National Policy Sovereignty

အခ်ဳပ္အျခာအာဏာႏွင့္ ပတ္သက္၍

ကမာၻၾကီးလဲ တျဖည္းျဖည္းနဲ႔ ရြာၾကီးသဖြယ္ ျဖစ္လာတာနဲ႔အမွ် national policy sovereignty ကို relinquish လုပ္ရေတာ့မွာလား ဆိုတဲ့ ျပႆနာက ေနရာေတာ္ေတာ္မ်ားမ်ားမွာ ေျပာၾက၊ ဆိုၾက၊ ေရးၾကနဲ႔ ျဖစ္လာပါျပီ။ အီးယူတို႔၊ အာဆီယံတို႔လို အဖြဲ႔အစည္းၾကီးေတြရဲ့ အခန္းက႑ေတြကလဲ ႏိုင္ငံေတာ္ေတာ္မ်ားမ်ားရဲ့ ေပၚလစီေရးရာေတြအေပၚမွာ influence အရမ္းၾကီးလာပါျပီ။ ဒါနဲ႔ပတ္သက္လို႔ EU ရဲ့ Regional Policy ဟာ ႏိုင္ငံတခုခ်င္းစီက ကိုယ္ပိုင္ေပၚလစီေတြကို အစားထိုးသင့္သလားဆိုတဲ့ စာတမ္းေလးတခု ေရးခဲ့ဖူးပါတယ္။ အပ်င္းေျပဖတ္ၾကရေအာင္ ဘေလာ့ေပၚမွာ တင္ထားလိုက္ပါတယ္။

Relinquishing national policy sovereignty: Should the EU

replace the individual policies of member countries?

Introduction

In March 1957, the Treaty of Rome was signed to establish the European Economic Community (EEC). In its preamble, the countries refer to the need ‘to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing among the various regions and the backwardness of the less-favored regions’. Then, in February, 1992, the Treaty on European Union is formally signed at Maastricht by EC Foreign and Finance Ministers. Since then, EU has provided an institutional umbrella for regions and maintained its position as the world’s most sophisticated and advanced regional integration arrangement.

To promote economic and social cohesion within this umbrella for regions, EU-level policies are created to cover major areas such as social, employment, agriculture, environment, energy, science and technology, industrial, transport, competition, trade and regional policies. With the benefits yielded from the more coherent EU policy approach, the question of whether to relinquish national policy sovereignty over economic matters to EU-level authorities or not has become a prominent issue among the policy makers.

This paper will discuss about the relinquishing national policy sovereignty based on regional policy issues and answer whether the EU Regional Policy should completely replace the individuals policies of member countries or not.

Regions and Regionalism

Regions vary widely in their size, population, levels of economic development, historical origins, contemporary identity, cultural distinctiveness and political activism. Region refers to any piece of continuous territory, bigger than a more locality or neighborhood, which is part of a territory of a larger state, and whose political authority or government, is subordinate to that of the state. (Anderson, 2001)

Accordingly, regionalism refers to the top-down imposition of administration or government based on regional territory or active bottom-up identification with the region in social, cultural or political terms.

The rise of the regionalism triggered the idea towards a ‘Europe of the regions’, an ideology of EU integration and legitimating.

Intergovernmentalism Vs Supranationalism

A form of EU governance has a compromise between intergovernmentalism and supranationalism which can be clearly found in the two competitive objectives of member states.

The first one is connected to pooling or surrendering sovereignty through political and economic integration in order to secure national prosperity, while the second one is connected to retaining sovereignty in order to maintain their autonomy.

Intergovernmentalism enables member states to pursue their own national interests and exercise a veto on development; however, supranationalism limits the ability to exercise a national veto and obliges them to follow decisions supported by a majority of the fellow member states. (Heffernan, 2001)

In general, the complex institutional structures, the range of policy responsibilities and the above combination of intergovernmental and supranational characteristics display EU governance as multi-level governance in which power is exercised not only by EU level decision-makers but also national and sub-national decision makers to various degrees in different countries.

Nugent (1994) categorized the extent of EU policy involvement into

• extensive EU policy involvement (Trade, Agriculture, Fishing, Market regulation)
• policy responsibility shared between the EU and the member states (Regional, Competition, Industrial, Foreign, Monetary, Environmental, Equal Opportunities, Working conditions, Consumer protection, movement across external borders, Energy, Transport, Macroeconomic, Combating terrorism and drugs, Pensions)
• limited EU policy involvement (Health, Education, Defense, International Crime, Social Welfare)
• virtually no EU policy involvement (Housing, Civil Liberties, Domestic crimes

There is no congruence, nor even convergence, in the political role of cities, municipalities and regions in the EU because of the enormous differences in the level of organization, financial resources, political autonomy and political influence of different governments across Europe. (Hooghe & Marks, 1996) However, economic integration gives rise to strong forces for economic convergence because closer economic relations between regions at different levels of technological development should lead to the transmission if know-how from the more advanced to the less advanced. Moreover, capital flows from the capital-abundant regions to regions with unexploited investment opportunities. Furthermore, there can be a flow of labor from the poor to richer regions. (Smith and Wallace, 1994)

Economic integration of the EU

Five main types under economic integration can be identified as follows:

1. Preferential tariff areas (member states set lower tariffs on imports from one another than they do on imports from no-members)
2. Free trade areas (Free trade is established between member states)
3. Custom Unions (Free trade areas which operate a common external policy for trade with on-members)
4. Common Markets (Customs unions within which capital and labor move freely)
5. Economic and monetary unions (identical to common markets except that fiscal and monetary policy is dominated by a central authority rather than by the individual member states) (Armstrong, 2000)

Economic integration can be considered as a considerable factor that has effects on regional economic disparities between high-income regions (the core of the Europe) and low-income regions (the periphery of the Europe).

