Opinion on the role of the public authorities in the partnership (Article 4 of the Framework Regulation) (94/C 393/07)

On 22 February 1994 the Economic and Social Committee, acting under the fourth paragraph of Article 23 of its Rules of Procedure, decided to draw up an Opinion on the role of the public authorities in the partnership (Article 4 of the Framework Regulation).

The Section for Regional Development and Town and Country Planning, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 26 July 1994. The Rapporteur was Mr Masucci and the Co-Rapporteur was Dame Jocelyn Barrow.

At its 318th Plenary Session (meeting of 14 September 1994), the Economic and Social Committee adopted the following Opinion by a majority vote (one abstention vote).

1. Introduction

1.1. Article 4(1) of the Framework Regulation governing the Structural Funds, approved by the Council on 20 July 1993, states that:

'Community operations shall be such as to complement or contribute to corresponding national operations. They shall be established through close consultations between the Commission, the Member State concerned and the competent authorities and bodies - including, within the framework of each Member State's national rules and current practices, the economic and social partners - designated by the Member State at national, regional, local or other level, with all parties acting as partners in pursuit of a common goal. These consultations shall hereinafter be referred to as the 'partnership'. The partnership shall cover the preparation and financing, as well as the ex ante appraisal, monitoring and ex post evaluation of operations.

The partnership shall be conducted in full compliance with the respective institutional, legal and financial powers of each of the partners.'

1.2. This is one of the key innovations of the revised Regulations, in that for the first time the 'partnership' is to include the economic and social partners. The parties are to act 'in pursuit of a common goal' through 'close consultations'.

1.3. A recent ESC Own-initiative Opinion () dwelt on the identity and role of the partners, the levels and forms taken by the partnership, and the instruments of participation. However, these points were only considered in connection with the economic and social partners.

The present Opinion, in contrast, is based on the premise that the partnership and the close consultations - and hence the development philosophy which underpins them - can only work if the relevant public authorities at national, regional and local level are sympathetic and supportive, in both practical and formal terms.

The Opinion therefore seeks to assess the relevant authorities' attitude to the implementation of Article 4, by considering some cases which the Committee has learned about directly or via studies and research. In this way the Committee hopes to help make the partnership more successful.

1.4. The Committee offered its interpretation of this Article in the earlier Opinion. One reason why an interpretation was necessary was that the wording was the result of hard-fought negotiations between the Member States, which led to the amendment of the Commission's original proposal. Several aspects of the Committee's interpretation are useful for the purposes of the present Opinion:

1.4.1. Firstly, the reference to 'each Member State's national rules and current practices' does not exonerate any Government from consulting the economic and social partners, but simply concerns the way in which the consultations are conducted. And where no such rules or practices exist, this is the moment to establish them.

1.4.2. Secondly, the term 'close consultations' is stronger than 'information' or just 'consultation'. It means the involvement - in various forms - of the economic and social partners in the decision-making process, without prejudice to the fact that the final decision, at the appropriate time, lies with the relevant authorities.

1.4.3. Thirdly, the nature and breadth of these 'consultations' will vary according to the institutional, legal and financial powers of each partner. Moreover, while systematic consultation or the transfer of decision-making power to negotiations between the parties is conceivable where social policies are concerned, in the case of economic and development policies the role of the public authorities is clearly of a higher order than that of the social partners.

1.4.4. Fourthly, we are talking about a range of partners which includes not only trade unions and employers' organizations, but also organizations representing more specific sectoral interests.

1.4.4.1. These partners have differing arrangements for involving the interests which they represent; hence the partners at the various geographical levels cannot be designated automatically, as account must be taken of how representative they really are.

1.4.5. Fifthly, close consultation is envisaged at all stages of regional policy: preparation, financing, monitoring, and ex ante and ex post evaluation.

However, the economic and social partners can offer the greatest contribution at the preparatory and evaluation stages, and can play an important part in improving management transparency and informing and involving the public.

1.4.6. Lastly, the extension of the partnership to the economic and social partners reflects a change in the thinking behind Community regional policy, i.e. acceptance that development necessitates the synergic involvement of all the main interest groups.

This change is no coincidence - it is partly a reflection of the nature of the present recession, and of the difficulty of boosting competitiveness and employment in order to overcome it.

1.4.6.1. It is becoming increasingly difficult for large companies to boost employment as restructuring is making them less labour intensive. The aim of an annual 2 % increase in employment, mooted in the White Paper, can best be met by small and medium-sized firms, which play a vital role in the relation between growth and employment.

1.4.6.2. This need is reflected in the changing shape of regional policies over the last ten years. In the past, such policies focused mainly on attracting outside investment and companies.

Over the 1980s, a second generation of strategies came to the fore. These sought to promote endogenous resources and activities, in order either to reinforce existing local initiatives or to create new ones in such areas as infrastructure, small businesses, the cooperative and non-profit sector, cottage industry, and general services.

