Rapporteur
Mr Alain CHENARD (France)

INTRODUCTION

At its meeting on 25 November 1996 in Moscow, the Bureau of the Chamber of Local Authorities decided to commission a working group with preparing a report on the major problems facing local democracy and self-government in member states. The report is to be submitted to the Congress of Local and Regional Authorities of Europe at its next plenary session in Strasbourg from 3 to 5 June 1997 in order to enable it to prepare a detailed direct action programme in individual countries in which particular problems have been shown to exist with regard to the functioning of local self-government. To this end, the Working Group also proposes the adoption of a Resolution.

The report comprises two parts, as follows:

I. The implementation of the fundamental principles of local self-government: examination of the common problems encountered in the member States;

II. Analysis of the situation of local democracy in a certain number of member States in which major problems have been reported.

With regard to working methods, the Working Group, assisted by the Secretariat, sent a questionnaire to the national delegations and local authority associations in a number of member states in order to obtain up-to-date information on the situation of local democracy in their countries.
The questionnaires were adapted according to the specific problems which the Congress knew existed in certain countries.

The Working Group received a reply from the national delegations and/or associations of local authorities of the following States: Austria, Denmark, Finland, France, Latvia, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Spain, Slovenia, Switzerland, "The Former Yugoslav Republic of Macedonia". It was not possible to make contact with Moldova.

On the basis of the reports previously drawn up within the framework of the CLRAE's activities, the Working Group, with the assistance of the Secretariat, also collected further information on: Belgium, Bulgaria, Cyprus, Croatia, Denmark, France, Greece, Latvia, Lithuania, Moldova, Portugal, Slovak Republic, Switzerland, "The Former Yugoslav Republic of Macedonia" and the United Kingdom.

The information concerning Ukraine have been taken from the study by Dr Hoffschulte entitled "The situation of local democracy in Ukraine at the end of 1996". This information was completed and updated during an official visit to Kyiv by the Rapporteur from 15 to 17 April 1997. During the visit, the Rapporteur, accompanied by Mr Hoffschulte and two members of the Secretariat, met representatives of the Presidential Foundation of Local Self-Government, the ad hoc Parliamentary Commission responsible for drafting the law on local self-government, the Presidential Administration, the Association of Ukrainian Cities and the Municipality of the City of Kyiv. Given the importance of the above information, a special chapter of this report is devoted to the situation of local democracy in Ukraine.

On the basis of the information collected, a preliminary document was drawn up by the Secretariat in order to be examined at the Working Group's first meeting on 24 February 1997 in Strasbourg. The Group met for the last time in Paris on 28 April 1997 in order to adopt the draft Resolution hereby proposed to you and the present report

It is important to note that the Congress has already prepared a report on the situation of local democracy in Romania in 1995 and that during the current Session, it is foreseen that discussions be held on the specific reports on local democracy in Italy, the Russian Federation and Turkey. Furthermore, an ad hoc Working Group has recently been requested to prepare a report on local democracy in Albania. With this in mind, the situation of local democracy in the above countries is not mentioned in the present report.

PART I: THE IMPLEMENTATION OF THE FUNDAMENTAL PRINCIPLES OF LOCAL SELF-GOVERNMENT: EXAMINATION OF THE COMMON PROBLEMS ENCOUNTERED IN MEMBER STATES

I. Time to take stock: 1985/86 to 1996/97

1996 was the tenth anniversary of the entry into force of the Council of Europe's European Charter of Local Self-Government, after its ratification by the requisite number of member states. It is all the more astonishing that some of the major democracies and then member states of the Council of Europe have still not incorporated the Charter into domestic law. For example, France and Belgium signed it as long ago as 1985 but they have not yet ratified it, and the United Kingdom has not even signed.
Nevertheless, the Charter has in several respects assumed unexpected importance and become relevant to the present situation.

This applies especially to the establishment of democratic structures in the Central and Eastern European Countries (CEECs), which, during the negotiations to join the Council of Europe, undertook not only to ratify the Convention on Human Rights but also to sign and ratify within a reasonable time the European Charter of Local Self-Government. On the way to the democratisation of their countries, they have thus adopted the principle of the Charter that "The member States of the Council of Europe ... are one of the main foundations of any democratic regime" and that "the right of citizens to participate ... can be most directly exercised at local level". This was expressed most impressively by the Russian author Solzhenitsyn at the end of the 45-day journey across Russia marking his return home. He said that Russia would "not be democratic until her towns and villages are democratically run by their citizens themselves".

The ideas on local and regional self-government were strengthened Europe-wide with the introduction of the principle of subsidiarity both in Article 3 (b) of the Maastricht amendment to the Treaty of Rome and in Article B (last paragraph) of that amendment, in which it is explicitly emphasised that the aims of the European Union (EU) are to be achieved by "respecting the principle of subsidiarity". Although technically the Maastricht Treaty first of all concerns the EU's relationship with its member states, it also covers and protects the latter's internal structures and legal traditions, which are mentioned in Article F of the treaty and safeguarded in the interests of cultural diversity.

The "committee consisting of representatives of regional and local bodies" ("Committee of the Regions" for short) created by Article 198 (a) to (c) has therefore continually emphasised since 1994 that the principle of subsidiarity must also apply to the relationship between the European Union, on the one hand, and the local and regional authorities, on the other, since Union law is increasingly affecting the latter and their administrations. The same opinion was voiced by the Consultative Committee of Local and Regional Authorities, the precursor of the Committee of the Regions set up at the European Commission in 1988. Since 1992 the Commission has also reaffirmed this inclusion of the local authorities in the protection afforded by the principle of subsidiarity, but without intending to interfere with the internal structures of individual states.

It is therefore possible to perceive a strengthening of the ideas on the protection of local self-government as a result of an increase in public awareness of the significance of the principle of subsidiarity, which was already outlined in Article 4, paragraph 3, of the 1985 Charter, which states: "Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen".

We can also see an increasing tendency towards decentralisation throughout Europe, which in many countries raises the question of whether the functions delegated by central government are (only) assumed by decentralised bodies of the state administration or are assigned to autonomous bodies - i.e., local government units - by strengthening local and regional structures. In this case, one speaks of local authority control which, if it is to correspond to the principles of the European Charter of Local Self-Government, makes it necessary (also) to assign administrative, financial and human resources.

It was a long road from the unanimous resolution on the "European Charter of Municipal Freedom" adopted at the 1953 Versailles conference of the (at that time only western European) Council of European Municipalities (now the Council of European Municipalities and Regions), which was established in 1951, to the signing of the Council of Europe Charter by eleven member states in Strasbourg on 15 October 1985. In 1953, critics spoke of an "ambitious Utopia" and a "purely theoretical declaration".

These critical remarks are still being made today with regard to the demands set out in the 1985 Charter, even though much has been achieved. In 1985, 11 out of just over 20 member states signed the Charter. Today, as many as 31 out 40 member states have signed it, although only 23 have ratified it. It appears intolerable from the point of view of the Charter that nine members have not even signed.

To be sure, the extent to which the principles of the Charter have not only become constitutional law but also shape the everyday practice of the local authorities and the lives of their citizens is an entirely different question. However, at a time in which important functions and fundamental issues are increasingly being internationalised there is clearly a growing need for local and regional identification and for the participation of our fellow citizens. "Interdependence", as J. F. Kennedy put it, is also dependence, and the increasing interdependence, indeed globalisation, of our economies, job markets, environmental issues, structural policies, etc., present local government units with new challenges, but also mean new dangers for their administrations and autonomous structures.

