by Andr és Rodríguez-Pose London School of Economics Oxford University Press ISBN 0-19-874286-X

1. THE EUROPEAN UNION: ECONOMY, SOCIETY, AND POLITY by Andrés Rodríguez-Pose London School of Economics Oxford University Press ISBN 0-19-874286-X

2. Part III POLICY

3. Chapter 7 Regionalism and regionalization

4. Introduction • An important challenge to the European nation-state is emerging from below • Recently most European countries have witnessed a revival of regionalism • This revival has triggered processes of regionalization and devolution • Centralized states are increasingly becoming the exception to the rule(a ‘Europe of the Regions’) • Main questions: • How and why did the process of regionalization come about? • Are we really witnessing the emergence of a ‘Europe of the Regions’?

5. Regional devolution in Europe • At the end of the 1960s • The great majority of the states in Europe were centralized states • Powerful central administrations • Solid and generally small local authorities • Regions as mere administrative divisions • Austria, Germany, and Switzerland (with Yugoslavia on the other side of the Iron Curtain) as the main exceptions to the rule • At the beginning of the 21st century • Strong central governments are on the retreat • Centralized governments are increasingly confined to relatively small and homogenous states

6. Regional devolution in Europe (II) • Challenges to the centralized state have been widespread in larger and less homogenous states • Partition of former plurinational states: Czechoslovakia, Yugoslavia, Soviet Union • Devolution as a general process in the EU • Federal states: power of the central state confined to foreign policy, defence and some macro-economic management (A, B, D) • Regional states: Substantial autonomy achieved without a profound restructuring of the state (E, I) • ‘Regionalized states’: less advanced form of decentralization (F, P, UK) • Unitary states: little or no decentralization (Dk, SF, Gr, Irl, L, Nl, S)

7. Regional devolution in Europe (III) • There are also differences in the levels of regional autonomy within states • Homogenous level of devolution only in federal states and France • ‘Asymmetrical devolution’ in Italy, Portugal, Spain, and the UK • ‘Historical’ regions or regions with greater ‘identity’ enjoy higher levels of autonomy (Italy and Spain) • Parts of the country have devolved powers, while others remain under central rule (Portugal and the UK)

8. Level of regional autonomy across the EU

9. From regionalism to regionalization • Two waves of regionalism and regionalization (Keating 1998) • 1960s and 1970s: Deeply rooted in identity issues • Late 1980s and 1990s: the ‘new regionalism’ • More widespread than in the previous wave • More often based on economic rather than on identity grounds • Austria and Germany • Federal states since the second WW • Federal structure as a way to weaken the power of the central state and to prevent the re-emergence of German militarism

10. From regionalism to regionalization (II) • Belgium • The country that has undergone the deepest transformation: From unitary to regionalized in 1970 and to federal in 1993 • Regional division based on the deep linguistic and cultural cleavages that divide the state • Regional division of power follows two criteria: • Language: Three communities (Flemish-speaking, French-speaking and German-speaking communities) • Identity: Three regions (Flanders, Wallonia, and Brussels) • The Flemish Community and Region have merged into one entity • Result: a complex territorial structure with five territorially overlapping subnational entities

11. From regionalism to regionalization (III) • Spain • A failed secular nation-building process and repression of regional identities by the Francoist regime fuelled resentment in the peripheral nations of Spain • With the restoration of democracy came a process of regional autonomy • Asymmetrical devolution process across regions: • Highest autonomy in the regions keeping their medieval privileges (fueros): The Basque Country and Navarre • High autonomy in regions with strong identity: Catalonia, Galicia, Andalusia, Valencia, Canary Is. • Much lower level of autonomy in the remaining regions (although the gap has narrowed in recent years)

12. From regionalism to regionalization (IV) • Italy • Origins of the regionalization process can be traced back to imperfect nation-building • Important cleavages remain • The Questione Meridionale (question of the South), relative underdevelopment of the South of the country • Existence of linguistic minorities in peripheral regions • 1948 Constitution has provided for ‘asymmetrical devolution’ • 5 ‘special status’ regions, with a high level of autonomy (Sicily, Sardinia, Valle d’Aosta, Trentino, Friuli) • 15 ‘ordinary status’ regions, with a much lower level of autonomy • Ongoing process of federalization

