European Regional Policy in the Netherlands.

The Netherlands appears seldom in publications dealing with regional policy, genuine or European. Countries like Spain, Italy, Ireland, Germany mostly incite the researchers interests. Despite the small dimensions of the country and of the structural funds implemented here, the manner in which regional policy is understood and managed could represent a best practice at European level. The practical Dutch nature works hand in hand with administrative traditional principles as co-ordination, consultation, consensus and the way decisions are here made would stir the envy of any politician or civil servant trying to implement a multi-level system of governance anywhere else[[“To describe the Dutch policy-making as a system of checks and balances puts perhaps too nice a gloss on its fragmentation, but there can be no doubt that the development ”from government to governance”…has a long history in the Netherlands” (Andeweg&Irwin 2002, 160).]].

The population density determined significant expansion of urban centres especially in the Randstad, where the 4 major Dutch cities are localised, i.e. Amsterdam, den Hague, Rotterdam and Utrecht, and where development concentrates. Currently, due to this evolution, regional policy is sometimes understood as urban policy and the big cities, organised in interest groups (G4, G9) intensely promote this concept. Provinces, on the other site, and mostly provinces outside Randstad, as Flevoland, lobby for a “traditional” regional policy, with the province as important decisional actor.

On the background of the economic recession, this conflicting situation has tended to escalate this year as the central government tries to alter the net-contributor to the EU budget position of the Netherlands by negotiating less structural funds to enter the country in the Financial Framework 2007-2013. Simultaneously Randstad would benefit mostly from the economic reforming strategies negotiated to bring back the country to prosperity. This approach affects significantly the interest of other regions, as Flevoland, which, despite fighting with several imbalances, will receive less European and national money to finance their own reforming efforts. Their only alternative is to wait till the spill over effect of the investments in the Randstad regions would reach them.

{{1. Some background historical facts}}

At the time of the Dutch Republic of Seven United Provinces (1588-1795) sovereignty resided both de jure and de facto with the provinces. (Hendriks, Raadschelders, Toonen 1995, 216, Hendriks 2001, 143). The provinces were, on their turn, highly dependent on local administrations. Big cities were enjoying also in those times a powerful position. The Confederation was transformed in a “unitary state”, during the periods of the Batavian Republic (1795-1806), Kingdom of Holland (1806-1810) and Department of Holland (1810-1813), when the Napoleonic principles of territorial-administrative organisation were strictly implemented. (Hendriks, Raadschelders, Toonen 1995, 218, see also Hendriks 2001, 143-4).

A new Constitution (1848), a Provinces Act (1850) and a Municipalities Act (1851) drafted by J.R. Thorbecke laid the foundation of the Dutch decentralised unitary state still functioning today as an “association of mutually restricting bodies designed to work together” (Hendriks 2001, 144). Nevertheless, if the administrative structure was changed, the administrative culture based on principles as decentralisation, consultation, co-operation, dialogue and consensus have survived till nowadays.

While the most important governmental decision-making forces in the new unitary state were the central and the local authorities, the divers interests in the country organised themselves, at regional level, in so-called zuilen (pillars): the Catholics in the south and south-east, Protestants in the north and north-east, weaker social-democrat and conservative pillars in the urban areas of western Holland. These pillars were covering the intermediate, regional “governance” between the national and local authorities. The provinces were offering only technical and legal support of the process of will-formation which was taking place somewhere else (Hendriks, Raadschelders, Toonen 1995, 218-9). Each of these were more or less societies in themselves with their own political parties, newspapers, radio and television stations, trade unions, etc. (Toonen 1998, 138)

After the second World War, in the second half of the 1960s, the pillar system crumbled, and left behind a “vacuum” as regarding a formal system of regional governance. This vacuum was not filled in by the province (see also Andeweg&Irwin 2002, 163), but (partially) by the big cities, already with more experience in intergovernmental relations. This move confirmed the historical tendency in the Netherlands to define regional governance as a matter of big city management. The municipalities have been the main beneficiary of the decentralisation process[[The territorial-administrative unit which stands for municipality in the Netherlands, the gemeente, combines several cities and villiges around a centre. A big city can nevertheless form a gemeente. At this level a movement of centralisation paradoxically took place: from 1121 gemeenten in 1900 to 504 in 2000). This process continues nowadays, see “gemeenten herindeling”]] which have been taking place since then.

Following depillarisation, several attempts to reform the sub-national territorial-administrative system in order to fill in the respective “meso-vacuum” took place. One of the first proposals were the creation of geweesten, a level between the municipality and the province, through association of municipalities[[This concept is reflected now in the CoREP, which are is now NUTS 3, the gemeenten are NUTS 5.]]. In 1974 a proposal for the creation of 5 landesdelen through collaboration among provinces was launched. The pertinence of the idea was proved when, in the 1990s 4 landesdelen were delimited in order for the Dutch territorial system to comprise also NUTS I units according with the European NUTS system. Both the ideas of geweesten and landesdelen survived in time and have been often taken into consideration as solutions for administrative reforms. Their last embodiment as NUTS I and III confirms their relevance as potential new forms of meso-governments, but cannot hide the fact that they are only collaborations among gemeenten and among provinces, without any administrative status or functions. The landesdelen appear as such in the policy documents of the central government and are recognised also by the European Commission as the highest level of regional administration in the EU, despite their non-administrative status while the COREP (NUTS III) were created more for statistical purposes (Toonen 1998, 142).

