Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 11 Welcome to the Committee of the

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Welcome to the

Committee of the Regions

European UnionGerhard StahlSecretary General of the Committee of the Regions

The answer of Europe’s regional and local authorities

Conference co-organised by the Wales Governance Centre at Cardiff University and the Welsh Assembly Government :

Small countries and the global crisis: challenges and opportunities?

Cardiff, 1st July 2009



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Contents

• The scenario: globalisation, EU, citizens and the crisis

• Regions, local authorities: drivers for innovationand sustainable recovery

• The scale: territorial cooperation, Europe and the world

• The engagement of the CoR :– EU decision-shaping– Multilevel Governance– Territorial cooperation

• The CoR and the Academia



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The scenario:Globalisation, EU, citizens and the crisis



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Globalisation, European integration, localisation.

• Global challenges: economic globalisation, demographic change, migration flows, climate change, energy

• European integration: EU enlargement, widening of the EURO area, enlargement of the Schengen area, Lisbon Treaty

• Localisation: single territories are directly faced with challenges and have access to opportunities of a larger magnitude and which requires pooling of resources



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EU Single Market: the largest in the world. An asset to preserve. The most advanced model of „governed globalisation“.

Source: WTO, International Trade Statistics, 2007



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Imbalances of the World Economy

Source: IMF (Oct 2008), Global Financial Stability Report



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Chronology of the banking crisis in 2008

17/02/08 Northern Rock nationalised17/03/08 Bear Stearns acquired by JP Morgan Chase01/04/08 Sachsen LB acquired by LBBW11/07/08 Indy Mac nationalised (FDIC)21/08/08 IKB acquired by Lone Star08/09/08 Fannie Mae, Freddie Mac nationalised15/09/08 Lehman Brothers insolvent15/09/08 Marrill Lynch acquired by Bank of America17/09/08 AIG nationalised17/09/08 HBOS acquired by Lloyds22/09/08 Goldman Sachs and Morgan Stanley become regular commercial banks26/09/08 Washington Mutual acquired by JP Morgan Chase29/09/08 Fortis rescued by the State29/09/08 Bradford Bingley nationalised29/09/08 Hypo Real Estate rescued by the State29/09/08 Wachovia acquired by Citigroup30/09/08 Dexia rescued by the State09/10/08 The State of Iceland is insolvent10/10/08 Yamato Seimei Hoken (Japan) insolvent13/10/08 Royal Bank of Scotland, HBOS and Lloyds nationalised17/10/08 Bank Constantia (Austria) acquired by five Austrian banks24/10/08 Alpha Bank (USA) insolvent31/10/08 Freedom Bank (USA) insolvent



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Reasons for the financial crisis

Limited liability, economic growth and casino capitalism

– Under-capitalisation– Excessive risk-taking (mortgage backed

securities, asset backed securities, collateralized debt obligations, rating agencies)



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Annus horribilis

• Unprecedented financial, economic and social crisishow to avoid the worst?how to regain economic tonicity?how to preserve social cohesion?how to re-invent our future?

• Energy / climate crisisgeopolitics impact in a new multipolar world under shape

• Institutional crisistreaty stuck



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The crisis: gloomy expectations

Source: The Euro Growth Indicator is calculated by the Observatoire Francais des Conjonctures Economiques (OFCE, Paris) in cooperation with the EUROFRAME and published by the Financial Times Deutschland. The purpose of this leading indicator is to anticipate the development of the GDP in the euro area two quarters ahead of official statistics.



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The crisis: keep the reins and prepare a new sustainable future• Coordinate recovery measures

Avoid protectionism and“beg thy neighbour” policies

• Supervise and regulate financial markets: International and EU supervisory framework, reconsider accounting practices, regulate credit rating agencies

• Balance short-term stabilising measureswith long-term structural reforms

• Temporary, targeted, timed action.Regain “contact” with the field. Envisage EXIT strategies

• Develop the new paradigm for sustainable economic growth: Prepare a revised Lisbon Strategy

• Invest in new economic drivers:e.g. renewable energies, services to people

• Protect and reform social cohesione.g. invest in re-qualification of people

Return to basics:

take care

of people

and nature?



