In 2007, when the consequences of the financial breakdown where barely visible, no one could foresee the costs of those economic turmoils for the European Union (EU). Even today the full effects of the crisis remain unclear and comprehensive analysis are hardly feasible. Specific empiric research on a smaller scale such as regional studies are hence extremely important. The Portuguese political scientist Carlos Nunes Silva, a Professor Auxiliar at the Institute of Geography and Spatial Planning at the University of Lisbon (Portugal) and Jan Bucek, an Associate Professor in geography at the Comenius University in Bratislava (Slovakia) have edited the volume Fiscal Austerity and innovation in local Governance in Europe in order to provide such an empiric compilation. The 2014 published book claims to provide a rich variety of cases studies concerning the consequences of the crisis on Europe's local governments. It offers an interdisciplinary collection of ten articles, and could be regarded as one of the first short retrospective sketch of the crisis` effects on European local politics. While several authors in the volume are working for geographical faculties, it also contains articles within urban studies, public analysis, regional studies and jurisprudential backgrounds. The editors remark regarding the subject matter that "[t]he book explores four dimensions"[i] of European politics. Those dimensions concern four research areas: local government, local governance, spatial politics and local policy, which are distinctive for the European policy framework. All dimensions are framed by the common subject of recent financial crisis.
In general European regional policies are based on the assumption that regionalization fosters decentralization and diffusion of competence towards multiple institutions creates an equilibrium of power. Driven by liberal agendas their power diffusing impetus was and still is self-legitimizing. As the diffusion of power in the EU was closely related to the multi-level-governance (MLG) approach[ii], it is based on the principle of subsidiarity. The principle of subsidiarity has gained exceptional influence within the MLG-approach and thus created a confusing diversity of theoretical models and political agendas.
While the MLG-approach describes the special setting of an European quasi-federalism, which allows the maintenance of national sovereignty and the establishment of a higher European level (often describe as the third or fourth level) with clearly defined political competences, own institutions and the capacity to maneuver within a defined political frame.
Subsidiarity is henceforth understood as a Leitmotiv within a multilayered system of policy-institutions. It requires the implementation of policies on the lowest possible level, while the need for new and complex forms of governance is equally affirmed. The main argument from advocates of the MLG-approaches is obvious: Devolution fosters a system of mutual cooperation and control. It requires local entities to take over responsibility, spares national sovereignty from being transcended by higher forms of intergovernmental governance and legitimizing the existence of those higher forms of governance in delimiting their competences. While the need for higher forms of governance is widely accepted, many actors still fear a concentration of power on the European level. The fundamental idea of the MLG-approach is hence to provide a concept, which allows both, shifting power away from the central state and distributing this power equally on all three levels. In a collaborative space actors from the national, the regional and the European level are meant to work together. As a consequence the MLG-approach has been translated into a variety of particular concepts. Another problem remains the unsolved conflict about the authority to establish guidelines. As every member state is autonomously responsible to implement vast parts of European legislations, the implementation of those directives may vary extensively. European policies have therefore led to a very open form of political homogenization, leaving space for nationally formed legislations and arrangements. Subsidiarity itself refines the diffusion of competence by promoting regional and even municipal revenue autarky.[iii] European local policies are implemented to support those regions in developing fiscal autarky.[iv]
While remaining on this common, theoretical ground, Bucek/Sopkulika, Silva and Wollmann elucidate several existing concepts of regional sovereignty - which have been evolving in the shadow of the subsidiarity paradigm. The book provides important insights on the variety of conflicts that evolve around this concept and which have intensified throughout the crisis. Broken down, these are conflicts of sovereignty. While Bucek/Sopkulika focus on the case of Slovakia and its special conditions during the crisis, Silva introduces with Portugal a country which suffered severely from economic upheavals, illustrating the faith of struggling economies within the EU. Other than Slovakia, which has shown a high level of economic resilience, and which introduced, soon after the crisis, measures of budgetary reforms, Portugal was pressured by European institutions to adopt measures of reform, which rolled back several achievements of previous decades.[v]
In the second part of the book Bufon, Kovacs, Bakota and Sarazhynski join the discussion on sovereignty in their analysis on national and cross-national local policy. Whereas each author is concentrating on a particular case and form of local policy, read together they provide more than just descriptive case studies. Presenting Italy, Hungary, Croatia and Belarus, the reader finds a variety of interesting cases, which are (apart from Italy) "less important" economies within Europe, and hence cast a different light on the effects of European policies for weaker economies.
