Decentralisation of EC Competition Law Enforcement and General Principles of Community Law. Research Papers in Law, 4/2004

From the Introduction. By virtue of Council Regulation No. 1/2003, as of 1st May 2004 the full application of EC competition law will be entrusted to national competition authorities (hereinafter NCAs) and national courts. The bold reform of EC competition law enforcement adheres to the system of executive federalism1 which characterises the EC legal system. The repartition of competences within the Community allocates implementation of Community law mainly at Member States level. Pursuant to Article 10 EC, they are responsible for the implementation of the measures which have been adopted at Community level for the achievement of the objectives specified in the EC Treaty. Consequently, the attainment of the Community objectives depends very much upon the cooperation of national authorities, which act in accordance with their own national procedural rules.2 The various national procedural rules present themselves as conduits through which Community law is implemented and enforced. While as a rule Community law is not designed to alter national procedural rules, the Community legal order cannot afford to leave national procedural rules untouched when they are liable to hamper the effective application of Community law....For reason of space, this contribution intends only to highlight some aspects of Regulation No. 1/2003 with regard to which general principles of Community law are able to condition national procedural rules.

Ukraine: sovereign decentralisation or federalism without sovereignty? OSW Commentary No. 133, 18.04.2014

A key element of Russia’s policy towards the new government of Ukraine concerns demands for a constitutional reform that would transform the country from a unitary into a federal state in a way that would considerably privilege the eastern and southern regions. Such a change to Ukraine’s administrative system would enable Moscow to put pressure on Ukraine’s central government via the regions. In order to achieve its objectives, Russia has been pressuring Kyiv to establish a constitutional assembly in a form that would guarantee the endorsement of solutions dictated by Russia. In other words, Russia has been demanding, in what is practically an ultimatum, that Ukraine give up one of the fundamental sovereign rights of a state, the right to freely determine its system of government. Transforming Ukraine into a federal state is an unacceptable idea, primarily because the intention behind Russia’s demands is to undermine Ukraine’s sovereignty, both through the content of the proposed changes and the way in which they are to be implemented. However, keeping in place the current, centralist model of state governance is not a feasible alternative. Ukraine will have to grant its regions broad self-governance powers, including the power to hold local referendums, and to transfer a considerable portion of the prerogatives currently held by the state to the local self-governments, along with adequate financial resources. That is because decentralisation along these lines is the only way forward towards a modern democracy in Ukraine. Russia’s policy has forced Kyiv to undertake legislative work on constitutional reform as a matter of urgency, rather than waiting until a new parliament is elected in which the new, post-Maidan balance of political power will be reflected, as political logic would require. The first draft of the constitutional amendments (of which no details are known at this stage) is to be presented in mid-May, and is expected to come into force in early autumn. However, whether these plans can be put into practice depends on further developments in the eastern part of Ukraine, because (among other reasons) if a state of emergency is introduced, the constitutional amendment process will have to be suspended.

Under the veneer of decentralisation. Ukraine's modernisation efforts stall due to lack of local government reform. OSW Commentary No. 102, 2013-02-12

President Viktor Yanukovych and his Party of Regions have been repeating the pledge to decentralise power in Ukraine and to give local government a greater decision-making role ever since the party appeared on the Ukrainian political scene. The implementation of this reform is crucial both for the economic recovery of Ukraine’s regions and the overall modernisation efforts of the Ukrainian state. At present relations between central government and the regions are regulated by Soviet-era legislation that fails to address the modern-day challenges facing Ukraine. The political elite in the country, including the opposition, appear to have reached consensus on the importance of the decentralisation reform. The first attempts to implement changes in this area were made in the late 1990s, followed by a comprehensive reform programme developed between 2007 and 2009 by Yulia Tymoshenko’s government. In 2012, the Constitutional Assembly under the President of Ukraine appointed a team of experts who drafted a document detailing the reform of local government and the territorial organisation of power1. The document envisages the implementation of what effectively are two major reforms: (1) an administrative-territorial reform, which would help consolidate the fragmented administrative structure, creating larger and more economically self-sufficient administrative units, and (2) local government reform, focusing on creating clearly defined powers for local authorities with a view to securing government funding for specific tasks delegated from central government. Nonetheless, despite these measures, and in spite of the rhetoric coming from President Yanukovych and other members of the Party of Regions, it seems unlikely that the reform will be implemented in the foreseeable future. A series of concrete political decisions taken by the president over the past three years indicate that Yanukovych has not abandoned his plan to build a highly centralised political system. This in turn limits the capacity to govern of local authorities and further restricts the sources of funding for Ukraine’s regions. This apparent resistance to change stems from the fact that by implementing the proposed reforms, the president and his political allies would be forced to relinquish much of their control over the political processes taking place in the country and would have to free up the distribution of budgetary resources between Kyiv and the regions. The implementation of the reform within the specified timeframe (i.e. by 2015) is also unlikely due to the upcoming presidential election and the deteriorating economic situation in Ukraine. Without a comprehensive reform of local government, however, Ukraine will be unable to undertake effective modernisation measures, which are key for the socio-economic development of the country’s regions.