Worldwide, the European Charter of Local Self-Government has increasingly received attention in the last few years. On other continents there is a growing awareness of the importance of citizens being able to govern themselves and of the position of local and regional authorities in the establishment of national structures and democracy. Thus, for example, the conference of the International Union of Local Authorities (IULA) held in Toronto in June 1993 issued the "IULA World Wide Declaration of Local Self-Government", in which principles of local self-government based on the 1985 European Charter were formulated.

On the initiative of the German section of the Council of European Municipalities and Regions (CEMR), which met at Fellbach in 1996, the 20th European Conference of the international CEMR unanimously passed, in May 1996 in Thessaloniki, a resolution in the form of an appeal to the United Nations HABITAT II conference (Istanbul, June 1996) demanding the "worldwide applicability of the principle of subsidiarity and a guarantee of local self-government as the basis of lasting democratic development". The aim of this initiative is to establish a UN convention to this effect. On 30/31 May 1996 the World Assembly of Cities and Local Authorities (WACLA) adopted the initiative in the run-up to the Habitat II conference and issued an appeal to the international community to draw up a worldwide charter of local self-government. To its credit, the Habitat II conference in Istanbul adopted the following statement of principle in its 15-point declaration of 14 June 1996: "Recognising local authorities as our closest and essential partners in the implementation of the Habitat Agenda, we must promote, within the legal framework of each country, decentralisation through domestic local authorities and work to strengthen their financial and institutional capacities in accordance with the conditions of countries, while ensuring transparency, accountability and responsiveness to the needs of people, which are key requirements at all levels" (item 12 of the declaration).

The Council of Europe's Charter of Local Self-Government is therefore finding imitators worldwide. It is thus all the more necessary to take stock of the development of local self-government in the present 40 member states of the Council of Europe.

II. The most important problems facing local self-government

The Secretariat of the Congress of Local and Regional Authorities of Europe sent a questionnaire to the national delegations and local authority associations in a number of member states in order to obtain up-to-date information from individual countries. Some countries were not included in this survey because a report was either being prepared with the help of a number of working groups (Albania, Italy, Russian Federation and Turkey) or had already been drafted (Romania). Some countries did not reply (Czech Republic, Germany, Iceland, Sweden and Hungary). It was not possible to establish any contact with Moldova.

From the information available a number of common problems became apparent that are to be found in several, or even all, countries, albeit with a varying degree of intensity and emphasis. These will be considered below. The specific problems of local self-government in individual member states will be dealt with in a separate section.

A.

Under Article 3 of the Charter, the local authorities should have the right to and assigned "a substantial share of public affairs". In many member states the local authorities complain that still too many functions that the local (and county) councils could carry out better and more efficiently, but especially in a manner closer to the citizen, are reserved by governments for central state administrations or their decentralised organs and local or regional offices.

This centralistic trend is encouraged, especially in the countries undergoing radical economic change, with the tremendous financial insecurity and problems that change involves, by the local authorities' reluctance to assume additional functions because they cannot tell whether the state will provide them with the funds they need.

The central governments in a number of countries object either directly or indirectly to placing functions in the hands of the local authorities by pointing out that the latter's staff are not (yet) qualified enough to take on these tasks. Here one discerns a lack of willingness to assign to the local authorities both the function and the central government staff employed to carry it out, something that is taken for granted in some countries in the context of decentralisation but cannot be implemented in others because there are either insufficient or no legal rules at all governing the status of local authority staff.

Even the presumed danger of local corruption is mentioned as an argument when objecting to decentralisation and stronger self-government. This is all the more astonishing in the case of those countries in which large-scale corruption is not only a danger but also a reality, for even someone who suggests that it cannot be eradicated will have to admit that it is much more dangerous in central government offices, in view of its consequences for the whole of the country, than the corruption that undoubtedly also occurs at local authority level, the repercussions of which are more likely to be restricted to the local area.

A further danger of centralisation arises as a result of the new technologies and modern methods of office communication: the possibility of making local data available to the central government and its officers in a few seconds will lead to a growing tendency on the part of both state administrations and political representatives or parliaments to intervene directly. The argument that efficiency is achieved by being close to local affairs and the citizens appears to have lost its validity. On the other hand, the local authority representatives rightly counter this by pointing out that the opportunities for citizen participation and self-help at the local level are wasted when decisions are taken centrally, so that the efficiency achieved is not of the same order.

B.

In many countries it is apparent that an attempt is definitely being made to bring about decentralisation but that this is not being used as a means of strengthening local self-government. On the contrary, the ability of the local authorities to act is being impeded even more by local offices of the state administration. Especially in a number of former Soviet bloc states in the process of reform, cosmetic measures are being carried out that seem to constitute a reorientation whereas in reality the old centralist forces are establishing themselves in the guise of decentralisation. In this way, state structures are being strengthened country-wide. The problem is particularly significant in those states that, instead of a second tier of local government (counties, comtés, Kreise), are provided with or establish state corporations or are even either abolishing (as in the case of Latvia) a second tier of local government that strengthens or complements the towns and villages it comprises or (as in the case of the UK) reducing its local government responsibilities.

C.

A particular phenomenon of centralisation that cannot be eradicated appears in many member states to be the continual increase in the number of rules and regulations imposed by national laws and by-laws. This phenomenon is not only a danger inherent in bureaucracy, and therefore intolerable for the citizen but limits the scope of local self-government guaranteed by Article 4 of the Charter. Instead of the deregulation being demanded everywhere, there is, even in the states endeavouring to cut bureaucracy, an unmistakable rise in the number of rules enacted, often for legitimate reasons (e.g. the protection of the environment). However, these rules nevertheless have the adverse effect of restricting the local authorities' planning powers and freedom to govern their affairs.

This presents a serious danger to local self-government. A "renunciation" of state power is therefore urgently necessary in many member states in order to prevent a further undermining of local autonomy.

D.

Undesirable developments can also be observed in the area covered by Article 6 of the Charter, which guarantees the right of local authorities to determine their own appropriate administrative structures. This principle is violated, on the one hand, by overregulation in this area by the state and, on the other hand, by the fact that, as already mentioned, when functions are assigned the appropriate administrative, financial and human resources are not always made available at the same time, or else in practice the assignment of these resources provided for by the constitution and the ordinary laws falls short of what the state actually specifies.

However, in a number of states in the process of reform there is a particularly serious tendency to attach to local government organs administrative bodies of the state, the chief officers of which are appointed by the government or the president and are (or can be) dismissed, so that they necessarily have a dual loyalty, which alternates between their responsibility towards the council elected by the people on the one hand and the state or government leaders on the other. This development (e.g. in the case of the rayony and oblasti in Ukraine) is incompatible with Article 6 of the Charter.

Local (and regional) self-government may be strengthened if additional state functions are assigned, or at least delegated, to a well-established local government structure. The interplay of these functions with the local authority's own functions can only promote the streamlining of an administration, transparency and citizen participation. However, this must not lead to the strangulation of local autonomy.

The tendency in some states to limit local self-government in the capital city is unacceptable. It is particularly the citizens of these capitals, which are in many cases the largest cities of the countries concerned, who are entitled to local self-government, with all the rights provided by the Charter. The fact that the capital city makes it necessary to take account of and meet additional government and infrastructural requirements is no justification for such restrictions. Rather, co-operation is needed, as are, in view of the additional burdens imposed, special planning instruments and finance.

E.

In some countries there has been a weakening of local self-government as a result of an imbalance between the large conurbations, on the one hand, and rural areas, on the other.