The last part contains articles from Steels, Brauckmann and Markova/Ticha who analyze more specifically the impact of economic upheavals on urban policies and the evolution of new techniques of policy-making within urban spaces. Again, comparing different cities casts light on the pluralistic diversity of Europe's communities and illustrates the difficulties to find best-practices examples. From these perspective positions in the EU, which demand a more centralized and monolithic approach towards Europe's problems, seem delicate.
While the quality of the articles vary, the value of the entire volume originates from its comprehensive character. Some articles, like those from Kovacs, Sarazhynski and Markova/Ticha, are mainly descriptive. Read alone they lack analytical deepness and profoundness. But within the volume they provide further insights and perspectives, which help in understanding the content of the other articles. Some articles are nonetheless pieces of mediocre scientific work, which lack analytic focus a clear research question or clearly presented findings. In this regard the editors should have been stricter in the selection of the articles. I will henceforth focus on the most important findings and present a discussion of those findings which substantiate the readers understanding of regional policy in the EU considerably.
Slovakia is a well-chosen example to show the political impacts of the European debt crisis. One of the most influential decisions during the crisis was the adoption of the `debt break`, a debt cut mechanism for all budgetary politics.[vi] This mechanism perfectly illustrates the paradigmatic shift in European politics. Fiscal politics have been turned into a system of automatisms and self-imposed restrictions. As the debt cut was established through constitutional law, its fixed debt limit deprived the politic actors of their own sovereignty. The result was the emergence of a new political rationality. Tied to the principle of efficiency it has become the post-austerity leitmotif.
Local municipalities have thus been forced to shift their policy-focus towards innovating their revenue side. The political rationality has meanwhile – deprived of the common ground of deficit spending – drastically shifted. The result is a considerable restriction of political freedom. While the neo-liberal dogma of limited taxing remains untouched, another relict of the golden era of the welfare state – the option of deficit-spending – has been deconstructed.
Under those circumstances local actors have been forced into a fierce bargaining process with the central government. Despite the de-politicization of budgetary politics, we may thus observe a higher degree of politicization on the local level per se.[vii] While budgetary politics has been mechanized, the field of state revenue has proven to be a field of various policy innovations. Nevertheless, the shift towards innovative tax generation remains a remarkable political shift, which in the end threatens to further increase the dependence of local governments on the big local taxpayers. The conclusion on mechanizing budgetary policies hence remains conflicting. But it seems clear that many local governments in peripheral areas are not prepared to champion national governments and remain, more than before, dependent of national support. This Situation might explain the European trend towards more centralized policies.