The Dynamics of Decentralization in Italy: Towards a Federal Solution? European Diversity and Autonomy Papers, EDAP/04 2013

This paper analyses the recent process of state decentralisation in Italy from the perspectives of political science and constitutional law. It considers the conflicting pressures and partisan opportunism of the decentralising process, and how these have adversely affected the consistency and completeness of the new constitutional framework. The paper evaluates the major institutional reforms affecting state decentralisation, including the 2001 constitutional reform and the more recent legislation on fiscal federalism. It argues that while the legal framework for decentralisation remains unclear and contradictory in parts, the Constitutional Court has performed a key role in interpreting the provisions and giving life to the decentralised system, in which regional governments now perform a much more prominent role. This new system of more decentralised multi-level government must nevertheless contend with a political culture and party system that remains highly centralised, while the administrative apparatus has undergone no comparable shift to take account of state decentralisation, leading to the duplication of bureaucracy at all territorial levels and continuing conflicts over policy jurisdiction. Unlike in federal systems these conflicts cannot be resolved in Italy through mechanisms of “shared rule”, since formal inter-governmental coordination structure are weak and entirely consultative.

Subsidiarity between Law and Economics. Research Papers in Law, 1/2005

From the Introduction. The present contribution is an attempt to raise awareness between the 'trenches' by juxtaposing the two approaches to subsidiarity. Subsequently, I shall set out why, in economics, subsidiarity is embraced as a key principle in the design and working of the Union and how a functional subsidiarity test can be derived from this thinking. Throughout the paper, a range of illustrations and examples is provided in an attempt to show the practical applicability of a subsidiarity test. This does not mean, of course, that the application of the test can automatically "solve" all debates on whether subsidiarity is (not) violated. What it does mean, however, is that a careful methodology can be a significant help to e.g. national parliaments and the Brussels circuit, in particular, to discourage careless politicisation as much as possible and to render assessments of subsidiarity comparable throughout the Union. The latter virtue should be of interest to national parliaments in cooperating, within just six weeks, about a common stance in the case of a suspected violation of the principle. The structure of the paper is as follows. Section 2 gives a flavour of very different approaches and appreciation of the subsidiarity principle in European law and in the economics of multi-tier government. Section 3 elaborates on the economics of multi-tier government as a special instance of cost / benefit analysis of (de)centralisation in the three public economic functions of any government system. This culminates in a five-steps subsidiarity test and a brief discussion about its proper and improper application. Section 4 applies the test in a non-technical fashion to a range of issues of the "efficiency function" (i.e. allocation and markets) of the EU. After showing that the functional logic of subsidiarity may require liberalisation to be accompanied by various degrees of centralisation, a number of fairly detailed illustrations of how to deal with subsidiarity in the EU is provided. One illustration is about how the subsidiarity logic is misused by protagonists (labour in the internal market). A slightly different but frequently encountered aspect consists in the refusal to recognize that the EU (that is, some form of centralisation) offers a better solution than 25 national ones. A third range of issues, where the functional logic of subsidiarity could be useful, emerges when the boundaries of national competences are shifting due to more intense cross-border flows and developments. Other subsections are devoted to Union public goods and to the question whether the subsidiarity test might trace instances of EU decentralisation: a partial or complete shift of a policy or regulation to Member States. The paper refrains from an analysis of the application of the subsidiarity test to the other two public functions, namely, equity and macro-economic stabilisation.2 Section 5 argues that the use of a well-developed methodology of a functional subsidiarity test would be most useful for the national parliaments and even more so for their cooperation in case of a suspected violation of subsidiarity. Section 6 concludes.