1.4.6.3. More recently, the tendency has been towards a fusion of the two earlier strategies, combining the promotion of internally generated development with efforts to attract incomers and inward investment using new technologies. In other words, internally generated development is fuelled by externally generated development and is not just a local matter, as it fits into the national economy and the Community's internal market.

These third generation strategies are thus designed to enhance the business environment and communications, as well as upgrading human resources and stimulating new entrepreneurial skills.

1.4.6.4. The development of local economies, which has become a key plank of regional policy, requires the decentralization of public structures, decision-making processes, and expenditure. The Presidency Conclusions of the Corfu European Council of 24-25 June 1994 also stress that local development initiatives are an essential element of the new model of development mentioned in the White Paper ().

2. Some case studies

2.1. Regional policy studies have tended to focus on the role of the social partners and to refer only indirectly to that of the authorities. They have often demonstrated the conditions under which the social partners can influence the action of the authorities; but they have not shown how influential or effective the various tiers of public authority might be in the implementation of regional policies or in securing one type of results rather than others.

2.1.1. This chapter describes the situation in certain regions of the EU. Some of the instances mentioned are positive, others negative; clearly they are not exhaustive, nor indicative of the country as a whole, as the situation in the larger Member States is extremely complex and sometimes unclear. However, enough is known to enable us to pinpoint general problems.

The regions concerned are in the UK, France, Italy, Germany and Spain. They thus span the whole institutional range from centralized State to federal State, via the limited regionalism of France and the more pronounced regionalism of Italy.

2.2.

UK

2.2.1. The ESC Opinion on the fourth annual report on the implementation of the reform of the Structural Funds (1992) (Rapporteur: Mr Little) () cites a statement made by a UK Government representative during a visit to Scotland.

2.2.1.1. It transpired that the UK Government does not intend to designate as formal partners either trade unions or employers, and that they will not be invited to participate in the working committees and monitoring committees.

Only representatives of the development agencies and bodies of the various regions will be formally involved in the elaboration and implementation of regional policy, because these are the only parties deemed to have the necessary knowledge and experience.

2.2.1.2. In Scotland too, the Government has turned down a formal request from the trade unions to be involved in consultations on the use of the Structural Funds.

2.2.1.3. Nevertheless, the lobbying by the social partners has had some effect. At the same meeting it was announced that the Government has agreed to hold informal discussions with the social partners on the operation of the Structural Funds.

2.2.2. The situation in South East England shows the important role which the public authorities play in EU structural policies in both a positive and a limiting sense.

2.2.3. The South East of England is an imprecise region to identify. In geographical terms it covers an area from Oxford to Dover. In planning and administrative terms it consists of the region of Greater London and a separate region of the South East covering the counties of Kent, East and West Sussex, Surrey, Hampshire, Isle of Wight, Berkshire, Oxfordshire, Buckinghamshire, Bedfordshire, Hertfordshire and Essex.

2.2.4. There is no elected authority representing the whole region and London. In London the strategic body, the Greater London Council, was abolished in 1986, though some coordination matters now rest with the London-wide committees of locally elected bodies, the 32 boroughs (plus the city of London). One of the most active of these is the London Planning Advisory Committee (LPAC).

2.2.5. In the rest of the South East there is little coordination of the two-tier local government system and the many other government and non-governmental bodies. For the whole of the South East there is SERPLAN, the London South East Regional Planning Conference, an association of elected representatives from local authorities with a planning remit. The body has no executive powers. There are currently two associations of London local authorities.

2.2.6. The main central government departments associated with local government and economic development, the Department of the Environment, Department of Employment and the Department of Trade and Industry had separate regional structures. Critics often pointed out that they did not effectively coordinate the myriad of regional and sub-regional development programmes. In 1993 the UK government recognized that the delivery of its policies, particularly in the field of urban regeneration, lacked cohesion and decided to unify the regional structure of administration. It put the government agencies under the authority of one regional civil servant, a regional controller which took effect in April 1994. This unified the departments responsible for the management of European Union structural funds, though as yet there is little difference in the way they are administered. The South East is still divided into two regions.

2.2.7. For European Structural Fund purposes the partnership of bodies in the South East has not been extensive because the main UK areas which qualified for Objective 2 funding were in the North, Wales and Scotland. The exception is that London received some Article 10 funding in 1989 which was monitored by a partnership between local authorities and central government. The other exception is the Social Fund (Objectives 3 and 4) to which many South East authorities successfully applied. Local authorities, representatives from the voluntary sector, higher education and from government schemes sit on the national monitoring committee. South East representatives participate, such as one officer representing the two London associations of local authorities. As in most UK partnerships, central government civil servants take the lead by chairing the committee, providing the secretariat and setting the agenda. It is generally thought that the dialogue between the partners and central government is minimal. The size of the national committee is often considered to be very large, but this is necessary to ensure all types of representatives can participate.