Secondly, together with the principle of subsidiarity, the economic dependency has transformed the concept of instate solidarity. The intention was to reduce interstate budgetary dependencies. Solidarity between regions is gradually being replaced by a system of complete and exclusive responsibilities for local budgetary policies. Regions who cannot live up to those expectations may lose important parts of their independence to the central state. The former system of mutual cooperation and solidarity is endangered and steadily replaced by a hierarchical and mechanized organization of local governance. In the worst case the future integration of regional entities runs along a system of inflexible laws and regulations, leaving the local population at the mercy of its local sovereign and the support of big taxpayers. In those cases, political rationality would have been replaced by a rationality of contract law.[viii] In such a mechanistic system more responsibility on the local level would lead in weak regions to less stable and less autonomous local entities.[ix]
In this context the EU has become the ultimate arena for supporters and opponents of policies structured and dominated by austerity measures. This might be a reason why European politics provide only limited remedy to the actual crisis. Countries which acquire aid from the European rescue fund (such as the EFSM), are strictly bound to its terms and conditions and thus deprived of several "more political" solutions. Instead of autonomous political decisions.[x] In those cases we face the transformation of politics into a system of technocratic policy making. The same can be said for the different regional founds, which are the main instruments of European local policy. Clear criteria and restrictive policy regulations are thought to homogeneously implement European concepts of spatial planning.[xi] Portugal is another example for the impact of a mechanized resolution of crisis. Under the aegis of European officials, a new framework for local and regional governments has been set up. At the core of the reforms was the re-centralization of power. The central government started to control the implementation of strict budgetary rules for municipalities, enforced by a restrictive legal framework.[xii] This new turn in European spatial conception is particularly controversial in the case of Portugal, since the country only developed a regionalized political system after turning from a fascistic dictatorship into a liberal democracy. While the EU once supported this shift, it has shared the decision to re-transform this evolution. The shifting impetus towards a more centralized system of budgetary control symbolizes the breakdown of liberalism in the face of the global crisis. The reader might hence come to a different conclusion than the editors. It seems inappropriate to speak of an anti-regionalist shift in the EU. The recent developments rather introduce a new quality of European regionalism – a de-politicized post-austerity regionalism.
Hellmut Wollmann further enriches this perspective. He reconstructs a policy shift in the field of local public service. Whilst before the crisis of neo-liberal critique aimed at dismantling local monopolies, which had been established by local governments,[xiii] the critique has remarkably shifted during and even before the crisis. While focusing on the water and energy sector he is able to show, how the policy approach in this field has – despite local and national differences – simultaneously transformed under the influence of shifting rationalities.
The three chapters in part one strengthen the impressions that local politics have dramatically changed – at least in parts of Europe. The neoliberal division of political rationality and economic managerialism has merged into a political managerialism. Regarding the crisis, Wollmann proposes that a remunicipalization of public services "holds the promise and harbours the potential of combining the political and the economic rationalities".[xiv] This perspective is – according to the author – particularly promising, because the municipal companies have been harmonizing political aims with economic rationality, providing a solution of the neoliberal dichotomy of market and state (see ib.). It is most unfortunate that the author does not touch the question of whether or not this semi-nationalization of local markets could hold as a model for Europe as a whole. There is reason to doubt that this "centralization" is a promising perspective for European societies.
Anja Brauckmann elaborates the particularities of the shift toward centralization in her analysis of new tools in urban planning. Her article provides insights about the dispersion of a new harmonized managerialism on the local policy level. Urban planning was ever since confronted with a complex and very reactive social system. Structured by local necessities and scarcity of resources, urban planning was the answer to demands for planning and local development capacities. Regional planners had to take into account plural constellations (e.g. preferences of the local population, preferences of future populations, local development strategies, economic and social conditions etc.). During the neoliberal era the Idea was predominant that concurrence between the neighboring local authorities would temporarily balance demand and supply, while awarding dynamic regions. A concept equally simple as appealing, but Brauckmann shows that this Idea often did more harm than good. Moreover, the concurrence of neighboring municipalities resulted in irrational constellations. Brauckmann focuses on strategies to avoid situations of cutthroat competition between municipalities. She briefly retraces the contradictions of competition between municipalities and links the failing of urban development programs to the lack of planning capacities. Her answer to this dilemma is planned cooperation between municipalities. Based on new technological capacities new forms of urban development have emerged in Germany. New models of social evolution, action theory and future revenue calculations help to model the profitability of new urban projects and provide a basis for a wholly new form of project coordination with neighboring municipalities.[xv] Ideas of `social engineering` are neither new, nor foreign to neoliberal forms of urban planning. But the new quality of this process derives from the recent technologic progress. A new awareness of the importance of social data and the experiences from crisis impacted urban development have shaped new approaches in this field. Brauckmann concludes that such new approaches entitle municipalities to develop an entirely new process of urban planning. Planning models will become more complex, since a large amount of factors could be integrated into a model. Without integrating a critical view on her topic, she nevertheless reflects upon the exclusivity of this new form of local policy. As Brauckmann indicates, the results of such modeling are only accessible by a limited group of people. Those unable to understand the techniques will not be able to engage in discussions on the planning process.[xvi] Even more striking is the fact that strategies based on those concepts are aiming at the remodeling of reality. This is not to say that reality will be artificially transformed, but rather do those approaches indicate a new quality of narrowed down political choice. Every deviation from the model`s assumption threatens to sabotage the model itself. Citizens' movements, which have no understanding of those models, will probably come up with contradicting assumptions that are difficult to integrate into such a planning process. Unsurprisingly the emergence of civic movements is the "social engineers" horror scenario.
