Congress of Local and Regional Authorities of Europe : Spring session, 22 - 24 March 2004

(To be checked against delivered speech)

Speech by Dr. Marius Profiroiu, Secretary of State for Public Administration Reform, Ministry of Administration and Interior, Romania

Mr. President,
Ladies and Gentlemen,

It is once again a great honour for me to attend the meeting of the Standing Committee of the Congress of Local and Regional Authorities (CLRA) of the Council of Europe.

I take this opportunity to convey greetings from our Ministry of Administration and Interior and to wish you good luck for the spring session of the Standing Committee.

I would like to present the latest achievements from my country regarding the strengthening of regional and local democracy.

In Romania, important steps have been made in the field of public administration reform. Recently, “The Updated Strategy for the Acceleration of Public Administration Reform” was finalised; a document accepted by the representatives of the European Commission. The strategy was developed through an extensive process of consultation of stakeholders (central and local public authorities and associated structures, civil society representatives, political parties and international donors). These consultations were supported through 8 regional meetings as part of the public debate organised within the National Forum for the Strategy.

One of the main priorities of the updated Strategy is to continue the process of decentralisation of public administration, the strategy reinforcing the transfer of power from the central to local level as a component of the democratic process, as we really do believe in local democracy.

One important achievement of these actions was a very special event at Sinaia, in December 2003, The International Conference on “Decentralisation in Romania – present and future perspectives”. At this event, the priorities for continuing the decentralisation process were set:

- elaboration of the framework law on decentralisation to ensure the acceleration and coherence of the decentralisation process;

- regulation of Prefects’ prerogatives concerning deconcentrated services through an organic law;

- development of the secondary legislation to implement the provisions of the strategy for decentralising public services. The secondary legislation must be implemented under conditions of stability and harmony, and based on a legislative process closely linked to the systematic consultation of local authorities, in order to lead to a stronger decentralised administrative system.

- establishing standard mechanisms and procedures to support the decentralisation/de-concentration process;

- developing human resources to support the demands of the decentralisation process;

- establishing a system of indicators to measure the progress of the evolution of the decentralisation process within a standard process of decentralisation;

- developing a monitoring system for the evolution of the decentralisation process, including communication with civil society and other stakeholders of the process;

To achieve the objectives of the decentralisation process in Romania, a legal basis for the process must be created. This legal basis rests in the Framework Law on Decentralisation. This law represents the political commitment to continuing decentralisation in Romania. The draft law is being discussed with representatives of the Ministry of Finance and local authorities (through the Romanian Local Authorities Federation)..

Through this law the Government of Romania is making a commitment to Parliament to present other laws such as:

1. Law on the Institution of the Prefect – 2004;
2. Decentralisation Law concerning local responsibilities – 2005;
3. Law on the Metropolitan Area – 2005;
4. Law on the Capital of the Country – 2005;
5. Law on inter-communal and inter-county co-operation – 2006;
6. Law on the local civil service – 2007.

The draft framework law on decentralisation aims to define the competencies exercised at commune, city and county level, already regulated through Law no.215/2001 concerning local public administration; at the same time there must be clear separation of competencies at the levels of mayors, local councils and county councils, trying to eliminate overlap. The law also aims to strengthen the mayor’s role and prerogatives, as well as the co-ordination role of the county council in the local development process at county level.

The draft Framework Law on Decentralisation contains provisions concerning financial decentralisation. The main principle here recognises that the transfer of competencies from central to local level must be accompanied by a simultaneous transfer of financial resources.

The draft law includes regulations on the institutional framework necessary to accomplish the decentralisation process – setting up ministerial and inter-county technical Committees.

The draft law contains provisions for a system of monitoring the decentralisation process in Romania.

This draft law marks the evolution of the principles underpinning the decentralisation process, which contains new elements.

The first novel element introduced by this law refers to the principle of proximity, having in mind less distance between the administration and the citizen.

In this law it is established that the Romanian administrative and financial organisation, in a unitary and undivided state, is decentralised. Although, at present, the territorial administrative units of Romania are the communes, cities and counties, there is a possibility of establishing, through an organic law, other territorial administrative organs.

For the first time in Romanian legislation, the rights of local authorities to experiment; and to co-operate to exercise their competencies, are defined.

Another new element in this draft law refers to the right of citizens to request the inclusion of their problems on the agenda of the authorities’ meetings if these problems are in their competence.

Concerning the institution of the Prefect, the framework law had to regulate this important institution in the process of local and central public administration reform. The reform of the institution of the Prefect does not contradict the process of decentralisation; on the contrary, it is part of the overall evolution of the process.