2.2.8. Since 1993 some parts of London have become eligible for Objective 2 funding. New partnerships contribute to the Single Programme Documents (SPDs) which are approved by the Commission. The partnerships now include a wider group of representatives. The monitoring committee in the East London Lee Valley initiative includes the six local authorities involved, the three local training agencies, local development agencies, two business groups, the local government associations, representatives from the voluntary sector and higher education. The local unions are not represented. Local authority representatives are officers rather than elected people.

2.2.9. Another example is the Isle of Thanet area in the South East region, which has as partners local authorities, East Kent Initiative (private sector), higher education, the Tourist Board, the voluntary sector, a water company, English Nature and the Kent training body. Again the trade unions are not represented. The partners have a role in drawing up drafts of the documents, but the final programming document is approved by the government department. The committees meet at six monthly intervals.

2.2.10. The final example of partnership is the Kent and Nord-Pas-de-Calais's cross-border project (INTERREG). The national partnership is mainly based on local authorities with central government and Commission representatives. There is also a joint committee composed of partners from Nord-Pas-de-Calais and separate working parties.

2.2.11. With the reform of the funds the government has simplified their administration. Whereas there were committees monitoring the CSF, then operational programmes governing smaller areas, now there is one programme committee associated with the special programme document. Local authorities argue this presents less opportunity for effective partnership, strengthens the centrally run secretariats and prevents sub-programme areas developing strategies.

2.2.12. Any form of regional coordination is going to be hard in the complex political and economic geography of the South East. As not much of the area is eligible for funds, the opportunity for building a regional European strategy is limited. However, in terms of the application of Article 4, there are monitoring committees in the programme areas and these involve most local actors, including local business and the voluntary sector. Trade unions, which have been deprived of their tripartite role by the government since 1979, are not partners. Even though there are examples of good partnerships, there are limits to the extent partners can shape decisions. Central government civil servants, responsible to ministers, chair the committees and set the agendas.

2.2.13. Partnership in the UK is also constrained by the absence of an elected tier of regional government and the transfer of functions away from elected local bodies to unelected agencies. The result of the highly complex sub-national structure is to make the coordination of policies, and thus partnership, difficult to achieve, leading to a loss of transparency.

2.2.14. The absence of a regional authority appears to complicate matters in three ways:

- firstly, it could overburden the national authorities, who are unable to keep close, constant, systematic tabs on the implementation of Community assistance;

- secondly, the creation of quango-type bodies produces a plethora of poorly coordinated and often overlapping agencies, making it difficult to plan and implement policies in a targeted manner;

- thirdly, the public is generally denied any say in the organization of their region, as not only are the socio-economic organizations excluded, but often also other interest groups, and even the local authorities.

2.2.15. The first lesson to be drawn from this is that systematic, effective participation in EU regional policies requires non-fragmentary administrations and institutions, with fixed responsibilities for identifying key problems and objectives. And to facilitate the achievement of Community objectives, these institutional bodies should ideally be in close touch with the socio-economic circumstances of the target area.

2.3.

France

2.3.1. As France has only introduced regionalized institutions in recent years, and has done so cautiously, the powers of the French regional authorities are limited. At the same time, France's administrative structure is rather complex and it is difficult to ascertain the precise breakdown of responsibilities and duties between regions, départements, and towns.

2.3.1.1. The changes introduced in the 1980s were undoubtedly a step forward, even though constitutional and other experts tend to feel that the French regional authorities generally enjoy fewer powers than their counterparts in other countries. The democratic credentials of the regions have undoubtedly been reinforced by the advent of universal-suffrage elections. However, the French system does not give the regions constitutional importance.

2.3.2. It should also be noted that the institutional reform enacted in 1992 gave a fresh boost to the role played by the regional and local authorities in economic and social measures. It makes the interlinkage of local authorities the main instrument for decentralized economic measures.

2.3.2.1. However, structural policies remain a mixture of programmes and other ventures in which the region is constrained by the objectives and methods laid down by central government. Despite attempts at reform, administrative organization remains extremely hierarchical. And the economic ministries' main concern is to lay down rules that are uniform. It is significant, for example, that the regional authorities are directly responsible for only 10 % of expenditure on training.

2.3.3. France's decentralized administrative structure includes important bodies with socioeconomic duties, namely the regional economic and social councils. These councils, made up of representatives of the institutions and the social partners, have some responsibilities in the implementation of Community structural policies. However their powers are limited, as the councils are advisory rather than actually shaping policy.

2.3.3.1. This limitation is widely regretted, as the councils are felt to possess considerable potential and specialist knowhow. As things stand, the councils run the risk of being confused with other local bodies involved in economic programmes and actions of various types. Hence they are unable to provide more than a discussion and information forum for the parties concerned, and this is not enough.