There is another problematic aspect to the modeling of regional policies. Bound to a European strategy, social engineering gains an expansive impetus – Europe has ever since been shaped by an Idea of cohesion and homogenization of regions. Milan Bufon explains in his article why the European regional policy was shaped in regard to Europe's core regions. Those regions have become role models for the European evolution as a whole. Economic success and their influence in Brussel have fostered a system of inner gravitation. The EU could never entirely hide this bias. Bufon shows furthermore that the crisis-driven deconstruction of neoliberal ideas of pluralism and diversity – which had gained influence through the MLG-approach – has a regressive impact on the entire European local policy. Whilst pre-crisis discussions about Europe's diversity have been unable to answer questions about profound cooperation, the post-crisis era leaves Europe in a state of inner, unsolved conflicts. Calls for more integration clash with anti-European sentiments. Diversity itself – once the promise of Europe's progressiveness – has become the symbol of the crisis. Bufon calls the emerging tendency towards centralism an inner-"European imperialism".[xvii] Present European regional policy is based on a "system of soft spread and implementation of certain values and mechanisms of co-dependence".[xviii] Conflicts in this context are linked to the rejection of this soft centralism and the upholding of gritty national interests. European cross-border policies are henceforth "fairly labile and contradictory".[xix] The crisis has impacted those cross-border projects, by fostering mistrust towards European policies in general and unveiled the fragility of European cooperation in general. Other regional cooperation schemes have simply unveiled their purely instrumental character.[xx] Impacted by apparent forms of alienation, the European project suddenly suffers from instrumental and purely egoistic/nationalistic abuse.
Similar patterns become apparent in regard to Europe's modes of crisis resolution. As the EU is a unique political project of multiple sovereigns, in times of crisis it is especially prone to friction. Conflicts and different perspectives tend to divide the members, often in fundamental questions. It is hence not surprising that centralization and re-structuring is famously suggested as the solution.[xxi] Especially part I and II of the book foster the assumption that the strategy of re-centralization has in post-crisis Europe grown into something more substantial than a mere political option. The editors suggest that Europe's local policies are yet again at a crossroad. While re-centralization, as Silva shows, has already taken place in several peripheral countries, the stronger countries seem to hold up the liberal idea of devolution and regionalization. The outcome of this insidious reformation process remains unclear, but the editors made a start in analyzing recent developments in the EU.
In this regard the editors come to the conclusion that "regionalism is no longer fashionable in many parts of Europe [...] Regions are no longer seen as the answer for all problems confronting local development processes, which seems to require an entirely new vision of the sub-national governance structures in Europe, distinct from the neoliberal governance model in order to face the new condition likely to characterize the post-fiscal austerity crisis period".[xxii] This conclusion unveils a central weakness of the editors' approach. While the editors regard the crisis as a chance to overcome the neoliberal paradigm, it seems equally likely that the neo-liberal era in Europe has been superseded by anti-liberal, centralistic nationalisms. If this proposition is true, the EU is facing a fundamental policy change. The editors present with their volume all evidence which enable us to analyse the recent evolutions in Europe. Unfortunately, their conclusion lacks the analytic sharpness which seems to be adequate facing the actual situation in Europe.
