COR/06/126
Brussels, 23 October 2006
Commissioner Almunia calls for increased coordination between authorities at regional, national and EU level to ensure successful fiscal policy
The role of regional, national and EU budgets in the Economic and Monetary Union represents a key element in today's economic policy making, according to Joaquín ALMUNIA, Commissioner for Economic and Financial Affairs. The statement came as part of a thematic structured dialogue hosted by the Committee of the Regions (CoR) under the request of European Commission President José Manuel BARROSO.
The dialogue, jointly organised by the CoR and the European Commission's Economic and Financial Affairs DG was opened by the First Vice-President of the CoR Luc VAN DEN BRANDE and Harry DIJKSMA, Chairman of the COR's Commission for economic and social policy. Welcoming the various association representatives in attendance, Mr Van Den Brande stressed the importance of the dialogue for local and regional authorities as budgetary policy becomes increasingly "condemned" to a "multilevel governance" approach, which necessitates dialogue, consultation and voluntary partnerships.
The CoR Vice-President, deputising for the absent President Michel DELEBARRE, insisted that more and more tasks and competences are being assigned to the local and regional policy levels without the necessary financial resources and as a result: "this evolution leaves these authorities with great difficulties, as they don't have at their disposal all the required means to carry out the new tasks or competences, while the citizens are expecting results."
Asserting that all levels of government (local, regional and national) have to contribute to the Stability and Growth Pact requirements, Mr Van Den Brande was adamant that the projected targets will only be achieved if the fiscal policy of the various levels of power is efficiently coordinated. Mr Dijksma voiced his support, reinforcing the importance of regions as drivers of economic success and an integral factor in the maintenance of the stability criteria outlined in the Maastricht Treaty.
In his introductory statement, Commissioner Almunia encouraged the closer working relationship between EU institutions and the associations representing the municipalities, provinces and regions of the EU's Member States. Commenting on the fruitful exchange of views and experiences facilitated through the dialogue, the Commissioner stressed the value of bringing the institutions and the Union closer together.
The Commissioner placed particular emphasis on the need for appropriate conduct of budgetary policy by all the institutional actors in order to attain sound and sustainable public finances, which in turn play an important role in achieving a growth supportive environment. Mr Almunia proceeded to list a series of fundamental economic and policy developments in Europe that have significantly affected the framework in which budgetary policy has to be designed and implemented.
"The deeper economic integration experienced in the EU has been accompanied by a growing role played by the EU budget, which has gradually assumed some national budgetary competencies and integrated new policies at EU level" said the Commissioner. "More recently, the implementation of EMU has also entailed important implications in terms of fiscal policy management". Mr Almunia underlined that such changes and transformations have introduced new challenges to the pursuit of ensuring suitable fiscal policy making.
The discussion which followed allowed the assembled participants to express their views on the issue. Wim DEETMAN, Mayor of The Hague and First Vice-President of the Council of European Municipalities and Regions (CEMR) highlighted the need to develop a stable but growth-oriented macroeconomic framework, within which European regions can plan properly for the positive, sustainable future of their territory. Mr Deetman also asked that greater consideration be given to the relationship between national governments and the sub-national spheres of government.
"We agree that a good co-ordination is required, but it must not be simply a top-down process in which central governments alone decide" claimed Deetman. "Most countries have some arrangements for consultation and dialogue, though many are only partially successful at present."
"New tasks or competences are devolved by central governments without proper financial transfers and this puts great pressure on the system at local and regional levels" added the Mayor.
Jean-Louis DESTANS, Chairman of the European Committee of the Assembly of French Departments and President of the General Council of the Eure, expressed his gratitude to Commissioner Almunia for the opportunity to convey to the European Commission some of the views that local and regional authorities have on the issues directly affecting the use of regional powers for the benefit of the EU's local populations.
"It is my hope that this dialogue, and the topic under discussion today, will constitute a first step in the establishment of a sustained exchange between local and regional authorities, their national representative bodies, and the EU institutions" stressed the European Committee chairman.
Mr Destans, a member of the CoR's socialist political group the PES, emphasised that the impact of the national budget, drawn up in a Community framework of budgetary discipline, is a key issue for French local authorities.
Clemens LINDEMANN, County Manager for Saarpfalz district authority, discussed the impact of federal reforms on the different levels of government in Germany and asked the Commissioner what role the EU's funding policy will play in preserving the financial resources of municipalities and regions, particularly for regions that lie outside the more prosperous areas referred to as "centres of growth".
In response to Poland's dilemma in approaching the national legal debt limit Jerzy KROPIWNICKI, Mayor of Łodź and member of the CoR's centre-right political group the EPP, suggested introducing a bonus from the Central Budget - additional funds in the form of increased share in the taxes due to the State Treasury - to new Member States, as an own contribution of those local governments which are most active in attracting EU funds. As a means of alleviating pressure on the budget of local governments to co-finance EU projects Mr Kropiwnicki, speaking on behalf of the Union of Polish Metropolises, also proposed the reinforcement and stabilisation of local government’s funding sources by ensuring, in addition to its current share in the income and corporation taxes and land tax, a share in indirect taxes which are less vulnerable to economic volatilities.
Yolanda MATAS, Counsellor of Herrera de los Navarros and a representative of the Aragon Association of Local Authorities raised the issue of municipal budgets and the knock-on effect of changes in budgets from higher organisational levels. Matas echoed the Commissioner's sentiments that effective fiscal coordination among all government tiers is necessary to meet the requirements of the Stability and Growth Pact but urged that greater attention be paid to the difficulties encountered by municipalities.
For more information, please contact: Martin MALLON Tel. +32 (0)2 282 20 33 Email: martin.mallon@cor.europa.eu Dennis ABBOTT Tel. +32 (0)2 282 20 99 Email: dennis.abbott@cor.europa.eu Estelle POIDEVIN Tel. +32 (0)2 282 22 70 Email: estelle.poidevin@cor.europa.eu Press Release in full : http://www.cor.europa.eu/en/press/press_releases.htm