2.3.4. However, there are a few cases (for example in the French region of Hainaut, an Objective 1 region) in which firms have been involved in 'close consultations' on the preparation of the CSF. The channel for this has been the chambers of commerce, which have been involved in the full and the select steering committees and are felt to have played a useful part in shaping the final programmes. This is a small but encouraging step forward.

2.3.5. Although the French administrative structure is more elaborate than the English one, it still bears signs of the centralist tradition. The planning and successful implementation of structural policies depend to a large extent on the technical capacities of the central authorities, as it is they who are the driving force behind programmes and decisions, and they who enlist local bodies to help them define problems and achieve objectives.

2.3.5.1. The advantage of this type of administration is that it is results-oriented and may, under the right conditions, make for effective Structural Fund assistance. These conditions are not always present because they are linked to the degree of awareness of regional socio-economic conditions. The central authorities can thus foster better results by using decentralized institutional machinery to monitor key programmes, problems, and opportunities.

2.3.5.2. In conclusion, although French regional policy is centralized, it does provide for some contact with both the local authorities and the socio-economic organizations. However, the practical arrangements and the account taken of needs and views are purely discretionary, and at all events remain far removed from the spirit of 'close consultation' enshrined in Article 4.

2.4.

Italian 'regional pacts'

2.4.1. It should first be noted that the Italian Government accepted the trade unions' formal request to apply Article 4 properly and fully.

2.4.2. Although relatively recent, the Italian regional system is more structured than that of France or the UK. The 'ordinary' regions were established in 1970, alongside other 'special status' regions which enjoy greater regional autonomy.

2.4.3. Attempts - still at an early stage - have recently been made to give local bodies a greater role in development policies.

One such attempt, which is worth mentioning because it is a new departure, takes the form of 'regional pacts' developed thanks partly to the promotional work of the National Economic and Labour Council (CNEL), the consultative body representing the social partners.

2.4.3.1. The pacts have focused on the southern regions of Italy, i.e. those suffering the greatest development lag. Since the winding up of the Cassa per il Mezzogiorno (a fund which provided additional resources to support projects in the south, termed 'special assistance'), these regions have found it more difficult to obtain national funding.

2.4.3.2. The new arrangements are designed to plug this gap by identifying development projects which cover cohesive areas and can involve dynamic groups, organizations and bodies in the promotion of new initiatives.

2.4.4. The 'pacts' have generated a regionally based assistance system which works as follows:

- designation of a local 'locomotive' body which undertakes to organize planning and implementation. This may be the public authority (as is the case in Vicenza, in the Veneto region) or a trade association or other interest group (trade unions, employers, environmentalist groups, etc.) as has occurred in Brindisi, one of the main examples of a 'regional pact';

- a regional survey, with canvassing of local administrative officials and economic operators;

- organization of a forum of interested parties to decide the features and priorities of the project;

- launch of the project proper. The parties formalize the pact and set about implementing it.

2.4.5. The target area of the pact is decided as follows:

- selection of a subregion of acceptable size (e.g. about the size of an Italian province);

- identification of a problem (infrastructure networks, technological innovation projects, etc.) and of the local bodies which are in a position to solve it.

2.4.6. The schemes are at an early stage but are undoubtedly promising, although some hurdles still have to be overcome.

2.4.6.1. Finance is one problem area, as the groups which join forces to draw up the pact lack the requisite economic resources.

2.4.6.2. The results are not always up to expectations, as the projects do not always manage to create new development and employment opportunities.

2.4.6.3. However, more important for our present purposes is the fact that dealings with the public authorities pose the major problem. A recent CNEL forum identified the role of the local authorities as a particularly weak link.

2.4.6.3.1. Most of the regional pacts have been spearheaded by the social partners, especially the trade unions and the regional employers' organizations.

As a rule the local authorities have played only a passive role and have not been a locomotive of the pacts. In some cases, they joined them after a project had already been defined.

2.4.6.4. There is also uncertainty about the appropriate level of public-authority involvement: Regional authorities? Provincial authorities? Local-authority associations?

Even when specialized administrative bodies exist, things do not necessarily run smoothly. Sicily is a case in point, despite the existence of a regional economic and social council which is supposed to provide active back-up for the work of the social partners.

2.4.6.5. This probably means that the culture and organizational capacity of the Italian public authorities are just as important as their institutional powers and legal framework.

2.5.

North Rhine-Westphalia (Germany)

2.5.1. This is a particularly important example, not only because of the economic importance of North Rhine-Westphalia but also because the consultative mechanism which underpins regional policy is so highly planned and structured.

2.5.1.1. With 18 million inhabitants, North Rhine-Westphalia is the most highly populated Land in Germany. It produces 25 % of the country's GDP, contains 40 of Germany's hundred largest firms, and accounts for 25 % of national exports.