The key approach taken by this draft is the de-concentration of power in favour of the Government representative at territorial level. Also, the law aims at the professionalisation and de-politicising of the corps of Prefects.

Through their provisions, the two draft laws satisfy the normative framework to fulfil the requirements of EU accession, as well as of a modern and efficient government.

The real strengthening of the local authorities’ financial autonomy is part of the process of consolidation of local democracy; financial decentralisation represents the main objective of the public finance law.

In view of the present need to elaborate a budget in line with modern management, representing a shift from central to a local level of responsibility and with adequate resources for some public activities, with improvement in the procedures and mechanisms for using public funds, an Government Emergency Ordinance (GEO no.45/2003) for local public finance was elaborated.

The main provisions of the draft law, with new elements for Romania, are as follows:

- Programme budgeting

- The obligations of the main credit ordinators/ordonatori principali de credite to report annually the performance of each programme; the reports need to include all activities, their direct and indirect costs, the main objectives, expected and actual results, measured by precise indicators, in order to identify variances with the initial estimates;

- Regulations according to which local public authorities may contract, guarantee and manage domestic and foreign credits;

- The creation of regulations concerning programme co-financing by both international institutions and state and local budgets; these will reinforce the national effort, mainly for local infrastructure development.

- The principle of solidarity, according to which the reserve budget fund of the local and county councils could be directed to communities in extreme situations.

It is worth mentioning that in the process of elaboration of this law, associated local authority experts have also participated.

In order to enhance the capacity for implementing the law and also for improving legislation concerning fiscal decentralisation, a twinning project is now running with France and Germany. Financed under the Phare 2002 Programme, it aims at the acceleration of the fiscal decentralisation process by transferring to the local level the competencies and related means of implementation, as well as by generating financial resources at the local level.

The twinning project mainly envisages the following:

- Creating an objective mechanism for the allocation of financial resources to local authorities, which should strictly correspond to transferred competencies ;

- Recommendations to improve the collection of financial resources;

- New mechanisms to ensure the transparency of local authorities’ expenditure ;

- Training for local authorities (elected and civil servants) in the design and implementation of local budgets.

Regarding the activities carried out by the Task Force on Regionalisation, I would like to emphasise that, according to the conclusions of the latest meeting in Sinaia, they were organised largely with the help of the National Union of County Councils of Romania, in January, 2004. Let me mention them:

- Short term engagements: strengthening the regional development system ;

- Long term engagements: identification of optimal solutions, including administrative ones, for efficient implementation of regional development policies after accession.

Therefore, regarding the existing regional development system, a new draft law was designed, aiming at enhancing the functioning of the system.

Up-dating the law in force, Law no. 215/1998, was necessary because the existing mechanisms were not efficient enough, mostly regarding the pre-accession social and economic cohesion funds management. Also, the new draft law included explicit provisions for fulfilling the criteria required by chapter 21, «Regional policy and structural instruments co-ordination ».

For better promotion of the region, for partnership development and for increasing the “regional conscience” the role of the Regional Development Boards was extended. Also, the possibility of having financial resources included in annual budgets under a new heading, “Expenditures for regional development and promotion” was created

The new draft law improves the mechanisms for financing the Regional Development Agencies (RDA) by introducing contracts between parties, and technical assistance for programme implementation is foreseen.

Institutionally, there is a proposal for setting up, in each county, an office for regional development, as part of the RDAs, aiming at better local promotion of the national/regional development and related programmes.

Other activities of the Task Force on Regionalisation, including information exchanges and/or thematic debates, are carried out regularly, being part of the extended debating process on regionalisation, a process initiated by the Prime Minister at the international Forum on regionalisation, held in Sinaia, Romania, in October 2002.

As an example, in March 2004, a delegation of the National Union of County Councils of Romania participated at a conference, in Florence, debating the Italian model of administrative organisation. In the near future, an international meeting on regionalisation is envisaged, benefiting from the participation of experts from academia.

A national effort is necessary to prove the capacity of Romania to accelerate the process of accession into the European Union.

It is essential to work systematically, to be well prepared, for the consolidation of local democracy, and this implies hard work, by the Government, Parliament, political parties, the whole Romanian society. We are aware that democracy and stability at the national level depend, mainly, on the existence of democracy at the local level.

Also, we know that local democracy is an essential component of democracy and the rule of law. Consequently, as has been seen recently, collaboration of local authorities with non-governmental organisations has been improved. Co-operation with these associated structures had a positive effect not only in the development of participative democracy at local level, but also in the acceleration of public administration reforms.

Finally, I would like to thank representatives of the Chamber of Regions of the Congress of Local and Regional Authorities for their constant support to Romania and to assure them of the firm commitment of the Government to the process of consolidating local democracy.