Unity stronger than divisions. Ukraine's internal diversity. OSW Point of View Number 40, March 2014

Ukraine is deeply divided internally, although as a result of the changes that have taken place since its independence, the country’s internal divisions now have less and less to do with territorial divides, and the split into historical ‘sub-Ukraines’ has become less pronounced, especially for the younger generation. Ukraine is not a country of two competing regional identities, one in the west, the other in the east. The western identity, in which the unity of Ukraine is a key value, coexists with the multiple and diverse local patriotisms of the different regions in the east and the south of the country. The present protest movement has consolidated the country’s sense of unity. Its opponents have also been championing the indivisibility of Ukraine, even while they demanded a thorough decentralisation of the country, which was often mistaken for separatism. Russia has been stirring up separatist tendencies in Ukraine, but with little success. Crimea is an exception here, because in most respects it has remained unaffected by the dynamics of the social processes transforming mainland Ukraine – separatist tendencies are indeed deeply rooted in the peninsula.

Kazakhstan: the regional success story; Tajikistan: a trial period; Uzbekistan: the major source of instability in Central Asia? OSW Study 15/2004

Kazakhstan: Kazakhstan can boast economic development like no other country in Central Asia. In contrast to other countries of the region, which have rich natural resources, Kazakhstan has managed to use its economic potential in a way that yields concrete benefits now and, at the same time, creates prospects for further sustainable economic growth. Tajikistan: Tajikistan in its present state has been built on the civil war experiences and provisions of the peace accords signed in 1997. These have had a great impact on the present form of the state, its political scene and power mechanisms. President Emomali Rakhmonov is the central figure in the state. The political system, which he has cocreated, is based on - unique in this region - political pluralism (the existence of the Islamic party), decentralisation (far-going independence of the regions and relatively limited potential of the central structures) and compromise as the basic way of resolving conflicts. Such a system has so far guaranteed stabilisation and normalisation of the country. Uzbekistan: With its geographic location, potential, ambitions and political priorities, Uzbekistan could play a leading role in Central Asia. The international community has perceived the country as the pillar of stability in the region. This perception was further reinforced after 11th September 2001 and was certainly among the factors that inspired the United States to start closer political and military cooperation with Tashkent. The administration in Washington had expected that closer contacts might galvanise political, economic and social change in Uzbekistan, thus reinforcing positive trends in other countries of the region as well. But the relations between Washington and Tashkent are in crisis (which the United States will certainly try to overcome), and we have seen rapprochement between Uzbekistan and Russia and China.

Efficient taxation of multi-national enterprises in the European Union. Bruges European Economic Policy (BEEP) Briefing 5/2003

Current arrangements for multi-national company taxation in EU are plagued by severe conceptual and administrative problems, leading to high compliance costs, considerable uncertainty and ample room for abuse. Integration is amplifying these difficulties. There are two possible approaches in designing an efficient trans-border corporate tax system for the European Union. The first is to consolidate the EU-wide operations of MNEs, using an agreed common base as the reference variable, and then to apportion this total tax base using some presumptive indicators of activity in each tax jurisdiction – hence, implicitly, of the likely benefits stemming from each location. The apportionment formula should respect requisites of neutrality between productive factors and forms of corporate financing. A radically different approach is also available that offers considerable advantages in terms of efficiency, simplicity and decentralisation, including full administrative autonomy of national tax authorities. It entails abandoning corporate income as the relevant tax base and taxing at a moderate rate some agreed measure of business activity such as company value added, sales or employment. These are the variables usually considered in formula apportionment, but they would apply directly without having first to go through the complications of EU-wide consolidation based on a common-base definition. Reference to a broad base, with no exemptions or deductions, would allow to set low statutory rates.

Can Policy Make Us Happier? Individual characteristics socioeconomic factors, and life satisfaction in Central and Eastern Europe. Bruges European Economic Research (BEER) Papers 22/November 2011

In the last decade, Central and Eastern European (CEE) countries have witnessed a rapid economic convergence vis-à-vis Western Europe. However, this rapid growth has not been matched by a similarly rapid increase in life satisfaction, which has remained low in the European context. This paper sets out to address this conundrum, by looking at the individual and macro-level determinants of individual life satisfaction in ten CEE countries. The results highlight that while Central and Eastern Europeans share the same individual determinants of happiness as people in the West (despite some significant cross-country variation), macroeconomic and institutional differences are the key factors behind the lack of convergence in life satisfaction. On the macroeconomic side, GDP growth is still a source of increasing well-being, but the happiness bonus associated with it is becoming smaller. The different levels of individual happiness in CEE are therefore mostly determined by institutional factors such as corruption, government spending and decentralisation, making policies aimed at enhancing institutional quality capable of bringing about substantial improvements in the overall life satisfaction of the people in the region.