The decline of the steel industry has meant continual restructuring. The Land accounts for 50 % of German applications for Objective 2 assistance and takes up the bulk of aid under the Community's RECHAR programme.

2.5.2. Thanks partly to pressure from the social partners, regional structural policy is consensus-based. To this end, the Land has been subdivided into 15 regions based on the districts covered by the chambers of commerce and industry.

The definition of regional policy is extremely broad. Alongside the core areas of restructuring of industry, services, agriculture and tourism, equal importance is given to such considerations as social justice, environmental development and equal treatment of men and women.

2.5.3. The parties involved in the pursuit of consensus are the local authorities, representatives of trade and industry, unions, environmental associations, the voluntary sector, women's organizations, and other associations.

2.5.4. Regional conferences have been set up in all regions. They are subdivided into special committees, each headed by a person who participates in the consultations. Managerial groups have also been set up to prepare further work, more especially the preparatory work for drawing up a regional development blueprint.

2.5.5. The process is an open one with a limited formal structure. The many problems, which have to be tackled as they arise, include:

- how to fit this process and all these participants into an existing legal structure without changing it;

- how to involve the public by ensuring proper representation;

- involvement of town and local councillors;

- the public authorities' response to this self-organization process;

- the availability of trained staff within the trade unions.

2.5.6. The development blueprint is drawn up in several stages:

- analysis of the economic structure, the labour market and existing infrastructure;

- drawing-up of key projects for the region as a whole;

- identification of key guidelines for the region's development.

2.5.7. Finally, a blueprint is produced for each region which is politically although not legally binding, as the Land Government cannot reject it without justification and is required to provide financial support for the ensuing programmes.

The development blueprints are adopted by the regional councils and the bodies representing the associations before being sent to the Land Government where a special committee draws up an opinion on them.

The procedure is thus an open one which in its final stage involves the Land Parliament.

2.5.8. This exemplary model for consultation has been in a pilot stage for several years and has proved its worth, although it does raise a number of problems. It is also a highly specific case, within a context where the individual Länder have undoubtedly reacted more positively to Article 4 than has the Federal Economic Minister, who has appeared rather reticent on the subject of 'close consultations'.

2.6.

Spain

2.6.1. In Spain, the national authorities have hitherto taken an extremely centralizing approach to regional development policies.

However, there are legal bases for involving the social partners, and they do take part in special forums concerning specific areas of social policy.

2.6.1.1. The legal bases lie both within the Spanish Constitution (Articles 7 and 28) and in the Organic Law on trade-union freedoms [Article 6(3)].

These enable the social partners to participate in any areas of socio-economic life decided bilaterally with the various tiers of public authority.

2.6.1.2. Apart from the bilateral relations established between social organizations and the public authorities, there are a number of statutory bodies in which the social partners can participate effectively. They include the General Vocational Training Council, the General Council of the National Employment Institute, and the Economic and Social Council.

The relevant committees generally operate at regional level, but sometimes also at province level.

2.6.2. The Spanish legal system facilitates the use of a consultation system. This is because it shares responsibilities between the national authorities and the decentralized ones (the autonomous communities and the local authorities). The breakdown is the same as for the Community Support Frameworks, as the CSFs for each Objective are subdivided into a multiregional CSF which is the responsibility of the national authorities, and regional CSFs which are the responsibility of the autonomous communities.

The decentralized authorities are already beginning to act independently.

2.6.2.1. The Andalusian authorities wish to instigate a consultation process, at least in formal terms, founded on an agreement between the autonomous community, the trade unions and the employers' organization.

The goodwill shown by the Andalusian authorities does not seem to have rubbed off on the national authorities as regards the central funds allocated to Andalusia (with the exception of Social Fund finances, especially Objective 4).

This suggests that the participation process is incomplete and fragmentary even within a single region.

2.6.2.2. Mention should also be made of the community of Valencia, where the authorities have recently, together with the trade unions, organized a forum with local authority representatives to discuss decentralized regional development.

It emerged that there was a chronic lack of information about Community regional policy mechanisms, especially Article 4.

This initiative is a new and extremely encouraging departure, because it applies the partnership (which should be extended to all the relevant socio-economic representatives) to the substance and objectives of regional development, with employment as its first concern.

2.7.

Comments on the situation in Belgium, Greece, the Netherlands and Portugal

2.7.1. No detailed scientific surveys are available on the smaller Member States, even though they are interesting for a number of reasons (administrative structures, ethnic splits, autonomous areas). The main surveys of participation in regional policy have looked at the larger Member States (in terms of both population and area) - France, Germany, Italy, Spain and the UK.

A recent survey by the European Trade Union Confederation provides some indirect information and ideas, although it focused on the role of the trade unions and did not dwell on that of administrative bodies.