One classification separates the low income regions into

• depressed areas which are retrogressing
• lagging areas which are growing but a slower rates than most other regions and
• substantially undeveloped ‘pioneer’ or ‘frontier’ regions (Robock, 1970)

Within the EU, a wide range of different types of low income regions exist.

The following table shows the regional GDP per inhabitant in the EU which comprises 27 member countries with 493 million citizens in 2004. It exhibits that one region in four has under 75% of the average of the EU.

(Source- http://ec.europa.eu/regional_policy)

EU economic integration has a continuing long process. The changes of Single European Market (SEM), Economic and Monetary Union (EMU) and Easter Enlargement have a serious impact on economic integration process.

• SEM

The EU abolished tariffs and quotas used by national governments quickly and tried to eliminate the Non-tariff barriers (NTBs) with the design of SEM. The SEM legislation has concentrated on three main groups of the NTBs such as cost-increasing barriers, market-entry barriers and market-distorting practices. (Armstrong, 2000)

• EMU

EMU is a means for consolidating the power of associated states into a bloc against an alignment of global market forces and a reinforcement of EU-level regulatory order. The ECB (European Central Bank) is the representative agency of the euro and the new EU macroeconomic governance structure forged by the creation of the euro has shifted a considerable degree of power to a transnational elite community of central bankers.(Germain, 2001)

• Eastern Enlargement

Eastern Enlargement posed the fundamental challenges for EU regional policy with its impact on the EUR15 member states and EU budgeting implications. New members of the Enlargement process make them eligible for structural funds which provide investment grants, employment grants, infrastructure development and other measures. (Lewis, 2001)

Does Regional Policy Matter?

A central purpose of the EU Regional Policy, which has been functioning since 1975, is to redress the core-periphery divides within the economy. (Dent, 2001) The EU ‘core’ is characterized by its high-tech industrial development, superior infrastructure networks and a high-income per capita demographic profile. To the contrary, the periphery regions exhibit low-tech industrial development, weaker infrastructure provision and a poorer demographic profile.

Indeed, Regional Policy is an important policy to reduce economic and social disparity, to show solidarity and competitiveness and to meet the challenges of the 21^st century. EU is the first among the major powers to grapple the challenges of the twenty first century such as

• how to redefine national sovereignty as individual nations surrender economic autonomy;
• how to mesh different cultures with different priorities and different decision-making processes;
• how to deregulate separate national economic regimes and to induce competition among national monopolies;
• how to establish transnational incentives to promote innovation and technological advance without sacrificing the benefits from, or being captive to laissez-faire economics. (Aho, 1994 quoted in Meier, 1998)

Since 1980s, the funding of the EU for regional support has increased from 9% of the EU-GDP in 1980 up to 31% of the EU-GDP in 2001. (Roderiguez-Pose & Fratesi, 2004) So the regional policy has become one of the most important policies in the European Union.

Regional Policy Instruments

The main funds to implement the EU Regional Policy include

• The European Fund for Regional Development (EFRD)
• The European Social Fund (ESF) and
• The Cohesion Fund.

The ERDF aims to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions by means of financing direct aid to investments in companies (in particular SMEs) to create sustainable jobs; infrastructures linked notably to research and innovation, telecommunications, environment, energy and transport; financial instruments (capital risk funds, local development funds, etc.) to support regional and local development and to foster cooperation between towns and regions; technical assistance featurs.

(http://ec.europa.eu/regional_policy/funds/feder/index_en.htm)

The ESF is designed to finance training, retraining, migration, anti-discrimination and other labor market policies. (Armstrong, 2000)

The Cohesion Fund is aimed at Member States whose Gross National Income (GNI) per inhabitant is less than 90% of the Community average. It serves to reduce their economic and social shortfall, as well as to stabilise their economy.

(http://ec.europa.eu/regional_policy/funds/cf/index_en.htm)

Historical Review of EU Regional Policy

The first EU Regional Policy was introduced in 1975 and since then, the policy has been reformed on six separate occassions. Reforms in 1989-1993 were obvious because of the SEM process, doubling the size of the financial allocations to structural funds and the establishment of the EU delivery system which is based on the principles of concentration of assistance, co-ordination, partnership, subsidiarity, programming and additionality.

