Impact of EU accession for local government in Lithuania Egidijus BARCEVIČIUS Public Policy and Management Institute Lithuania

2 Relevant experience of PPMI Is providing training and consultancy services for the SF applicants, including the local level Was involved into a number of projects, related to strategy development and administrative capacity building at national and local level Was involved in evaluation of various EU funding programmes, ex-ante evaluation of SPD; including projects implemented at local level

3 Presentation themes Regional policy in Lithuania: an overview Impact of EU on the LAs – the pre- accession phase Impact of EU on the LAs during accession

4 Regional policy in Lithuania: an overview A rather centralised approach being pursued 60 municipalities: –Numerous “delegated” functions –Dependent on allocations from the state to implement these functions: some 45-70% of the budget –Some tension as the allocations claimed insufficient –Major investments almost entirely dependent on the state budget, with few exceptions 10 counties: –Governor appointed by the government –Financed from the government

5 Regional policy overview (2) Differences in economic development – large, and increasing: –GDP/ cap. (2002): Vilnius county 143,6% of national average; Tauragės county: 57,3% –Unemployment (2003): Vilnius 5,5%; Mažeikiai 21% Overall budgetary and HR capacity to influence local economic development – constrained –Overwhelmed with operational tasks –Some 75% of expenditure on education, social security and health (salaries and maintenance) –Administrative and HR capacity mixed

6 Regional policy overview (3) Regional policy still to be defined: –Law in place; yet the instruments list a number of plans to be designed –Ideology of identifying the disadvantaged regions dominates –Vision lacking, methodology unclear, measures patchy –Ministries taking different and unco- ordinated approaches

7 Assessing the EU impact on local government Not always concise, consistent and coherent Experience with pre-accession; early observations about the accession Obvious macroeconomic and regulatory impacts Influence thinking about the regional policy: –Regions “have to be” supported financially, regions are “active” in the EU –Emphasis on cohesion between or within member states? Opportunities for political representation at the EU level EU funding providing opportunities and inducing change

8 The early approach - decentralisation A number of financial support schemes –Infrastructure, CBC and soft investments Regional support scheme tried: the case of PHARE 2000 ESC –Aimed at preparing to implement the SF –Implemented in –Target regions identified –Grants provided for business and HRD applicants in the target regions –Management structures created at the regional level –Results: management capacity improved, though numerous complaints on bureaucratism and rarely a self- sustaining circle created at the project level

9 A turn towards a centralised approach EU changing its position in 2001 Centralised approach would be easier to manage and more efficient Sectoral rather than regional schemes in HRD, business support and tourism

10 Designing the administrative structure for the SFs A centralised model chosen –Programming at central level (SPD) –Sectoral investment priorities –Implemented by central agencies, with some deconcentration (local offices) Perceived advantages: –Better co-ordination –Lover costs –Management more efficient –Higher absorption

11 Implications – expected and not: programming Information rather than a genuine discussion Process very centralized and central gov. institutions hardly keen of burdening themselves with consultation LAs overwhelmed with operational problems Ministry of Interior (responsible for regional affairs): lacking vision and influence

12 Implications: the contents of the programme The official argument: some of the investment directions are of interest to the regions: –Local transport infrastructure –E&T for the unemployed and for the professionals –SME support, rural development support Regions as the horizontal priority: –Some evaluation grids give points (5-10 out of 100) for projects from disadvantaged regions ALA representatives – observers in the Selection Committees MoI offered project preparation support for municipalities

13 The local response Varied, but usually substantial endeavours at the local level: –Strategic plans developed, institutional change induced, investments into HR capacity encouraged, some local level co-ordination mechanisms created –But noticeable initial confusion regarding the SF process –The initial concerns regarding lack of funds for co- financing proved ungrounded –Complicated SF application and implementation process

14 The local response (2) Bigger municipalities - the most active and the most successful so far Opportunities for initiative from below: –NGOs and private sector active –Big players taking a clear lead Some controversy regarding the relevance of EU support and actual regional impact is to be expected

15 A turn around for ? Draft regulations for Decentralisation, simplification, partnership Time for operational programmes at regional level? Then, are the arguments for centralisation no longer valid? Institutions have the propensity to influence paths for further development

16 Summing up: learning from the accession Early involvement in various CBC programmes, participation in international networks proved useful Important to have a vision, to not become completely overwhelmed with operational- level issues Having a strategic plan does not mean pursuing a strategic approach Retaining the competent personnel is an obvious challenge

17 Summing up… Interest, support and involvement of the local authorities at the highest level is a necessity Adequate co-operation mechanisms at local level – important. Take time to achieve where an adequate culture is lacking SFs programming and implementation for will hardly be different, unless the LAs will start formulating its position now