AER Summit on the Crisis and the Regions

Pescara, Italy, 21-22 September 2012

“Facing the crisis: The regions are part of the solutions”

Speech by Herwig van Staa, President of the Chamber of Regions of the Congress of Local and Regional Authorities of the Council of Europe

Mr Chairman,

Excellencies,

Ladies and Gentlemen,

Dear colleagues,

It is a great pleasure for me to speak at this Summit as President of the Chamber of Regions of the Congress of Local and Regional Authorities. Our Congress and the Chamber of Regions enjoy close ties of co-operation with the Assembly of European Regions, and we are acting in synch in matters of common concern for our regional communities. This Summit is yet another proof of it: only in March this year, the Congress itself held a plenary debate on the impact of the crisis on local and regional authorities.

It is not surprising, of course: the current economic and financial crisis is a common challenge for all of us and a harsh reality of today. There is no country, region or local authority in Europe left untouched by the crisis, although its impact varies.

We know that one of the most difficult aspects to our communities is the problem of balancing our finances and in particular managing debt at regional and local level. In some of our member states this debt, along with the government debt, has reached an unprecedented level. The consequences of this are very serious. To make matters worse, some of our communities are experiencing difficulties related to toxic loans which pose a real threat and even a risk of bankruptcy.

The arbitration between national and subnational budgets is becoming increasingly at the expense of regional authorities that are facing budget cuts.

Our citizens are asking us, local and regional elected representatives, in what way we can manage the situation to minimize direct and indirect impacts of the crisis, and how to build a healthy economy and solidarity in order to avoid repeating the same mistakes in the future.

As elected representatives, we are more than ever confronted with difficult choices. Our decisions must be measured, appropriate and effective. We must win the support of most of our citizens who should have confidence and back our choices. We must, we will have to assess the merits of our choices and, if necessary, change course.

If I am convinced that our communities cannot avoid applying strict criteria of good economic management and, consequently, some fiscal discipline, I am equally convinced that the general arbitration of public finances should not be at the expense of local and regional authorities and ultimately to the detriment of our citizens.

At the recent conference of ministers responsible for local and regional government, in Kyiv in 2011, we conveyed to them this essential message: the way out of the crisis lies in solidarity and coherence of action between the national and subnational levels, including financial solidarity.

In the Congress, we are currently preparing a report that will highlight the capacity of our cities and regions for economic recovery. Indeed, the measures taken to support the local and regional economy are crucial to overcome the crisis, while local and regional policies in support of growth can boost the economy in a broader sense. In addition, in times of crisis, it is also the regional and local authorities who are best able to identify and provide social support to vulnerable groups, those who face the most difficulties in the current economic situation.

This dual role of regional and local authorities, social role as well as an engine for economic recovery, must be recognized, supported and sustained by the central authorities to be optimally effective.

Of course, a wide range of measures have already been implemented in response to the crisis, a variety of experiences have been gained throughout the continent, and the results are beginning to be felt here and there. What is needed now is sharing our experiences, a system to keep each other informed on our lines of thought and action and on our good practices.

We need to share our experiences for our mutual benefit, share the “lessons learned” and ”know-how", in order to avoid pitfalls in the future. In short, we must be creative and constructive and support each other, and I certainly hope that our discussions during this Summit will provide us with some good ideas in this regard.

I wish all of us fruitful and constructive debates.

Thank you.