy statement on regionalism based on the following points:

37. The six models of regional self-government discussed at the Helsinki conference are more geared to a static analysis of the statutory frameworks governing regional self-government in the member countries. The Budapest ministerial conference broadened this outlook and placed further emphasis on the issue of “good local and regional governance”.

38. We therefore need to broaden the types of model on the basis of political and economic criteria in order to grasp the full complexity of regionalism and attempt to develop a common “philosophy” of regional government in the medium term. We can work on three forms of regional government organisation representing the realities of regional self-government in the member countries:

39. A study of the current state of regional self-government in these selected countries will serve to delineate these forms of regional government organisation more clearly.

40. Though science has little impact on central government reforms of regional self-government, “good governance” and the theory of regional taxation are of particular significance. Researchers highlight all the following points:

b. Five-point revision of the 1997 Congress charter

41. Regional authorities’ obligation to respect national unity is currently stated in the preamble to the draft charter, with a reference to loyalty and respect for the unity and integrity of the state. To upgrade this approach we can introduce it into the general provisions of a charter.

42. The 1997 draft Congress charter opted for a comprehensive approach, defining common rules irrespective of the regions’ actual status. The current discussion requires us to tackle the issue differently: over and above a common core of general rules, we must work out specific rules at least for regions in federal states and states with a high degree of devolution, in fairly centralised states and in transition countries.

43. The common core must comprise the general rules governing European regionalism and the basic principles already set out in the Congress and Helsinki conference texts. In any event, we must introduce a provision enabling regions to move from one type of self-government to another in order to safeguard the changing nature of regional self-government.

44. We could for example define the following points:

45. As some of the reservations over regional self-government stem from the central authorities’ wish to keep control of the main strategies for economic and political development, we must work out a solution to ensure procedural consistency and substantive consistency between policy decisions at national and regional level. This is particularly necessary in terms of regional authorities’ budgetary and fiscal conduct and in terms of national government, which calls for consistency between regional and national policy decisions in a few key sectors (economics, education, social affairs, health care and infrastructure).

46. The experimentation clause in Article 23 of the 1997 draft charter is probably too general. We can therefore broaden the scope and requirements for adjustments and reservations to the provisions of a charter. But we must nevertheless keep the aim of ultimately guaranteeing a certain degree of regional self-government.

47. The larger regions in federal states or states with a high degree of devolution are increasingly (re)designing the instruments enabling them to participate at European level. The member countries nevertheless have an interest in ensuring that these developments take place along similar lines. Of course, closer integration at regional level entails mutual obligations: to determine the regions’ obligation to respect state interests, account might be taken of the demands deriving, for example, from the European Union’s Stability Pact.

VI. Approaching the Council of Europe as a whole

48. So far the Congress has not exhausted its potential for co-operation with the other Council of Europe organs. We should therefore make more effort to develop a strategy for inter-institutional co-operation at the Council of Europe with a view to the adoption of a European charter of regional self-government. In particular, the Congress could step up its co-operation with the Parliamentary Assembly (the De Puig report is scheduled for the end of 2006) and also with the DCLRD.

49. We must also consult the Committee of Ministers to assess its willingness to move on from an examination of the Congress’s proposals to a truly concerted approach aimed at the joint development of a legal instrument that will be acceptable to both organs, together with a procedure ensuring the adoption of such a text after the Valencia conference.

VII. Keeping the initiative – Congress activities with a view to the Valencia conference

Taking advantage of Congress monitoring
50. We in the Congress have considerable experience in monitoring local and regional self-government, so it would be advisable to combine the experience of Congress rapporteurs who have recently prepared reports on member countries in which reforms of regional self-government are in progress.

Enlisting the regions’ support for the draft charter
51. The regions (particularly those with legislative powers) should, through the Congress members, be more active in making the necessary representations to their respective governments in favour of adopting a legal instrument on regional self-government. The Congress can hold a discussion of these steps among its members during the autumn session.

Stepping up political dialogue with national players
52. Despite the various efforts at regional lobbying made before the ministerial conferences in Helsinki and Budapest, the Congress must make use of the time remaining until the Valencia conference to conduct a series of interviews with the ministers responsible for regional self-government in the member countries.