The delivery system was retained for the next budget period (1994 to 1999) and its key principles have become the policy objectives. In 1994, EU untroduced a wholly new financial instrument called the Cohesion Fund which operate as an arm of the European Union Regional Policy. (Armstrong, 2000)

However, the EU Regional Policy has been major reformed in 2000-2006 budget period by means of the cutting back of the number of priority objectives from six to three such as New Objective 1 (lagging regions), New Objective 2 (economic and social conversion of regions in structural crisis) and New Objective 3 (development of human resources).

In 2007, the EU Regional policy has been reformed into new objectives again. The objectives for 2007-2013 budget period include

1. Convergence

This concerns promoting growth-enhancing conditions and factors leading to real convergence for the least-developed Member States and regions. (EC decision document number C(2006) 3475)

2. Regional Competitiveness and Employment

It concerns strengthening competitiveness and attractiveness, as well as employment, through development programmes and supporting more and better jobs. (EC decision document number C(2006)3480)

3. European Territorial Co-operation

It aims to strengthen cross-border co-operation through joint local and regional initiatives, trans-national co-operation aiming at integrated territorial development, and interregional co-operation and exchange of experience. (EC decision document number C(2007)1284)

The funds that contribute to these objectives can be shown as

(source: http://ec.europa.eu/regional_policy/policy/objec)

It is obvious that the existing EU regional policy has strengthened its role for effectiveness.

Policy making and co-ordination of Regional Policy

The stages of the Regional Policy Making include

· The Council and the European Parliment which are required to make decisions of the Structural Funds and its rules of use based on the proprosal from the European Commission

· To make this proposal, the Commission has to consult closely with member states over the Community strategic guidelines on cohesion

· Along with the Strategic guidelines, each member state prepares a National Strategic Reference Framework (NSRF). It defines the strategy as well as operation programmes (OPs) that each member state hopes to implement.

· If OPs are adopted by the Commission, member states and regions have the task of implementation and the Commission has to commit the expenditures, pays the certified expenditure and monitors the programmes.

· Finally, the Commission and the Member States have to submit the Strategic Reports to the Council and Parliament.

Thus it is obvious that all three levels of government, EU, member states and regional/ local authorities are involved in Regional Policy so that their policy actions must be harmonized. The following figure shows the co-ordination of regional policy in the European Union.

The Eu has an important role to improve co-ordination between member states and to ensure its own policy is closely related with the regional policies of member states as well as other EU-level policies such as agricultural and trade policy.

Co-ordination of regional policy in the EU (source: Armstrong, 2000)

Success of co-ordination among the levels of government varies due to institutional/constitutional constraints within member states. Federal or quasi-federal systems facilitate greater inclusion of regional governments in the creation and implementation of EU policy. (Dudek, 1998)

However, tensions often emerge among levels of governments as regions seek greater participation with the EU rather than their national governments in creating and implementing regional policy as a way to gain mire autonomy from their central government. (Smyrl. 1997)

Centralization Vs Decentralization

By looking at the EU economic policies as a whole, the costs of pooling economic capabilities are obvious. Economic polices once managed exclusively by national governments are merged or coordinated at the EU level including measures that were concerned with the regulation or product, capital and labor markets. Also monetary policies have designed by increasingly focusing on the general EU economic interest.

In contrast, the benefits of pooled economic capacities are obvious as well. The EU-level policies have developed to help economic governance of the EU. Also the general rationalizing of policies at the EU level helps to avoid overlaps and a waste of policy resources between member states and it can create important synergies between them. (Dent, 2001)

In the case of regional policy, the EU can help structural funds to poor member states in accordance with the objectives. However, individual states are required to implement the operation programmes (OPs). For each OP, the Member State has to appoint a managing authority, a certification body and an auditing body at the national, regional and local levels. The way the funds are managed is based on the shared responsibility system between the European Commission and Member State authorities. So it is clear than individual member countries have its own role to play in distinct regional policies.

Likewise, EU has its own distinct role to play in generating financial transfers to the member states with the worst regional problems and in helping to co-ordinate regional policy across the European Union. (Armstrong, 2000)

However, the prominent role of the EU does not mean it should completely replace the individual policies of member countries. Generally, central governments of member countries retained responsibility for programme proposals, payments, authorization and modification of projects, the administration of ERDF receipts and the transfer of funding to the appropriate authority. (Bache & Jones, 2000)

Although the ‘partnership principle’ has been operated to achieve more participation if lower levels of government, the wording of the Commission assertion still leaves the final say to member states and is dependent upon their respective institutional structure. (Colino, 1996)

Moreover, there are strong reasons against the over-centralization of regional policy in the EU. The main arguments include

• The danger of a uniform approach to solving problems which by their nature differ from one region to another
• The substantial advantage of local knowledge and experiences in designing particular regional policy programmes for specific geographical areas means that member states must be expected to retain substantial control over regional policy
• Over-centralization is likely to stifle innovation in the development of policy instruments; whereas decentralization allows for greater diversity and experimentation in the construction of policies, encourages greater local participation and makes policy makers more accountable to those they serve. (Armstrong, 2000)

Conclusion

By looking at the institutional structures, principles and policy formulation and implementation process, it is obvious that the EU Regional Policy should not completely replace the individual policies of the member states.

References

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