During the crisis regions lost important parts of their political freedom. Since the local level of government is especially prone to budget cuts, their capacity to react on revenue reduction is naturally very limited (see 7. ff.). Subsequently new policy slogans have emerged during the crisis. Policy efficiency through hierarchic decision-making was one of those.[xxiii] Whereas before the crisis – following the neo-liberal paradigm – pluralization and cooperation within each field has been seen as a core condition of concurrence and thus dynamic progression, the perspective shifted throughout the crisis. Bucek, Silva and Kovacs provided the evidence about how the crisis has strengthened the reemergence of a "neo-Weberian governance model,"[xxiv] especially on the local level. The division of competence or cooperation along clean-cut fields are in times of crisis more fashionable, than the old neoliberal institutional hotchpotch. The policy agenda is not limited to the restructuration of administrative work.
New centralistic tendencies; a professionalized, autonomous and managerial local administration; new forms of social engineering; a technology driven revival of social planning; the mechanization of political fields and the appeasement of social conflicts through legislative mechanism are all aspects of new European policy, as the authors of this book have described it. The overall balance sheet of `post-neoliberal` Europe recalls more of a scenario of a dystopian sci-fi novel, than a pluralistic, democratic and liberal policy. Irony aside, Fiscal Austerity and Innovation in Local Governance in Europe provides important insights into European developments throughout the crisis. Many of the here presented aspects are not entirely established, yet others represent only one option amongst a variety of multiple political choices. Planning capacities are of course an important aspect of liberal authorities and new technologies do provide the chance to be applied in a progressive context, but such optimism should not keep from elucidating the risks that accompany those capacities.
The editors suggests in their conclusion that the crisis has deeply impacted European politics and somehow transformed its core values. Unfortunately the editors are not concerned enough about the emergence of anti-libertarian, socially regressive and politically narrowing policy agendas. But several of the volume's articles have shown how severely crisis-ridden countries are impacted by centralizing agendas and deprivation of political autonomy. The homogenizing effects of the joint European project are equally obvious; several authors in the book have also shown, that not the EU is devastating European societies. Quite on the contrary they assume that nationalist agendas and the mutation of European solidarity is at the heart of the authoritarian revolution in Europe`s societies.
The editors' narrative about the emergence of a progressive European alternative to neoliberalism appears to be an illusion. Europe's ordoliberal agenda, the German counterpart to neoliberalism, threatens to morph into a chimeric mix between ordo-socialist and liberal-economist elements. The editors of the book seem to be blinded by their delight about the decline of neoliberalism or just too careless to reflect up on those various threats to draw a cautious conclusion to their book. What remains is the appreciation of a well-chosen collection of substantial articles, which are inadequately framed by the editors.
Liesbet, Hooghe; Gary, Marks (2003): Unraveling the Central State, but How? Types of Multi-level Governance. In: Am. Pol. Sci. Rev. 97 (02). DOI: 10.1017/S0003055403000649.
Silva, Carlos Nunes; Bucek, Ján (Eds.) (2014): Fiscal austerity and innovation in local governance in Europe. Surrey: Ashgate.
[i] p. xv
[ii] Focusing on the process of European integration, Hooghe and Marks developed in the 1990s the idea of a multi-layered system of political competence and modes of cooperation. Their definition of the concept has since acquired a paradigmatic status. According to these authors MLG describes "a 'system of continuous negotiation among nested governments at several territorial tiers – supranational, national, regional and local' that was distinctive of European Union structural policy "(Hooghe & Marks 2003: 234).
[iii] see p.80
[iv] European local policies are arranged in a dualistic approach. Legislations are implemented in a top-down process, but in most cases every level has a certain freedom to maneuver. Direct funding and (re)distribution is the second aspect of local governance. Funding is diffused on all levels and by multiple institutions. It either trickles down, or is directly forwarded to regional actors.
[v] see p.37 ff.
[vi] see p.13
[vii] see p.22
[viii] see p.23
[x] see p.33 f.
[xi] see p.36
[xii] see p. 35
[xiii] see p.54
[xiv] p. 68
[xv] see p. 168
[xvi] see p.168
[xx] see p.86
[xxi] see p.181
[xxiii] see p. 97