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Quantity of (deficit) public spending is raising

Projected budgetary deficits for euro-area countries, 2007-2010

Source : European Commission Economic Forecast Spring 2009



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QUALITY of (deficit) public spending will be essential

• Incentives must be selective leading to “change” industries and “orientate” consumes

• Innovation need to be built-in in new fixed capital expenditure massive investment plans (infrastructures, buildings, ICT networks) may help in this phase to enlarge the scope and scaleof application of existing advanced technologies.

• Public expenditure needs private engagement e.g. EIB loan based instruments



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Regions and local authorities:drivers for innovation and recovery



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The European citizen

Special Report 307“The role and impact of local and regional authorities in Europe”

February 2009Field: Oct-Nov 08



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Across the Atlantic• 17 Feb: American Recovery

and Reinvestment Act• 20 Feb: Obama and Biden convene

85 mayors at the White House

• “Too often in the past, America's cities have been neglected, and our mayors haven't had -- haven't been able to be heard on the questions of national policy

You are -- you're the ones who know the areas that give us the greatest return on our investment -- you know it better than we do.

Now, rebuilding our economies and renewing our cities is going to require a true partnership between mayors and the White House, and that partnership has to begin right now

Instead of waiting for Washington, many of you have already made our cities laboratories of change, coming up with innovative new ways to solve the problems of our time

what I will need from all of you, is unprecedented responsibility and accountability



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Sub-national public sector across Europe, key figures

• 92 500 local and regional authorities

• 18 million people employed(56% of total public employment)

• 16% of total EU GDP*

• 1/3 of total public expenditure

• 2/3 of total public capital expenditure

* comparison: European Economic Recovery Plan1,5% of EU GDP = 0,3% (EU) + 1,2%(MS)3,3% if automatic stabilisers are counted

Source: Dexia (December 2008), Sub-national governments in the EU.

Huge potentialfor innovation



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Sub-national public expenditure, key investment driver

On average2/3 of total

publiccapital

expenditure

Source: Eurostat, EC(2007), Fourth Cohesion Report



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Level of public expenditure, decentralisation and Innovation ranking

Source: our elaboration from Dexia(2008), Sub-national governments in the EU.and from EC(2008), European Innovation Scoreboard

Innovation Scoreboard

ranking

Innovation leaders

Innovation followers

Moderate innovators

Catching-up countries



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Many channels to inject innovation in local/regional expenditure

Source: Dexia(2008), Sub-national governments in the EU.Organisation, responsibilities and finance



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Innovation drivers: regions and local authorities act as …

Facilitators: e.g. better regulation, e-infrastructure, e-services,

Innovators: e.g. re-engineering of public services (Web 2.0)

Promoters: e.g. incentivating new energy efficiency applications

Coordinators: e.g. fostering „sector based“ public-private partnerships

Networkers: e.g. by creating European innovation networks

Forerunners: e.g. by developing pilot projects which deliver quicker and more ambitiously than targets set at national / EU level(e.g. fight to climate change – Covenant of Mayors)



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Navarra, an example of „green“ innovation

Navarra’s development of Renewable Energy Sources (RES)

• Around 100 companies working in this sector (GDP 5%)• 5000 jobs generated• Technology, know-how development and internationalisation• Companies of Navarra have registered 43 patents on RES issues• Environment improvement:

- every year circa 5.000 CO2 tons have not been emitted - non-fossil fuels account for 61% of electricity consumed in Navarra, against Spanish average 10%.

