Division of Powers between the EU, Member States and Local and Regional Authorities

The current political and economic developments in the EU require and justify an increased role for subnational governments, in order to become better equipped to tackle the crisis on the ground and act in coherence with the upper levels of government. In this paper, Claire Dhéret, Andreea Martinovici and Fabian Zuleeg pursue their study of the evolution of the role of sub-national governments in relation with European Governance, paying particular attention to the impact of the financial crisis, and present a methodological and operational reflection on the future extension of a set of country fact-sheets previously drawn up by the Committee of the Regions on the issue of the division of powers among the different levels of government. Having regular country fact-sheets on the composition and structural organisation of subnational budgets over time will enable conclusions to be drawn on the evolution of decentralisation, the EU’s influence on this process and the coherence between the devolution of powers and the provision of adequate financing resources.

Looking at the current political and economic context in the EU, the report concludes that interaction between the EU and regional and local levels of government has increased and that the autonomy of local and regional authorities (LRAs) has augmented. Against this background, the report proposes an example of country fact-sheets that should follow four objectives, namely: demonstrating how fiscal decentralisation and devolution have evolved over time; providing an overview of the structural organisation of budgets at the subnational level; illustrating the importance and impact of EU funds on subnational budgets; and tracking the impact of the economic crisis and austerity measures on LRAs’ finances and on subnational public debt. Finally, the last section of the report briefly reviews the existing literature and data relevant for drawing up the country fact-sheets, by category of objectives, and resumes the main challenges in terms of data availability and coherence across member states.