13. From regionalism to regionalization (V) • UK • Regionalism has basically affected the peripheral nations of the country • The ‘union state’, created in 1707, has not succeeded in creating a British national identity • The first wave of regionalism of the 1960s and 1970s ended with the rejection of devolution in referenda • A second wave has taken place since the arrival of New Labour in 1997 • Devolution was approved in referenda for Scotland, Wales, Northern Ireland, and London • However, ‘asymmetrical level’ of devolution, with a huge gap between the powers of the Scottish, at one end, and the London executives, at the other

14. From regionalism to regionalization (VI) • France • Weak decentralization in France more the result of planning than of the strength of regionalist movements • Direct election of Regional Councils from 1986 onwards has granted French regions greater legitimacy • But level of autonomy well below that of neighbouring countries • New regionalist wave in the late 1990s and beginning of the 21st century • Devolution for Corsica on the political agenda

15. The bastions of centralism • Seven of the fifteen Member States of the EU are still centralized countries • These tend to be small and relatively homogenous countries • Devolution debate active in some of these countries • The Netherlands, where regionalization has always remained in the background • Portugal, whose population rejected plans devolve powers to the Portuguese mainland regions in 1998

16. The transfer of power from the nation state to the regions • Regionalization has brought about important changes in governance and policy making structures across the EU • Increase of transfers of powers from the centre to regional governments • Even the regions with the lowest level of autonomy (i.e. regions in France) are responsible for a considerable array of policies • The expansion of regional powers has not always been matched by a similar increase in regional resources • With the exception of Spain, the expenditure balance between central and regional and local governments has remained relatively stable

17. Share of total government expenditure by different tiers of government (1980-97)

18. The transfer of power from the nation state to the regions (II) • Recent steps are, however, going in the direction of granting greater resources to regional governments • The tax varying powers accorded to the Parliament award the Scottish executive a significant capacity to raise revenue • During the 1990s Spanish regions have been granted access to 30 per cent of the income tax revenues generated within their territory • Fiscal federalism is advancing in Italy with the introduction of new forms of regional taxation

19. The roots of the regionalization process • What are the factors behind the drive towards devolution in Europe? • The revival of nationalism and regionalism across Europe since the 1960s • The sources behind this regeneration where of historic, linguistic, and cultural nature • Regions with a strong identity led the way (Catalonia, Basque Country, Scotland, Flanders, Brittany, Sicily) • Demands for autonomy were centred around the need to protect and promote regional culture, languages, and identity • The use of economic arguments in the 1990s • Globalization is undermining the capacity of nation states to control economic development processes within their territories • The region is becoming a key actor in a global setting

20. The roots of the regionalization process (II) • Globalization also poses challenges to regions • The greater mobility of factors of production is forcing regions to adopt more pro-active development strategies • Regions and cities are forced to compete with one another for mobile assets • Regional success increasingly depends on the capacity of each region to adopt pro-active policies and to form a complex web of public and private institutions • Devolution is regarded as a way of guaranteeing economic survival in an increasingly competitive world

21. Towards a ‘Europe of the regions’? • It is claimed that transfers of powers to supranational and subnational bodies is contributing to the ‘hollowing out’ of the nation state • Taken to its limits, this implies that the nation state in the European context no longer matters (O’Brien, 19992; Ohmae, 1995) • Emergence of a ‘Europe of the regions’ • But is a ‘Europe of the regions’ really emerging? • For some (Milward, 1999) European integration has not only not weakened, but is reinforcing the power of the nation state

22. Towards a ‘Europe of the regions’? (II) • The transformation of the nation state • Capacity to shape matters that go beyond their national boundaries • States as power brokers between subnational and supranational levels of government (Hirst and Thompson, 1995) • Regional economic performance still very much embedded in national economic performance • We seem to be closer to a ‘Europe with the regions’ than to a ‘Europe of the regions’

23. Conclusion • The revival of regionalism has triggered a profound transformation of the territorial organization of European states • Devolution processes have both advantages and disadvantages • Advantages: • Greater diversity of policies and possibly greater transparency and adjustment to local and regional needs • Disadvantages: • Greater competition among regions • Possibly a lower capacity of poorer regions to compete in a globalized world