The urbanisation process that can still be seen in many countries has not only weakened the participation of citizens and their associations in the urban metropolises but led to a worsening of the situation of the rural local authorities, which are often financially, administratively and in terms of human resources unable to take account of their citizens' wishes in such a way that they can combat the trend towards migration to the urban centres. The state and its organs are too quickly inclined to pay more attention to the masses than to the large number of smaller towns and villages. They therefore also too frequently fail in their task of taking countermeasures. Moreover, a very large number of small, and therefore not very efficient, authorities appear more willing to support the centralist traditions based on the principle of "divide and rule".

In a number of countries the ability of rural areas to exercise local government functions has been systematically strengthened with some success in terms of structural policy by means of different forms of local government reorganisation, be it by creating larger units that can compete with the big cities in terms of structural development or by introducing forms of co-operation and joint planning bodies in countries where, for historical and (socio-) political reasons, it has appeared necessary to preserve the smallest local authorities. It cannot be denied that in the light of the Charter the promotion of voluntary co-operation must be given priority over compulsory reorganisation. However, the Charter also permits the latter if it is in the interests of, and ultimately serves to strengthen, local (and regional) self-government and if the views of those concerned have been heard in good time (Article 5 of the Charter, concerning the protection of local authorities' boundaries).

F.

In some places local self-government currently also faces the problem of the combining of local government mandates with state offices or functions. Thus, Article 7, paragraph 3, of the Charter states that any functions and activities deemed incompatible with the mandate of a person elected to local office may (exceptionally) be permitted by statute. However, undesirable developments can always be seen where an accumulation of offices leads to conflicts of interests, be it because the office holder faces the disagreeable situation of having to serve two masters - i.e., his or her loyalty is regularly strained - or because he or she works at various levels of government that, for example, also involve supervisory functions.

G.

In practice, disputes concerning the limits to the right of the state to supervise the local authorities' activities (Article 8 of the Charter) also arise in various countries. The supervision frequently goes beyond statutory limits and powers when, for example, the state exerts influence with regard to the substance and expediency of local government decisions by enacting financial provisions. This conflicts with the principle enshrined in paragraph 2 of Article 8 that supervision "shall normally aim only at ensuring compliance with the law and constitutional principles".

There is an obvious connection with the critical remark made above concerning the profusion of rules and regulations.. Especially where the number of rules and statutory targets to be met is constantly rising, checks on the legality of measures are sometimes tantamount to the loss of the ability to take independent decisions. Many local government office holders complain that they are increasingly being required to take decisions on issues where the "practical constraints", i.e. the targets set from outside, are so narrow that their hands are tied when making their decisions.

It is therefore not only the core area of local self-government in countries with more centralistic traditions that is affected by this problem but also in countries that have traditionally had strong local autonomy but where in the case of the most important decisions (e.g. in the area of planning and construction) the scope for weighing up the facts and exercising powers of discretion, even though formally expressly provided for, is virtually non-existent when the matter is discussed and co-ordinated (by way of anticipating the supervision) with the supervisory authorities or when the government's supervisory bodies consider the facts themselves and exercise their own discretion.

The principle of proportionality when carrying out the supervision of local authorities (Article 8, paragraph, 3 of the Charter ) often remains a lofty aim of the Charter. It appears desirable to win back the freedom lost to local autonomy in this area by paying greater attention to the principles enshrined in Article 8. This applies especially when, in addition to the legal scrutiny exercised, the influence of the state in the area of financial support is ultimately the crucial factor when deciding whether to take individual measures.

H.

Understandably, in all member states the question of the financial resources available to the local authorities is of paramount importance for the scope of local autonomy. The Charter guarantees that "Local authorities shall be entitled, within national economic policy, to adequate financial resources of their own, of which they may dispose freely within the framework of their powers".

The complaint made by the countries that are in particular financial straits as a result of structural changes is therefore all the more understandable. Here the local authorities only share the problems and lack of resources of the state as a whole. Nevertheless, one must view with concern that in the states undergoing reform the provision of funds to the local authorities is frequently a reason to impose additional restrictions on local autonomy. This may, on the one hand, be due to the fact that the modest amount available is not remitted to them as a lump sum to dispose of as they wish but linked to a specific purpose, so that even within this framework there is no scope for setting local priorities. Centralism is also perpetuated by keeping the local government budget dependent upon the decisions of the state government when it comes to the internal allocation of funds.

On the other hand, the constitutional and ordinary law too often provides for the transfer to local government bodies of functions that have hitherto been the responsibility of the state without making the funds that have been employed by the state for this purpose up to now available at the same time. The impression arises that the decentralisation or transfer of functions announced by the state, which is also in financial straits, is more to relieve it of the burdens it faces than to strengthen local autonomy.

However, this is not a specific problem of the states undergoing reform: in the western European member states, too, the complaint is often made that the state rids itself of functions to the detriment of the local authorities without ensuring they receive compensation for the additional burden. The fact that the state enacts legislation or takes decisions on the financing of local government on an annual basis also gives increasing cause for concern since the annual objective of balancing the state budget tends to raise the temptation to put the state's own finances in order at the expense of the local authorities. The secure knowledge of being able to plan for the medium term would at least be desirable in the states in which national legislation itself obliges the local authorities to organise their finances on a medium-term basis.

The arrangements concerning the local authority ownership of property are a special problem faced by all the former Communist states. Apart from the question of returning expropriated property in the Central European states, there is a lack of certainty regarding rights to the so-called "property of the people" formerly administered by the state. In most countries these assets have obviously come to be considered one of the major sources of revenue for the local authorities when they have insufficient income to meet their financial requirements from taxes raised, their share of state tax revenue and fees and levies. In view of the economic situation in the countries undergoing reform, the revenue from these assets, which the local authorities would, if possible, like to take over from the state, is an obvious substitute for other income.

Quite a number of problems arise here that do not lead one to expect that this approach will make a lasting contribution to putting local authority finances in order within the meaning of the Council of Europe Charter.

There is probably no doubt that it is right and necessary to transfer state property to the local authorities wherever these assets directly serve to fulfil public functions, i.e. especially land for roads, public buildings and gardens, etc. This so-called "fiscal property" must, of course, also be assigned to the local authorities, together with the functions concerned, when considerable expenditure is required for care and maintenance or renewal and modernisation. However, in view of the state of many facilities this is more a burden for the local authorities than a form of "enrichment".

The situation is different in the case of the frequently disputed control over "fiscal property". Here many local authorities are striving to take over assets from which they hope to receive the income in order to carry out other functions. "Property of the people" owned by the state is virtually being "decentralised" and distributed to the local authorities, but it is de facto supposed to remain the "property of the people". However, in many cases this is property that in the states based on a free or social market economy is in most cases due to be privatised, i.e. in the course of the reforms being carried out in the CEECs it will at most lead to temporary or (in the case of privatisation) once-only income. There is therefore a conflict of interests emerging here, so that long-term income cannot necessarily be expected.

The cases are particularly problematic in which the state transfers to the local authorities enterprises and industrial plants that have become uneconomic as a result of the changes in its economic structures. The local authorities, which are in any case financially weak, then face the highly intolerable situation of having to retain economically no longer viable enterprises and production plants for social reasons. This cannot be the task of the local authorities and permanently overtaxes their resources. The transfer of these plants to public ownership is at any rate a violation of the principle of financial security wherever the state does not make the necessary funds from other sources available at the same time. These enterprises have become run-down while in the hands of the state and it must not rid itself of this inherited burden to the detriment of the local authorities.

When continuing to advise the CEECs with respect to the Charter of Local Self-Government it appears appropriate to devote special attention to the question of distinguishing between the local authorities' functional and fiscal property.

I.