2.7.2. Some pointers emerge concerning Objective 2 regions of Belgium (Liège, Hainaut, Aubange).

The report, which covers the period 1989-93, focuses on the flow of information to the social partners and the extent of their participation. While they are well informed of regional development plans, they feel that the national and regional political and administrative authorities take little heed of their views and are not supportive of participation in the shaping of regional policies. The social partners were not involved in the discussion and selection of operational programmes. This was left to the region's political authorities, who did not give sufficient encouragement to 'close consultations'.

The report also notes that the social partners often only receive information after decisions have already been made.

2.7.2.1. The report also mentions the potential role of the Wallonia economic and social council as a consultation forum, but notes that it is hamstrung by the regional authorities' failure to encourage maximum involvement.

2.7.2.2. Mention is made of an interesting experiment in Turnhout whereby members of the monitoring committee meet prior to the framing of development programmes for an 'advance consultation' which enables them to hammer out a preliminary position on the objectives to be achieved.

However, the report also mentions shortcomings in information, and in particular 'poor communication' about the progress of the programmes launched by the Commission. The trade unions feel that more regular information and monitoring would facilitate matters for the Flemish public authorities. They recommend that the Commission give the regional authorities and the social partners regular progress reports.

2.7.3. Similar comments apply to Greece. The report stresses that the social partners were not involved in the preparation of the plans between 1989 and 1993. It attributes the unsatisfactory preparation and implementation of the plans to the inadequate institutional arrangements for development planning. For example, the way that planning services are clustered in the national Economic Ministry is inappropriate.

2.7.3.1. Poor consultation is felt to be partly the result of organizational problems and lack of technical back-up for the public regional bodies. It is noted, for example, that the regional councils receive only incomplete information. The report deems it vital that a technical department be set up within the Commission to provide regional authorities with the technical back-up which they need in order to prepare the plans.

2.7.3.2. As in other countries, the main problem seems to be how to activate the development potential of each region and find institutional channels for mobilizing local resources and for securing a full commitment from the public authorities at both national and regional level. To this end, the report proposes the establishment of development associations at regional level, comprising members of the central and local authorities and representatives of private business.

2.7.4. The report also highlights dissatisfaction and problems in the South Limburg region of the Netherlands. Programmes supported by the European Social Fund are carried out under the aegis of the regional employment commission, to which the social partners belong. Despite this, their involvement - especially on the trade union side - is unsatisfactory.

2.7.4.1. Programmes supported by the regional development funds are conducted by a special committee (the European Stimulation Programme for South Limburg), on which the public authorities and chambers of commerce are represented. Here too, there is criticism of the inadequate involvement of the social partners.

2.7.4.2. In this case the failure to launch close consultations is not due to technical problems or insufficient administrative decentralization, but rather to what might be termed a 'technocratic prejudice'. The public authorities are unwilling to hold more consultations because they prefer decision-making to be swifter and less cumbersome (involving fewer, more technically qualified parties).

2.7.5. In Portugal, regional decentralization is not the key factor in the implementation of the partnership principle.

This is because the whole of Portugal is an Objective region for Structural Fund purposes. Hence the question of the partnership principle arises chiefly at national level.

2.7.5.1. Consultations on the regional development plan, and more especially on the setting-up of such aid schemes as PEDIP (specific programme for the development of Portuguese industry), had raised hopes that the Government would be more willing to involve the economic and social partners in the implementation of the Community Support Framework (CSF).

However, such hopes seem to have been dashed by the wording of the CSF approved by the Commission, and by the legislation providing for a coordinated structure covering management, monitoring, evaluation and checks on the implementation of the CSF.

2.7.5.2. The involvement of the economic and social partners in the CSF is limited to a vague statement that they will be 'involved in the monitoring of the CSF within the framework of current rules and practices in Portugal'.

National legislative provisions do not match up to the framework created or the expectations raised by the Government. In the Committee's view, the provisions for involvement of the economic and social partners do not constitute proper application of the partnership principle. Partnership will not be achieved by the units which, together with Commission representatives, are responsible for the monitoring and assessment required under Community regulations.

However, mention should be made of one laudable exception which shows greater receptiveness to the economic and social partners and can be seen as a move towards regional decentralization. This is the newly created possibility for representatives of regional business associations to participate in the management units of one of the sub-programmes of the operational programmes.

3. The problems to be tackled

3.1. In the Committee's view, the priority objectives for Community regional policy during the 1994-1999 programming period will flow from the present economic situation and the new partnership described in Article 4. These objectives are:

- to maximize employment;

- to carry out 'close consultations'.

3.1.1. These objectives are precisely those of the White Paper, which makes the planned jobs conditional on 'political and social partner agreement' () concerning pay and the labour market. In line with these objectives, regional policy should thus be seen:

- as a combination of local (internally generated) development and an outside (externally generated) contribution;

- in the widest possible sense, giving equal weight to productive investment, investment in services and infrastructure, and social and environmental aspects;

- as a consensual process which brings together all parties involved in development.

