What role for local and regional authorities in the post-2013 budgetary framework?

20 October 2011
Claire Dhéret (Head of Social Europe & Well-being programme and Senior Policy Analyst), Elisa Molino (External authors) and Fabian Zuleeg (Chief Executive and Chief Economist)

In this paper Fabian Zuleeg and Elisa Molino analyse the interrelations between the European Commission’s proposals for the EU’s next MFF and the Europe 2020 strategy, identifying the risks of a top-down approach and the mechanisms needed to reinforce multi-level governance.

Taking Europe 2020 strategy as a central point of the new framework, the study takes a territorial perspective in analysing the strategic and budgetary implications of the Commission’s proposals. Two broad questions underpin the analysis: How can local and regional authorities best be involved in decision-making and decision-shaping under the new framework? And how can a link be maintained between local and regional objectives and the EU strategic framework?

Firstly, an analysis of the different pieces of the framework (MFF proposal, Europe 2020 and European Semester) is conducted, with the aim of sketching out the possible interrelations and potential missing links. The analysis indicates that generally, for the new strategic (i.e. Europe 2020 and Economic Governance) and budgetary (i.e. Multiannual Financial Framework) frameworks to effectively complement each other, there is a clear need for a high degree of harmonisation of national economic policy. Although the framework acknowledges national specificities and varying levels of economic development, much pressure will be put on countries to provide meaningful contributions to the Europe 2020 targets and to adhere to the new economic governance provisions.

Secondly, the paper focuses on how to ensure proper top-down and bottom-up links among the EU, the national and the regional level. Within this context, the dynamics between policy objectives and implementation in a multilevel governance system are analysed both in the budgetary and in the operational fields. For example, regional and local governments need funding certainty and stability in order to effectively contribute to achieve Europe 2020 objectives on the ground. For this reason, a suspension of funds would have disruptive consequences. Moreover, stability can be granted only if there is real coordination between long-term (i.e. Europe 2020, Common Strategic Framework, Partnership Contracts) and short-term (i.e. National Reform Programmes) strategies.

Samples of different EU regions were used to conduct empirical analysis on the main issues touched upon by the paper. For instance, in order to develop a multilevel approach in the budgetary field, there is a need for further coordination between EU, national and regional budgets. The empirical analysis shows missing links at strategic and operational level. However, the added value of enhanced coordination needs to be balanced out with the need for flexibility and the administrative costs of the exercise.

This Committee of the Regions study has been produced by the European Policy Centre under a Framework Contract on the EU budget.

To read the paper, please click here.