In a large number of countries an important task is to fulfil the local authorities' right to associate enshrined in Article 10 of the Charter. The right to form local authority associations and umbrella organisations is an important aspect of the development of local autonomy. The independence of these organisations from state influence strengthens local government. The possibility of joining international associations (Article 10, paragraph 2, of the Charter) facilitates a swift exchange of experiences and therefore, especially in the states undergoing reform, the establishment of democratic structures at local and regional level.

It can be seen in a number of countries that these organisations are only weak in their development and dependent on national parties, individual personalities or government goodwill. The fragmentation resulting from the establishment of too many organisations weakens the ability to assert one's interests. Strong umbrella organisations that can negotiate with the government would considerably speed up and strengthen the development of local autonomy.

In summary, it can be said that the 1985 European Charter of Local Self-Government has achieved far more than could be hoped at the time. Its influence on the democratic process in the new democracies of Central and Eastern European proves the value of this convention even more than the hesitant behaviour of individual old Council of Europe members with regard to signing and ratifying it. Gratifyingly, its worldwide influence is also growing in intensity. The principle of subsidiarity, the basic elements of which are formulated in the Charter, leads one to expect a much more in-depth discussion of the Charter's aims by member states and their local authorities.

On the other hand, in many states, especially those in the process of reform, the many changes and problems to be tackled make it easy to comprehend a sentence expressed by a Ukrainian representative to members of the Council of Europe delegation: "We have so many problems that the establishment of local self-government is not one of our citizens' primary concerns". And he expressly requested "help to bring about the necessary change of attitude", aware that, in comparison with a centralistic approach, it is especially the strengthening of self-government and personal responsibility that considerably increases the chances of solving the many problems faced.

Now that 31 out of 40 members have signed the Charter and most states undergoing reform have enshrined the most important of its principles in their constitutions the task remains in the coming years to contribute, by helping to bring about a change of attitude away from a centralistic approach in favour of local and regional autonomy, to ensuring that the Charter is fully observed in practice by the signatory states, thus strengthening democracy "from the grass roots upwards".

PART II: ANALYSIS OF THE SITUATION OF LOCAL DEMOCRACY IN MEMBER STATES IN WHICH MAJOR PROBLEMS HAVE BEEN REPORTED

I. The situation of local democracy in Bulgaria

As was rightly noted in the last CLRAE report on local democracy in Bulgaria, written by Mr Cuatrecasas (Spain) in July 1996, the country has already made considerable progress towards the introduction of a fully operational system of local self-government. In particular, Bulgaria ratified the European Charter of Local Self-Government on 10 May 1995, its constitution includes articles concerned with local self-government and framework legislation on local administration was approved in 1991 and amended in 1996.

In principle, therefore, Bulgaria does have the basic legislative framework for local self-government. However, it is often poorly applied and incomplete. The Bulgarian authorities should therefore undertake immediately to:

1. bridge the gap between local authorities' responsibilities and the resources at their disposal. The central authorities have extended local authorities' responsibilities without providing for the necessary finances, resulting in an imbalance between their obligations and their income.
This is a serious problem, since Bulgarian municipalities are mainly financed by central government grants and the current system penalises small authorities, which are very heavily dependent on state subsidies.
If Bulgarian local authorities' difficult financial situation is to be improved, parliament must pass legislation on their financing which gives priority to their own revenue raising powers. This is made even more necessary by the fact that local authorities have major responsibilities such as managing school buildings and hospitals.

2. implement the new property laws enacted in July 1995, in parallel with the procedures for transferring property from central to local authorities, which have already been set in motion. These laws should be applied in such a way as to give local authorities greater flexibility in managing their property holdings, which in turn could offer significant sources of income. The management of certain land holdings could enable municipalities to increase their influence on the daily lives of citizens, who might then attach greater importance to local politics. This will not, of course, be a simple task, since it will be necessary to determine to whom various properties should be transferred; however, it is absolutely necessary.
Mr Cuatrecasas' report has already referred to the need for central government to publish regulations on the implementation of the property laws.

It can be seen from the above that while the state of local democracy in Bulgaria can be deemed positive from a legislative standpoint, gaps remain to be filled. However, the need for reforms in the field of local self-government and their implementation have to be seen in the national economic and political context. Recent events do not offer any immediate grounds for believing that significant reforms are possible, given current circumstances. It is to be hoped that the reform process can be continued, despite the blockage caused by the most recent and dramatic national political developments.

The Congress should monitor these events closely so that once constructive dialogue has been re-established at the national level between the country's various representative bodies, the legislation on local self-government can be completed and implemented.

The Working Group considers that this monitoring should take the form of a detailed report, in accordance with paragraphs 8 and 11 of Congress Resolution 31 (1996).

II. The situation of local democracy in Croatia

The organs of the Council of Europe have criticised the Croatian central authorities on numerous occasions for ignoring the will of the electors by refusing to recognise the elected mayor of Zagreb after the first local elections. Democracies must be capable not only of holding free and fair elections but also of respecting the results.

It should also be noted that there are important question marks concerning the role of county governors (Zupan), who are at the same time representatives of the state and elected by the county council, and that the local administration act does not distinguish clearly between the powers of these governors, acting as decentralised state officials, and their powers as elected officials.

In addition, the election of a governor, like that of the mayor of Zagreb, has to be confirmed by the President. It is unacceptable that the legislation in question does not specify any criteria for the exercise of this power.

In response to these failings, Mr Haegi wrote to the Croatian authorities on 9 January expressing the Bureau's concern about the lack of information on the revision of the legislation on local public administration, particularly the provisions authorising the President of the Republic to confirm the election of county governors and the mayor of Zagreb.

It should be emphasised that the Croatian authorities had undertaken to consult Council of Europe experts on the changes to the legislation in question. In view of the fact that local elections were scheduled for April of this year, the Bureau informed the Croatian authorities that there was an urgent need to amend the relevant legislation to ensure that there was no risk that the newly elected county governors and mayor of Zagreb would not be confirmed.

The Bureau of the Congress therefore recommended that the Croatian authorities introduce the proposed amendments before the elections (which took place on 13 April) and after consulting Council of Europe experts.

The Croatian authorities replied to the President of the Congress that the Croatian parliament had passed legislation on the geographical division of municipalities, counties and cities and that under this legislation the city of Zagreb would henceforth be separated from its surrounding municipalities, which would in future form a county, while the city of Zagreb would have a special status. However, it appeared that the mayor of Zagreb's dual role as an elected member and a government representative had not been altered and nor had the President's power to decide whether or not he should be confirmed in post.

In the absence, for the time being, of any proposals to revise the legislation on local public administration, the Croatian authorities have stated that they are unable to consult Council of Europe experts.

They have also informed Mr Haegi that in the coming months a government committee will make proposals concerning the revision of any legislation, including the legislation on local public administration, which is not compatible with European conventions signed by Croatia on her accession to the Council of Europe or which she has undertaken to sign.

In this connection, it should be borne in mind that under the terms of paragraph 9.vi of Opinion no. 195 (1996) of the Parliamentary Assembly on Croatia's request for membership of the Council of Europe, Croatia had undertaken to sign and ratify the European Charter of Local Self-Government in the year following its accession (6 November 1996). In view of what has been said, it is to be hoped that as soon as the aforementioned government committee comes into being, it will initiate the procedure for ratifying the Charter, in order to comply with the timetable agreed in the above undertaking.