• Governamnet of Navarra’s support:- more than 400 MEUR invested on RES systems- substantial investment through EU cohesion policy



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Ruhr2010+

Ruhr Region is diversifying its production and employment base

In North-Rhine Westphalia,creative industry (media, arts, culture, etc.)accounts nowadays for

• 32.1 billions EUR turnover• 156.000 people employed• 46.300 enterprises



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The leverage effect of EU Cohesion Policy

The EU regional policy- based on solidarity- activated in all EU regionsis an effective lever for regional and local innovation

Leverage effects• Financial leverage

national and regional co-financing, PPPs, financial engineering• Strategic policy orientation

mainstreaming of EU policies in local context, adaptation• Institutional capacity building

innovation of administrations, reinforcement of management• Cohesive building of Europe

local partnership, citizens involvement, territorial cooperation



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The scale: territorial cooperation,Europe and the world



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Meta-regions, e.g. strategy for Baltic Sea Region (and others?)• More strategic and flexible territorial cooperation

• Macro-region level allows to address challenges which go beyond traditional regional or national boundaries (e.g. Strategy for Baltic Sea Region, Strategy for Danube Basin)

• Attempt to better coordinate legislation, planning, funding across EU, national, regional and local policy-making

• Sometimes, internal territorial cohesionhighly affected by external relations (e.g. neighbourhood)

• Multi-level governance is key question:how do we adapt existing structures?do we need new set-ups (Council level, EGTCs, etc.)?how do we ensure macro-regional interest fitting EU?

• CoR is working politically through its interregional groups– Baltic Sea– North Sea– Saar-Lor-Lux (The Greater Region)– Danube– Mediterranean

Source: Prof. Esko Antola(Centrum Balticum)



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European networking.e.g. satellite-based regional innovation

2727

NEREUS

• Network of European Regions UsingSatellite infrastructure-based services

• Implementation cooperation, exchange of best practices, input to policy-making

• broad range of intervention areas relevantfor local and regional authoritiesenvironment, emergencies and security(urban transport, spatial planning, flooding, fire, pollution control)

• Regional clusters are also often at the core of the research, technological development and experimentation of innovative systemsof satellite-based services



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Territorial cooperation.e.g. Technological Top Region (NL / BE / DE)

• Aim: «Triple helix » at cross border level(business / knowledge institutions / government)

• Partners: Provinces of Limburg and North Brabant (NL), Provinces of Brabant, Limburg and Liege (BE), Land of North Rhine-Westphalia (DE)

• Focus: three clusters: chemicals and advanced materials, High Technical Systems (Engineering), Health Sciences



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Development cooperation

Regions and cities are essential actors to assist development countries

• Decentralised cooperatione.g.Germany 750 Mio €Spain 440 Mio €

• Commitment must be kept, efficiency must be improved, coordination is needed

• New instruments: Cartography of decentralised development policy Establishment of an exchange of decentralised development cooperation



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The engagement of the CoR



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Berlin Declaration 25 March 2007

“There are many goals which we cannot achieve on our own, but only in concert. Tasks are shared between the European Union, the Member States and their regions and local authorities“

- European Heads of State and Government, in the Berlin Declaration on the occasion of the 50th anniversary of the signing of the Treaties of Rome, Berlin, 25 March 2007



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The Committee of the Regions’ commitment

European Summit of Regions and Cities

• Prague, 5-6 March 2009 - “Regions and cities for Europe”

• 600 participants: Mayors, President of Regions, EU Institutions

• Main messages:- regions and cities are key players in economic recovery- need to coordinate between different levels of government- added value of the European common policies as common level playing field - relevance of the European Elections, June 2009

• http://www.praguesummit2009.eu



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Signing of the Lisbon Treaty, 13 December 2007



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Lisbon Treaty: prospects for MLG

New definition of subsidiarity: LRA dimension (art. 5 TEU)

New actors: regional parliaments (Pcl. on subsidiarity)

Strengthened role for national parliaments (art 11 TEU, Pcl. on the role of NP’s in the EU, and Pcl. on subsidiarity & proportionality)

Strengthened role for the CoR: Subsidiarity defence before the ECJ (Pcl. on subsidiarity) Privileged access to ECJ in defence of prerogatives (art 263 TFEU) Consulted in new areas as climate change & energy (art 307 TFEU)

Territorial cohesion as an objective of the Union (art 3 TEU): RLA dimension to be better taken into account in EU policy making.