3.1.2. Two factors are crucial to such a policy:

- decision-taking bodies near the local level;

- synergy with the socio-economic organizations.

3.1.3. This approach reveals the limitations of purely technocratic management by agencies and quangos which, even where they are present at local level, do not generally consult the social partners and sometimes even bypass the local authorities. It also shows the limitations of channelling the socio-economic partners' involvement through non-specialist bodies such as the economic and social councils, whose representatives are normally delegates with no direct local involvement. These councils tend to play a strictly advisory role and do not help to create synergies which would enhance local development.

3.1.3.1. Although technocratic instruments were useful when the aim was to attract new businesses, or to attract new resources to restructure established businesses, they no longer suffice when the aim is to create even one new job. Hence a managerial approach to development should be complemented by an analysis of needs, a survey of local resources and capacities, and the galvanization of the general public.

3.2. North-Rhine Westphalia has undoubtedly adopted a more systematic approach than the other areas covered by the national and regional case studies of chapter 2. However, given the wide variety of institutional and administrative systems in Europe, it is not the Committee's intention to propose models but rather to encourage the swapping of information and experience.

3.2.1. In any case, no system is without its disadvantages, and a complicated system causes difficulties and delays even in a well-established cultural framework such as the one just mentioned.

And if it is grafted onto an underdeveloped base, any consultation system will prove complicated.

3.2.2. Two initial conclusions can be drawn from the above:

- that each country, region or area must select a consultation system geared to its particular socio-economic features;

- that if the system is not to cause delays, it must permanently address all development problems, and not just the deployment of the Structural Funds.

A region with an efficient consultation mechanism for development issues would undoubtedly be better able than others to tackle all economic situations.

3.3. Studies and analyses, particularly those conducted by legal experts, have laid special stress on the structure of regional decentralization in the different countries. Member States' customs and practices vary, partly because of their differing sizes and total population. Some accord the regional authorities considerable powers, while others are more centralist.

3.3.1. These are highly sensitive and complex matters, and they have both political and institutional implications. In some countries they are the subject of lively debate. The partnership principle is a central issue here, but it must not be made a political football.

3.3.1.1. At all events, the Committee is not impervious to the subject of decentralization. The establishment, under the Maastricht Treaty, of the Committee of the Regions proves that it is an option which also enjoys the support of the Member States.

The regional authorities' greater amenability to the implementation of Article 4, in contrast with the wariness displayed by the national governments, is further proof that decentralization reinforces democracy and participation.

3.3.1.2. Experience has shown that regional political powers can help to galvanize endogenous potential, particularly if a Member State is above a certain size.

3.3.2. The sheer variety of political and administrative structures makes alignment of Member States' institutional channels inappropriate. However, building on their special features and public policy traditions, these channels can be organized in a way which ensures that structural policies are not implemented in a piecemeal, fragmentary fashion.

Hence it is not necessarily the case that in all Member States the reference unit will be a regional authority with significant powers and specialized bodies attached to it. In some of the smaller Member States, the reference unit should comprise several smaller areas with a similar economy, rather than being based on administrative rules and boundaries. In such cases, where there are no precise administrative divisions, the focus should be on support for local economic activities.

3.3.3. Small local authority areas tend to have an inadequately diversified economy and suffer from a lack of administrative staff. Here the problem is to identify areas which are large enough to provide the critical mass needed for development, and to set up intermediary coordinating bodies which can liaise between their local authorities.

3.4. A second problem is the 'environment' (institutional and otherwise) which nurtures economic development and makes it possible.

3.4.1. Social studies show that certain areas (some very large, but some very small) offer better conditions and opportunities for carrying out projects and making effective innovations.

Although efficient public authorities are of assistance, the projects are not coextensive with regional authority areas as a variety of factors come into play: infrastructure networks, the presence of business services, involvement of the local authorities, social service networks.

3.4.2. The prospects of success are therefore better in areas where the authorities play a regulatory role which ensures that the different parts of the network operate smoothly. Such conditions are found in some very large regions (i.e. larger than a regional authority area) and also in certain industrial or manufacturing districts which have a particular economic specialization and which are usually quite small (they could be termed 'sub-province' areas).

3.5. A third and final problem concerns the quality and adequacy of the public and administrative machinery for implementing Community regional policies.

3.5.1. This problem, which has been little researched, is not a matter of whether or not rules on decentralization exist, but of how the rules are interpreted and applied in practice. Achievement of structural policy objectives depends to a large extent on this factor, which in turn depends on public authority traditions of efficiency.

3.5.2. The public authorities are often perceived as lacking a real commitment to these policies, as being concerned only for economic benefits and neglectful of the practical input needed, and as being poorly equipped or lacking the broader 'administrative culture' or tradition of 'social dialogue' needed to administer these processes properly.