Your rapporteur therefore proposes that the Resolution of which this rapport forms an explanatory memorandum should reiterate the concerns of the Congress that, despite its recommendations, the Croatian parliament has not yet amended the legislation on local public administration to abolish the President's discretionary power to decide whether of not to confirm the election of county governors and the mayor of Zagreb and considers that the only options are to:

i. specify the criteria which alone can justify the Head of State's refusal to recognise the election of the mayor of Zagreb and of county governors (Zupan); or

ii. distinguish between the functions of the mayor of Zagreb and county governors as local authority representatives and those conferred on them as state representatives in Zagreb and the counties.

Finally, following the Congress's observation of the local and regional elections in Croatia on 13 April, which included Eastern Slavonia, for which a special report has been prepared, I would like to point out that in general they were conducted fairly, but that the Congress delegation did identify several specific problems.

In particular, results were not published by polling station, which meant that citizens were unable to exercise their right to check them or appeal against them, the name of the Head of State appeared at the head of the list in several constituencies, which was not consistent with the principle of the separation of powers and the political independence of local authorities, and in Eastern Slavonia the absence of the necessary facilities meant that several citizens were unable to vote, despite the extension of voting by one day, which constituted a violation of the constitution.

Having regard to these considerations and to the significance of the Croatian authorities' undertakings in the field of local democracy, the Working Group considers it appropriate to initiate a frank and constructive dialogue with these authorities on the basis of a detailed report on the state of local and regional democracy in Croatia. The report must be drawn up in accordance with paragraphs 8 and 11 of Congress Resolution 31 (1996).

III. The situation of local democracy in Latvia

Between 1989, the year of the first local elections, and the second half of 1992, the system of local and regional government in Latvia was gradually democratised and decentralised. This process helped to restore the country's independence and bring its social system into line with European standards.

The legislation on the local self-government of towns, pagasts and rajons, voted in 1990, represented a break with the hierarchical organisation of authority and apportioned powers on a functional basis.

However, the Latvian local authorities' association states that from mid-1992 until late 1995 the trend was once more towards centralisation and local authorities' subordination to central government was only occasionally tempered by legislation to strengthen local democracy.

In particular, it says that since mid-1992, following the adoption of legislation on self-government for the capital, Riga, there has been a centralisation process in Latvia and that since the start of 1996 the government has pursued an openly anti-local authority policy and irreversible anti-democratic changes are in the pipeline.

The Latvian association supplies various solid arguments in support of this contention:

Since 1992, central government has been steadily increasing its powers and the centralising process has given rise to the local self-government legislation enacted in 1994. Under this act, local authorities are defined as institutions subject to central government, which is at variance with the legislation in force and constitutes an attempt to establish a hierarchical system in which regional and local self-governing authorities are subordinate to the organs of the state.

In the financial field, an ever-increasing proportion of national resources is being used to finance central government activities while the percentage of national income allocated to territorial authorities is declining each year. Between 1992 and 1995 it fell from 25 to 20%. In the 1997 budget it is planned to reduce this figure still further, to about 16,7%.

By depriving local authorities of the right to receive part of the revenue from income tax on businesses and valued added tax the government has broken the mutually beneficial link between local government's income and its support for the local economy. The decree exempting agriculture from income tax was a crushing blow to the economic foundations of most of Latvia's local authorities, making them dependent on grants and subsidies for fulfilling their responsibilities.

In 1994, the tax negotiations left the territorial authorities at a disadvantage: all taxes are now defined as state taxes and local and regional authorities no longer have the power to change income tax rates, even though these taxes are their main source of revenue. Under the resulting legislation territorial authorities also lost the right to determine the forms of local taxes.

In 1995, legislation was enacted on budgetary and financial management, limiting local and regional authorities' access to financial markets and subjecting them to government control.

Since early 1996, the financial centralisation process has proceeded apace. The government has introduced the notion of a "non-deficit" budget. However, this objective is to be achieved solely by reducing territorial authorities' budgets. In 1996 and 1997, these authorities lost 100 million Lats (compared with a total territorial authority annual budget of 250 million Lats). Yet the financing of state activities continues to increase.

There has been a further reduction in local authorities' powers to levy taxes. In 1996, four cities - Riga, Ventspils, Rezekne and Daugavpils - had certain powers to administer the collection of personal income tax, but in 1997 this was confined to the first two only.

New attempts are being already made to reduce authorities' financial independence. Since the middle of 1996, a special government commission has exercised control over loans raised by territorial authorities. From the beginning of 1997, these authorities lost their access to the private capital market. Loans are regulated by the Ministry of Finance and are only available from the Treasury.

More generally, several reforms concerning local and regional authorities have been under preparation since early 1996.

It has been decided to abandon regional elections. Under a new plan, rajons are to be administered by the state, their employees will be subject to dual hierarchical accountability and they will co-ordinate and supervise local authorities. Government-appointed prefects will be empowered to issue directives to both local authorities and their officials.

The local authority association considers this to be a flagrant violation of the provisions of the European Charter concerning the rights of local government.

In September 1996, the draft legislation on regional state administration and the corresponding amendments to the local self-government legislation were approved by the cabinet and submitted to parliament. Following debate, both sets of proposals were rejected but the government was committed to reform. In December 1996, parliament approved other proposals for abolishing regional self-government. The local elections on 9 March 1997 only concerned pagasts, towns and cities. The regional elected authorities will only remain in place until the end of 1997.

A new draft of the regional state administration legislation is being prepared by the government. Under this law, the head of the administration would have the power, very unusual under the Latvian legal system, to issue decrees binding on all physical and legal persons in rajons. Heads of regional administration would control territorial authorities' finances and supervise all their activities.

The local authority association considers this to be a very negative reform since it would seriously breach the principles of the European Charter of Local Self-Government.

The Latvian parliament passed legislation on 22 February 1996 under which the country acceded to the Charter. Latvia ratified 27 of the 30 paragraphs in Part I of the Charter, the exceptions being paragraph 2 of article 6 (training and career conditions), paragraph 2 of article 7 (financial compensation and social welfare protection) and paragraph 8 of article 9 (access to the national capital market). The Charter came into force in Latvia on 1 April 1997.

The Working Group considers that the importance and gravity of the information supplied by the Latvian local authorities association on the centralisation process in the country call for a detailed examination, particularly as the rapporteur has asked the Latvian government to respond to the association's allegations but has not received any reply. The examination should take the form of a specific report of the Congress in accordance with paragraphs 8 and 11 of Congress Resolution 31 (1996).

IV. The situation of local democracy in Moldova

After reading the Congress report on the state of local democracy in Moldova prepared by Mr Chevrot (France) in 1995, the Working Group confirmed that the provisions of the Moldovan constitution concerned with local self-government were rather uninformative since they contained no reference to local authorities' responsibilities, the status of local elected representatives or the institutional relationship between central and local authorities. The constitution makes an excessively brief reference to territorial administrative organisation and the special status of certain areas of the country. A clear distinction is not always drawn between the organs of central government and those of the local authorities.

Mr Chevrot's report also notes that the legislation on the organisation of territorial authorities stipulates that the establishment and dissolution of territorial administrative units and changes to their boundaries shall be decided by parliament on the basis of proposals submitted by the government and local administrative authorities (section 12, paragraph 1). This is compatible with article 5 of the European Charter of Local Self-Government but in order to offer better protection for local authorities' geographical boundaries it would be desirable if specific reference could be made to the possibility of prior consultation of the local population.

In addition to these general observations, it should be noted that the legislation on local public administration (Act no 310-XIII, 1994) fails to satisfy all the principles laid down in the European Charter of Local Self-Government concerning relations between central and local authorities.

