1 One year EU membership - impact on regional development in Latvia Maris Pukis, Senior Adviser, Latvian Association of Local and Regional Governments

2 Is regional policy successful?  Measurement criteria: GDP per capita / Average GDP per capita for EU  For Latvia as one region Last place in EU Criteria is increasing  For internal regions of country Only for Riga and its neghbourhood results are positive

3 Sectoral approach  Latvia is one NUTS1, as well as one NUTS2 region  Concentration of EU Structural Funds management and of EU Cohesion Fund management in the Ministry of Finance  Neglecting of particular regional (NUTS3 scale) interests

4 Regional problems:  Permanent increasing of regional economic disparities  Permanent process of finance and institutional centralization  Absence of political structures, suitable for protection of regional interests. Existing structures are: Uneffective Conflicts facilitating  Neglecting of regional development plans  Attempts of State to abolish legal forms of local or regional government cooperation  Lack of marketable human resources  Lack of resources to maintain and develop basic regional infrastructure

5 Impact of EU on shifting distribution of competences  A new EU Constitution gives more precise distribution of competences  Too much competences are regarded as shared responsibility, therefore result is permanent decreasing of national responsibility  Preassure from the side of EU provocated to reduce regional and local competences  A tendency to develop EU as “State of welfare” leads to new attempts towards unification of legislation and institutional order

6 Impact of EU on shifting distribution of finances  EU integration is source for political centralization  Political centralization is source for financial centralization  Procedures of EU budgeting includes principle of concentration  Applying of the principle of concentration leads to neglecting of medium and small scale development projects  As a result system of financing are unsuitable for local and regional development

7 Judical solutions  Including of principles of subsidiarity and self- government in national constitution  Preparing of democratic amendments in the national laws

8 Political solutions:  Re-establishing of directly elected regional governments  Dividing of Latvia in several NUTS II regions  Changing of attention towards theory about local government as form of national government

9 Economical solutions:  Recognition of Individual income tax as local and regional government tax  Returning health care to regional governments and social care to local governments as competences of exclusive responsibility  Widening financial basis for self-governments by creating own resources for development, particularly – by reestablishing of access to capital markets  Preventing obstacles to Public-private partnership

10 Management solutions  Facilitating education and training of self-governments instead of introduction of new management solutions by legislation  Reduction of scope of legislative acts, diversification of management approaches  Reform of State Audit system towards performance audit  National program for facilitating of result-oriented management  Decreasing of number of controlling und supervisory institutions