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Lisbon Treaty: prospects for MLG (2)

EU to respect the internal constitutional and political structure in MS, inclusive of local and regional self-governance (art 4 TEU)

Regulatory impact of EU legislation on RLAs is to be taken into account (Pcl. On subsidiarity)

Promotion of social dialogue (art 152 TFEU)

Provisions on democratic principles and the Citizen’s initiative => a tool for civil society dialogue, platforms and action? Towards a more participative democracy based EU? (Art 9-11 TEU)

Convention method is ordinary method for Treaty change (art 48 TEU)



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The Committee of the Regions’ White Paper on Multilevel Governance - Objectives: Building EU in partnership

Renewed ‘partnership based’ Community method

Consolidated constitutional framework

Developed culture of interinstitutional and political cooperation

Enhanced participation in the European process

Reinforced effectiveness of Community action

« Regional and local authorities are genuine partners rather than mere intermediaries »



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Definition of multilevel governance

Coordinated action based on partnership and aimed at drawing up and implementing EU policies

Dynamic process with a horizontal and vertical dimension, which does not dilute political responsibility



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10 examples of multilevel governance1. The Covenant of Mayors: committing and cooperating in the fight

against climate change

2. The Euro-Mediterranean regional and local Assembly (ARLEM)

3. Open Days: European Week of Regions and Cities

4. Decentralised communication

5. European cohesion policy: leverage effects for Community policies



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Signing of the Covenant of Mayors, 10 February 2009



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10 examples of multilevel governance6. The Lisbon Monitoring Platform of the Committee of the

Regions

7. The Subsidiarity Monitoring Network

8. An integrated maritime policy for the European Union

9. The Strategy for the Baltic Sea region

10. The European Grouping of Territorial Cooperation (EGTC)



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The Lisbon Monitoring Platform

• gathers 114 regions and cities from 26 EU countries

• allows an exchange of best practice and mutual learning

• monitors the advancement of the Jobs and Growth Strategy on the field

• analyses the Economic Recovery measures undertaken at local and regional level

• Currently open consultation on the strategy post 2010 for Growth and Jobs

• http://lisbon.cor.europa.eu



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Territorial cooperation and EGTC

• European Grouping of Territorial Cooperationnew legal tool to stabilise cooperation between regions,local authorities and national authorities – strongly demanded by the CoR

• CoR’s EGTC Expert Group: 40 Members from 23 different Member States

• Investigation on added value of EGTC with respect to scope (including R+D+I) and scale of territorial cooperation

• 5 EGTCs already established, about 30 on the pipeline across Europe

• http://www.cor.europa.eu/egtc.htm



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The CoR and the Academia



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CoR and Academia

Thesis Competition

• Since 1996 annual doctoral thesis competition onLocal and Regional authorities in the European Union

• The purpose of the competition is to rewarddoctoral theses defended during two previous years

• Around 50 candidatures per year

• http://www.cor.europa.eu• [email protected]



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CoR and AcademiaAteliers on Multilevel Governance

• key activity driven by the newly created CoR Cellule de Prospective

• gather academicians (around 60 contributors so far)around topics relevant for Multilevel Governance

• Five Ateliers realised since September 2008• The (new) concept of multilevel governance• The legal and political instruments of multilevel governance• Strengthening multilevel governance in key EU policy• Multilevel governance in a multipolar world• Fiscal federalism

• Helped to prepare the CoR White Book on Multi-level Governance(adopted by Plenary on 17 June) and its follow-up Action Plan

• http://www.cor.europa.eu/ateliers



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CoR and Academia

Open Days 2009: The University(in cooperation with DG REGIO)

• Bringing together academics on questions related toregional development, territorial cohesion and innovation.

• Working together with universities and associationsand networks specialised in the field such asthe Regional Studies Association or theEuropean observation network for territorial development and cohesion (ESPON)

• http://www.opendays.europa.eu



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Thank you for your attention

www.cor.europa.eu

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Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 11 Welcome to the Committee of the