In particular, the legislation is not compatible with the basic principles of local self-government laid down in the Charter in so far as the Moldovan central authorities:

a. are empowered to nominate (the government) or directly appoint (the president) local authorities' executive organs, which is incompatible with article 3, paragraph 2 of the Charter, which entitles councils or assemblies to possess executive organs responsible to them;

b. supervise the expediency and exercise direct control of the activities of local bodies, with powers of dismissal, revocation or suspension, even in the absence of a final decision of the relevant judicial authority, which is incompatible with article 8, paragraphs 2 and 3 of the Charter. The power to dismiss or suspend local bodies provided for in this act undoubtedly infringes the self-governing status of local authorities which, by definition, must not be subject to supervision of the expediency of the decisions they are required to take. This principle is based on the fact that the local authorities are directly elected by the people and not appointed by the central authorities.

In conclusion, the Working Group would like to see the rapid enactment of legislation to amend Act no 310-XIII on local public administration to ensure a total separation of the functions of central government bodies from those of local bodies and the introduction of a system of supervision based on activities' compliance with the law and rather than their expediency.

In this context, it should be recalled that under the terms of paragraph 8.g of Opinion 188 (1995) of the Parliamentary Assembly on Moldova's application for Council of Europe membership, the Moldovan parliament undertook to reform its laws and practice in the sphere of local self-government. This commitment to reform resulted in a certain number of bills to amend the legislation on local public administration and on territorial administrative organisation (Act no 306-XIII, 1994). Other bills have been published to deal with local elections and local authorities' financial resources.

However, it has to be stated that to date Moldova has not always respected its undertakings.

With regard to the electoral process, on 6 November 1995, the constitutional court found that certain provisions of the law on local elections were not in compliance with the constitution. In particular, it ruled that the power granted to the President of the Republic to appoint mayors and municipal councils in local authorities where the turnout in local elections was less than 50% was unconstitutional. The constitutional court ordered parliament to amend the legislation on local elections within four months to bring it into line with this decision and to rectify the legal consequences of the provisions of the law that had been ruled unconstitutional.

On 23 May 1996, parliament enacted legislation to amend the law by requiring a minimum turnout of 50% in the first round of local elections. Under the new law, if this threshold is not attained a second round of voting will take place, for which no minimum turnout is required. While these provisions are in line with the suggestions in Mr Chevrot's report and the constitutional court's ruling, fresh elections have not yet been held in the 97 municipalities concerned, which include the country's capital. The mayors and municipal councils in these areas are still the ones appointed by the President. It is unacceptable that legislation passed nearly a year ago has still not been applied.

Having regard to these points and the importance and urgency of the reforms referred to, the Working Group propose that a special report should be prepared to monitor directly the various stages of the revision of the legislation on local self-government and the ratification procedure for the European Charter of Local Self-Government. The report should be drawn up in accordance with paragraphs 8 and 11 of Congress Resolution 31 (1996).

V. The situation of local democracy in Ukraine

The present situation of local self-government is characterised by two developments in 1996 and 1997.

1) Firstly, the "Constitutional Agreement" (the provisional constitution of 8 June 1995) that replaced the "Brezhnev" constitution from the Communist period) was superseded by a new Ukrainian Constitution, adopted 28 June 1996.

2) Secondly, new drafts of a Law on Local Self-Government in Ukraine are continually being presented to and debated by parliament. The law was finally passed after its third reading on 24 April 1997. It is reported that owing to serious changes and deviations from the principles of the European Charter of Local Self-Government and the Ukrainian constitution it is to be challenged by the President of Ukraine.

Given this situation, representatives and experts of the Council of Europe were invited to three further sets of talks and conferences on the latest developments in 1996 and to two in 1997:

a) Representatives of the National Foundation for Local Self-Government, an organisation close to the Ukraine government, issued invitations to talks on the drafts (submitted incomplete) in Kiev on 18/19 July 1996.

b) Before that, a conference billed as an "international conference on theory and practice" and entitled "European Charter of Local Self-Government and Problems of Ukrainian Local Government Reform" took place from 16 to 18 May 1996 at a state sanatorium complex near the Ukrainian capital.

c) On 3 December 1996, the Parliamentary Committee for State Construction, the Role of the Councils and Local Self-Government), a select committee of the Ukraine parliament (Verkhovna Rada), conducted a hearing at which the undersigned was able to voice his views as a representative of the Council of Europe.

d) A visit of a Council of Europe delegation to Kiev on 25 March 1997 was mainly devoted to the rights and self-government of the capital city of Kiev.

e) On 15 and 16 April 1997 another Council of Europe delegation continued the talks held in December 1996 with the parliament of Ukraine and with representatives of the city of Kiev and the government.

f) In addition, on 24 February 1997, at the margins of the sitting of the Working Group on the situation of local self-government in the 40 Council of Europe member states, talks took place with leading representatives of the Institute for Legislation of the Ukraine parliament (Verkhovna Rada) on the situation of the plans for local government legislation. At the sitting of the Working Group held in Paris on 28 April 1997 the mayor of the north-west Ukrainian town of Lviv also participated.

) Local self-government in the new Ukrainian constitution of June 1996

Under the heading "Local Self-Government", Chapter XI of the new constitution of 28 June 1996 now devotes seven articles (140-146) to villages and joint village authorities, settlements, cities, districts (rayony) and the 24 regions (oblasti).

This section is much shorter than the very detailed chapter contained in the provisional constitutional of 8 June 1995, which devoted 14 articles to this subject in chapter VII (Articles 46-59). A number of rules have been omitted and are now (only) to be the subject of ordinary (non-constitutional) law.

(I refer to my report on "the legal situation of local self-government in Ukraine" of 31 July 1995 [Council of Europe (CLRAE) document of 12 September 1995]).

The new constitution is characterised by the lengthy and heated negotiations between President Kuchma and the parliament, which only agreed to adopt the draft at a marathon 24-hour sitting on 27/28 June 1996, under the pressure of the President's announcement of a referendum on the constitution. In doing so, it agreed to and formulated compromises that have resulted in inconsistencies in the present constitution or have failed to eliminate contradictions contained in the drafts.

Article 7 states clearly and concisely that the constitution "recognises and guarantees local self-government in Ukraine", and Article 140 reaffirms that the right to local self-government is "the right to resolve matters of local importance independently". The constitution thus appears to want to fulfil the principle enshrined in the European Charter.

On the other hand, this wording falls far short of Article 47 of the provisional constitution, which states that the "local authorities shall have free discretion to decide, within the framework of the constitution and the ordinary laws of Ukraine, on all (!) local matters". This provision, after all, establish the principle of "general responsibility", with state responsibilities the exception, and it is progressive in its wording in that it supports the principle of subsidiarity and not only adopts the approach of decentralisation and the delegation of functions.

However, one advantage that needs to be pointed out is that the previous exhaustive enumeration of local authority functions or responsibilities (Article 49 of the provisional constitution of 1995) has not been deleted but extended by the addition of an "escape clause": after enumerating the most important responsibilities and functions of local government units, Article 143, paragraph 1, now states that these also include resolving "other issues of local importance that by law form part of their area of responsibility". A similar possibility of extending this scope is also contained in Article 143, paragraph 2, with regard to the regions and districts.

However, in both cases the constitution subjects the distribution of functions and responsibilities to statutory authorisation. This reservation is far removed from the clause granting full powers contained in the 1995 constitution and is thus a central-government inspired retrograde step on the way to achieving the autonomy of local authorities described in the 1985 Council of European Charter, which Ukraine undertook on its accession to observe. The achievement of the aim of placing "a substantial share of public affairs" under the responsibility of the local authorities (Article 3 of the Charter) is thus further away than 1995.