3.5.3. In such a context, regulations are not the answer. The solution is to encourage the public authorities to become more efficient and more results-oriented, to recruit skilled staff, and to improve staff specialist knowledge of regional policies.

3.5.4. However, the efficiency of a local or regional authority is often as much the result, as the cause, of a region's low level of development.

4. Conclusions

4.1. Although it can only base itself on limited analyses of a few of the wide variety of schemes, the Committee feels that it can safely say that full application of Article 4 requires three things from all tiers of the public authorities:

- firstly, the political will to implement the Article. This presupposes an awareness of the general benefits of a consultation process in the framing of development policy, and an awareness of its particular benefits for competitiveness and employment in a time of economic recession;

- secondly, the existence of a culture of participation and social dialogue;

- thirdly, allocation of responsibilities and resources at all administrative levels, and the technical ability to organize participation and steer it towards the desired objective.

4.2. It should be stressed that the first of these requirements is not just a matter of a positive or a negative political will, but of much wider shortcomings:

- a simple lack of attention to, and familiarity with, Article 4 on the part of the decentralized authorities;

- and/or a strictly formal acceptance and implementation of Article 4 which fails to trigger the necessary synergies. It may be symptomatic of a failure to understand the nature of the consensual process required, or it may simply mean that appropriate technical and political instruments are lacking.

Clearly each case much be assessed individually and in depth - even where things seem to be satisfactory - in order to establish what steps are needed (political, or improving information, or technical).

4.3. A culture of participation is less widespread than appears.

There is a marked tendency not to distinguish between information, general consultation, and the 'close consultations' enshrined in Article 4. Close consultations are a dynamic process conducted in the field, and not merely a one-off event.

4.3.1. Close consultations also differ in their purpose, as is clear where a technocratic conception of regional development prevails, whether it comes straight from a centralized authority or is delegated to an agency or quango.

Such bodies often show a quite sensible interest in the views of the representatives of local authorities and specific interest groups (not generally the social partners). However, this really only amounts to a judicious means of gathering information in order to flesh out or support an existing framework.

The true purpose of consultation, in contrast, should be to bring together and reconcile differing needs and factors. In other words, it should mean a real political dialogue.

4.4. Although a positive political will and a culture of participation are vital, they are not enough on their own. If the physical capacity to organize a consultation process is lacking, then nothing will be achieved.

Participation should take place at all stages of Community regional policy, from the planning stage through to assessment, and the present Opinion views participation as a process.

4.5. It is obvious that this type of regional policy will be easier to implement in an institutional framework based on decentralized political and administrative authorities with significant powers and resources. However, the Committee feels that the absence of such conditions (and in the smaller Member States there may be good practical reasons for this) is no excuse for inaction. The crucial factor is the three requirements mentioned above.

4.6. In the Committee's view it is the task of the Commission to ensure that the Structural Fund Regulations - including Article 4 of the Framework Regulation - are complied with in full. Any programme part-financed by the EU should be accompanied by a declaration from the Government concerned, specifying the partnership arrangements.

4.6.1. In view of the wide variety of participation arrangements, it is important that the Commission should bring them to the attention of the regional and local authorities, and encourage these authorities to discuss their experience with them.

It is not enough to mention participation arrangements in the annual reports submitted under the Regulations (where such arrangements do not receive adequate mention anyway). Forums, seminars and conferences need to be organized.

4.7. Both the Commission and the national authorities need to provide the local authorities with much more information on the meaning and scope of Article 4. At present such information is woefully inadequate. They should also arrange training courses for public officials at all levels, on the political and technical aspects of the consultation process.

4.8. The Committee asks the Committee of the Regions to examine joint initiatives on the partnership procedures, for submission to the national authorities and the Commission. The Committee is also interested in the COR's stance on this.

4.9. Finally, the Economic and Social Committee would reiterate the undertaking it made in the conclusions of its Own-initiative Opinion on the involvement of the socio-economic partners in Community regional policy (); the Committee intends to keep a close eye on the implementation of Article 4 by regularly monitoring the steps taken by the authorities and the progress made.

Done at Brussels, 14 September 1994.

The President

of the Economic and Social Committee

Susanne TIEMANN

() OJ No C 127, 7. 5. 1994.

() 'The European Council considers that local development initiatives offer considerable potential for reinforcing the economic and social fabric of the European Union and for creating jobs. They are an essential element of the new model of development mentioned in the White Paper and will help to preserve cultural diversity within the Union'. Presidency Conclusions of the European Council at Corfu, 24-25 June 1994, page 8.

() OJ No C 195, 18. 7. 1994.

() White Paper on Growth, competitiveness, employment (page 146, Point 8.8a).

() OJ No C 127, 7. 5. 1994.