The European Charter also guarantees that the local authorities' right to govern themselves is exercised by democratically elected councils that possess executive organs, i.e. the relevant administrative bodies, that are accountable to them (!). However, this principle is violated by the present constitution. Villages, settlements and cities do, it is true, have "their (own) executive bodies" (Article 140, paragraph 3), and Article 140, paragraph 6, does place the organisation and administration of municipal districts under the authority of the city councils. However, the districts (rayony) and regions (oblasti), which the constitution (like the Constitutional Agreement of 1995) classifies as "bodies of local self-government" (Article 140, paragraph 4) and places on the same level as (local) bodies of the decentralised state administration, must employ the local state (!) administration to carry out their executive functions (Article 118: "Executive power in the regions and districts ... shall be exercised by the local state administrations"). The same is supposed to apply to the administrations of the cities of Kiev and Sebastopol, the "special features (of which) are governed by separate laws" - the drafts of which have still not been submitted (!). The staff of this decentralised "local state administration" is "formed and appointed" by its chief officer, who is "appointed to and dismissed from this position by the President of Ukraine on the recommendation of the Council of Ministers" (Article 118, paragraphs 3 and 4). Article 106 (10) explicitly repeats this right of appointment as one of the twenty-nine tasks of the President enumerated. In addition, it stresses that this right may not be transferred to other individuals or delegated as part of the state administration (Article 106, paragraph 2).

Moreover, paragraph 5 of Article 118 emphasises that these "heads of local state administrations are, in the exercise of their functions, accountable to the President of Ukraine and the Council of Ministers of Ukraine by virtue of the fact that they answer to, and are under the control of, the administrative bodies (immediately) above them". Paragraph 6 only qualifies this by stating that local state administrations are accountable to, and under the control of, the councils with regard to the functions assigned to them by the councils of the districts and regions.

Ukrainian experts confirmed in talks that there will be, and already are, difficulties with the local staff available today. It was pointed out that as a result of their training and experience they feel bound to the state and consider themselves to be its executive officers. The certain distrust they have of local office holders is all the greater because in many cases the latter do not yet have sufficient experience and, moreover, the administrative staff consider that their own status is more permanent and will last beyond the periods for which local representatives are elected. A law relating to public service that also takes account of the particular interests and concerns of the local authorities is, it was noted, urgently necessary. A bill is to be presented in the second trimester 1997. It remains to be seen whether this law will succeed in placing a strong emphasis on local authority interests. According to present experience, the attitude of the parliament leads one to expect it to have a more "state-oriented" character. However, if more and more functions are to be assigned or delegated to the local authorities it must be possible for the staff that have up to now been employees of the state and who are fully familiar with the work to be assigned to the local authorities without loss of status. Otherwise, the successful assumption of functions by the local authorities will be unnecessarily rendered more difficult.

In the case of elections a distinction is also made, on the one hand, between villages, administrative associations of villages, settlements and cities, in which the chairman or chairwoman of the council is at the same time head of the administration. He or she is directly elected by the population by secret ballot on the basis of universal suffrage for a period of four years (Article 141, paragraph 2). On the other hand, in districts and regions the chairman or chairwoman of the council who - as pointed out [Article 118] - is not head of the executive but is the chairman or chairwoman of an administrative committee (executive committee) is elected by the council of the territory concerned (Article 141, paragraph 4 of the constitution).

The confusion with regard to the distinction made between local government and state responsibilities is intensified by Article 119 of the constitution, which, although it provides for "co-operation with bodies of self-government", ensures that the "local state administrations in the appropriate territories (!)" not only observe the constitution and ordinary laws but also the decisions ("acts") of the President and the Cabinet and even those of "the other executive bodies" (clause 1).

In the final analysis, there is still a deep suspicion of democratically elected local bodies responsible to and run by themselves, and there is still no overall change to the tightly organised, centralised state administration and, as a result - quite apart from financial dependence - the dominance of state administration over local self-government, whose responsibilities are described in very general terms. This applies all the more where, as in the case of the districts and regions, responsibility for the appointment and dismissal of executive staff remains to a very large extent in state hands.

2) Successive drafts of a Ukrainian law on local self-government

After Ukraine's independence and up to 1995, the most important laws on local public administration and local self-government were

- the Law on Elected Local Councils and Local and Regional Self-Government, of 26 March 1992

- The Law on the Formation of Local Administrative Authorities, of 3 February 1994

- the Law on the Status of Members of Elected Local Councils, of February 1994, and

- the Law on the Election of People's Representatives to Local Councils (right to vote and eligibility for election)

These laws have up to now governed the beginnings of democratic structural change in local self-government, although it was hardly possible to bring them into line with the 1978 constitution (the "Brezhnev" constitution"), which was still valid at the time and was therefore suspended, in accordance with the legislators' wishes. In addition to the new structures of local self-government there was, and still is, a hierarchical structure of state representatives at the local level, the so-called "President's representatives", who are assigned the responsibility of running the state administration as local administrative bodies. However, the Law on the Formation of Local Administrative Authorities, of 3 February 1994, abolished the institution of the President's representatives with effect from 24 June 1994. Here the path was taken, and consistently followed, of assigning state functions to local authority administrative bodies. At the same time, however, the central government "agencies", i.e. state authorities with branches in the regions, administrative districts and cities, were retained. In the new constitution of 1996 the fact that the head of the local state authorities (e.g. in the districts and regions) will also be appointed in the future by the President (Articles 106 and 118, paragraphs 3 and 4) reminds one of the erstwhile "representatives of the President".

The above laws were, however, already out of date with the entry into force of the "Constitutional Agreement" of June 1995, the so-called provisional constitution, which set much farther-reaching goals with regard to democratisation, decentralisation and the strengthening of local and regional self-government. Accordingly, various attempts were made to revise a draft "Ukrainian Law on the Local Councils and People's Representatives", of December 1994, and a special law for the capital city of Kiev and the surrounding regions. The task was all the more urgent as office-holders had in many instances not yet been replaced by people who had been democratically elected. The Communist words "soviet" and "people's deputies" were subsequently abandoned. (V. F. Oprishko, Director of the Institute for Legislation of the Ukraine parliament stated on 24 February 1997: "It was representatives of the Council of Europe who induced us to use the ancient Ukrainian word "rada" ("council") instead of "soviet" in future for all bodies from the "town council" to the Verkhovna Rada ("Supreme Council")".

In March 1996 experts from the National Foundation for Local Self-Government produced a first draft evaluating the 1995 constitution and assessing the expectations for the new 1996 constitution.

This draft was revised by the Association of Ukrainian Cities after the adoption of the new constitution of 28 June 1996.

Since June 1996 too, this draft has, in turn, been revised by a working group of the Ukrainian Ministry of Justice under the chairmanship of Justice Minister Golovatyi, in accordance with a decision of the Ukrainian Prime Minister. The further revision of the new version was then assigned to a working group operating in accordance with instructions issued on 13 August 1996 by the head of the Office of the President, with a group of experts of the (above-mentioned) Association of Ukrainian Cities available for consultation.

These working texts were subsequently included in the deliberations of the parliament from September 1996 onwards.

As was to be expected, the parliament was unable to ignore the inconsistencies in the new constitution (see section I above):

The existence side by side of (decentralised) state administrations and state bodies with local responsibilities, on the one hand, and self-governing local authorities, on the other, cannot fail to result in a lack of clarity in the new law too.

As pointed out in the above-mentioned report of 31 July 1995/12 September 1995, there is too much emphasis on mere decentralisation within state authorities. The relevant responsibilities and functions are not under the control of the LOCAL AUTHORITIES, i.e. the latter are not given the necessary autonomy to carry out these tasks.

Local Self-Government also presupposes control over the appointment of EXECUTIVE STAFF. When the local authorities are assigned the relevant responsibilities and functions staff must be accountable to them. The appointment and supervision of new staff must be the responsibility of the local council or an administrative body responsible to it.

The foreseeable conflicts in the legislative procedure were still being described at the end of 1996 as follows: some members of parliament would like the local authority executive to have more power, whilst others want more power for the representative bodies (councils) elected by the citizens. This also becomes clear from the conflict surrounding the mayor of the capital city and his position. After the 1994 elections he was chairman of the city council for one year (July 1995 to July 1996) and, in his capacity as chairman of the (executive) Administrative Committee, head of the administration. The new constitution splits the two functions, and political agreement or disagreement with the president may play an (additional) role. Now everyone is waiting for a special law on self-government for the capital, for which there has been provision in the constitution for some time (Article 140, paragraph 2, and, before that, in the 1995 Constitutional Agreement).

A problem that was repeatedly mentioned by the Ukrainians to whom we spoke is the lack of political pressure for genuine change. Democratic thinking, they pointed out, was suppressed for over seventy years, and democratic action was impossible from the "occupation" by Russian troops in 1920 until the political changes in 1990/91. A high-ranking member of the Legislative Commission said: "Public opinion and local staff are more likely to have a negative view of everything being discussed under the heading of local self-government".

To aggravate the problem, they say, at times of economic change and structural crises, decentralisation or even the assignment to local authorities of functions that have previously been "central" state functions - especially in the area of social welfare - is dismissed as an attempt on the part of the political leadership to dispose of problems by re-assigning responsibility.

This mistrust is currently leading to a cry for more state intervention and action, especially in the area of local authority functions and services. A representative of the "Foundation for Local Self-Government" pointed out: "It is tremendously important today to alter people's attitudes. We need to do missionary work".

This lack of pressure at grass roots level becomes clear in the rather sluggish legislative procedure. Those who would prefer to restore the old system and see local executive power as more the state's responsibility and part of its administrative functions are rapidly gaining the upper hand, especially when executive bodies are supplemented by formally democratically elected councils whose actual scope for action remains dependent from the point of view of organisation, finance and personnel on state-appointed, hierarchically oriented administrative bodies that are controlled through their subordination to the state. (The mayor of Kiev Kosakovski commented on 3 December 1996: "We cannot yet speak of democracy in local self-government".)

The select committee appointed by the parliament, with a total of twenty-two members, appears to have no clear majorities. It is chaired by Viktor Mursiyaka (of the independent "centre"), one of the vice-presidents of the parliament (Verkhovna Rada - the "Supreme Council"). At least six (old) communists belong to it.

In a total of eight votes held (up to 3 December) no majority was achieved for the different drafts submitted, so that it remained unclear for a long time which draft would finally be presented to the full parliament.

According to information supplied by members of the parliamentary select committee, a total of 1800 amendments were tabled up to December 1996. This did not sound very hopeful and led one to assume that, on the one hand, certain individuals were deliberately making the procedure more difficult and, on the other hand, that considerable resistance was being put up in the parliament against the drafts presented by the President, the National Foundation and the local authority associations. Thus, in spite of the clear statement made in the constitution that the counties (rayony) and regions (oblasti) are to be considered "units of local self-government" a number of MPs expressed the opinion in talks held on 16 April 1997 that this was not the case and that they should remain part of the state administration and responsible to the government. This is a dispute that we have experienced in Poland.

On 17 April, the law was swiftly presented to parliament again for its third reading after having been prepared by the aforementioned select committee. It was passed on 24 April 1997. The Council of Europe has not yet received the final text (in translation). A number of important differences of opinion have clearly remained, especially regarding the issues that were in dispute right up to the last minute. Nevertheless, of the original 1800 amendments in December 1996 only ten issues remained in contention when the parliament proceeded to the last reading. Problems concerning local authority property, the division of responsibilities between the local authorities and local administrative bodies of the state and the status of the counties and regions have not been settled.

It is reported that the President is currently (May 1997) examining whether to object to the text passed because it violates the constitution.

A final opinion will have to be drawn up when the text of the law has been received. It will be necessary to examine once again whether it corresponds to the principles of the European Charter of Local Self-Government. Although Ukraine has not yet ratified the Charter it does consider itself obliged to do so at least one year after its accession to the Council of Europe (6 November 1996), i.e. by November 1997. Representatives of the government and parliament gave the assurance in the talks held in April 1996 that this would be done in time, probably in summer 1997.

3) Conclusions

The constitution and local government legislation must make a clear distinction between the functions and responsibilities of state and local government bodies. This does not mean that state functions cannot also be exercised to a greater extent by the local authorities, provided that responsibilities are clearly defined.

Decentralisation must lead, in a manner consistent with the principle of subsidiarity, to the placing under local authority control of functions and responsibilities, as well as administrative, organisational and staff resources.

The freedom of action of local authorities, districts and regions must be strengthened by means of a clear separation of local and regional budgets, on the one hand, and state budgets (including grants), on the other.

The constitution and ordinary laws must assign to the districts and regions, which are defined in the former as "bodies of local self-government", the responsibilities, funds and human resources that are guaranteed such authorities in the Council of Europe's European Charter of Local Self-Government, of 15 October 1985.

In its report of 12 September 1996, the working group consisting of representatives of the Cabinet (the Minister of Justice), the office of the President, the "Foundation for Local Self-Government" and the Association of Ukrainian Cities mentions as additional objectives "the further development of the democratisation of Ukrainian society", "the strengthening of local self-government as one of the fundamental elements of Ukrainian society", "the development of public awareness and an increase in the responsibility of the citizens for the situation in their own area and in their local administration and economy".

It appears doubtful whether a course correction can be achieved by the new law on local self-government on its own. As pointed out above, it will probably also be necessary to clarify and make corrections to parts of the constitution of 28 June 1996 if the observance of the high standards established by the 1995 Constitutional Agreement is to be ensured by the few rules relating to the local authorities in the new constitution taken together with the new local government law.

An important step in this direction could be the early ratification of the European Charter of Local Self-Government, because this would provide the opportunity to interpret the imprecise parts of the constitution in the light of its provisions and revise the legislation on this basis. It ought to be possible to expect its ratification before the end of 1997. Some MPs themselves emphasised that a revision of the most recent legislation will presumably be unavoidable after the ratification of the Charter since it has up to now hardly played any role in the debates in parliament, whilst the original draft was definitely based on the Charter.

According to the basic law on the status of local authorities, a large number of special provisions still need to be enacted. The following are planned, among others:

* the aforementioned separate laws for the capital city of Kiev and Sebastopol, with the special problem of the Russian Black Sea fleet and its base in that city;

* a new electoral law for the local authorities, which should also govern the arrangements for holding referendums and plebiscites;

* a law on local taxes, fees and income;

* a law on issues relating to local authority property;

* a law on the status of local office holders and local authority staff.

At the moment it is unclear whether it is sensible to enact individual laws or whether it is possible to combine these aspects in a single law. Representatives of the National Foundation for Local Self-Government indicated that it was conceivable that they could be combined at a later date in a common local government law.

The Council of Europe, and in particular the Congress of Local and Regional Authorities of Europe (CLRAE), should continue with, and increase its support for, the efforts to strengthen local democracy, which, although they have already been clearly formulated, are still being considerably impeded. A main point of emphasis will need to be co-operation with the local authority associations and the foundations, as well as co-operation in their efforts to raise awareness with regard to the importance of local democracy.