Lasting changes in the constitutional structure of sub-national government haven’t taken place since than . The system has been rather tidied up than changed, this marking the institutional conservatism reigning in the Netherlands (Hendriks 1997, 373), and it got more complicated than streamlined. The “meso-vacuum” turned into a crowded, complex meso level of governance. Besides provinces and COREP, deconcentrated government agencies, new functional regions (police), water boards (waterschapen), 5 Euregios and big cities are actively involved in the policy-making process at regional level
[[At this very moment (August 2004) the situation remains unchanged. On the web page of the Ministry for Internal Affairs and Royal Relations the same main lines of the administrative reform still continuing can be observed. The major direction is strengthening the position of the gemeenten, to be able to practice “integrated” governance, through municipal re-division and reorganisation, especially in the case of small provinces where internal centralisation takes place. The gemeenten receive further competencies in unemployment policy, safety and security, quality of life, preventive youth policy. Very interesting is to see that that provinces play a role in this process: they are the ones to proposed the respective changes not the gemeenten! Further financial decentralisation is envisaged, again with the scope of financially powerful gemeenten.]].

{{2. EU Objective 1 Regional Policy in Flevoland}}

As expected, the actors involved in the drafting, decision-making, implementation and monitoring&control of the SPD 2000-2006 Flevoland are the European Commission, the national Government (three ministries), the Province and the Programma Management Europa provincial department, the municipalities and social partners from different fields, according to both the Dutch tradition and European requirements for partnership.

The activity of the PME is financed through EU money, i.e. the technical support comprised in the EPD and province money. The report between the two is 1:3 (from approximately 12 million budget for 7 years, 2000-2006, only 4 million come from the EU).

The degree of autonomy of the PME department in comparison with the Province House and other departments lies in its multi-annual budget compared with the Province budget, negotiated annually. Due to this detail the EPD 200-2006 had to be thoroughly negotiated in 1998-1999, because the Rijk, the province and the gemeenten had to engage considerable sums for a long period of time for both the activity of the PME and for co-financing projects approved under EPD. Every sum was established as exact as possible per priority and measure. The eventual changes considered necessary by the PME have to be agreed by the Provincie, Rijk, the Commission and social partners (through the Monitoring Committee). This happens most of the time smoothly, due to intense negotiation before the decision has to be officially made. Nevertheless, different cases are also registered [[Mid term review Flevoland: according to the legislation in force, the European Commission has to be only informed about this MTR. Nevertheless, in 2003 when the representative of the Commission and the Ministry for Economic Affairs (EZ) disagreed in the Monitoring Committee with a sum of aspects in the report, some changes had to be operated.]]. The European payments (voorschoten) are made directly in the accounts of the Province and if some targets were not attained the Commission has the right to require back funds from the Provincie/PME. If the province finds itself in the impossibility to return the funds, the central government is ultimately responsible with the covering of the respective debts. This provision gives the right to both the Commission and the Rijk to control the activities of the PME at any moment.
A decision between the Commission and the Rijk sets out the specific competencies and actors at national level as well as the terms of the collaboration for the implementation of the EPD. The Rijk decentralised further the tasks to the Province of Flevoland in a Decentralisation Convention.
According to the first document, the Commission has to approve the EPD, after consulting the member State, which developed the EPD according the art. 8 principles of complementarity and partnership. The EPD in the Dutch case was actually drafted by the PME, in permanent consultation with the gemeenten, the provinces, the three ministries involved and social partners. All these actors had a heavy word to say in this process, because all of them had to allocate resources for a successful implementation of the single programme. Decisions are taken after CONSENT was reached.
The Commission decision attests only that the Netherlands via its government will receive the respective Structural Funds contribution, for which the Netherlands has to invest a certain sum of money as co-financing. The Decentralisation Convention between the Rijk and the Province is the document which defines and settle exactly the competencies of the Government through its involved ministries, the Ministry of Economic Affairs, the Ministry for Agriculture, Nature and Food Quality, the Ministry for Social Affairs and Employment and the ones of the Province/PME. It is actually applying the Council Regulation 1260/1999 to the relations between Province House Flevoland, Government and the European Commission in implementing EPD in Flevoland.
The convent restates that the Member state, i.e. the national government is the final responsible for the implementation of the Structural Funds, including the EPD in Flevolands [[De lidstaat is vanuit zijn staatkundige positie en op grond van Europese wet-en regelgeving veratwortelijk voor een rechtmatig en doelmatig beheer van en controle en toezicht op de Structuurfondsen (Convenant 2001: 1).]]. As ultimate responsible and unique task delegater, the Rijk occupies a very strong position in this policy field.
Regarding the implementation of the EPD, the national government has decided that the Provincie Flevoland should fulfil the roles of Managing and Paying Authorities [[See the COUNCIL REGULATION (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds]], in partnership with the three ministries. (Convenant 2001: 1). The European funds are not transferred to the state, but directly to the Province, under the provisions of the Council regulation 1260/1999, i.e. in three annual trenches depending on the investments made and after the necessary documentation (including the declaration of the external expert) is delivered. Nevertheless, if the Netherlands is made responsible by an European institution for a misadministration of Structural Funds, these sums can be demanded back by one of the three ministries from the province, if it is proved that the province is guilty for the respective financial debts. (Convenant 2000:2). This means that, even if the Rijk is the final responsible for the implementation of the SF from a political point of view, from a financial angle the Province is the one responsible with the eventual misadministration of European funds. In case the misadministration is due to ministerial action, the ministries are the ones responsible, have to return money from their budgets (see also the WTES 2002: 2).
If any problems intervene in the financial circuit between the province and the European Commission, the ministry responsible [[for ERDF is the Ministry of Economic Affairs, for EAGGF and FIFG the Ministry for Agriculture, Nature and Food Quality, and for ESF the Ministry for Social Affairs and Employment]], depending on the fund and in collaboration with the Province and PME will promote the interest of the province and try to bring the two parts to a common agreement. (Convenant 2000:2). The ministry will be the also one suing the Commission to the European Court of Justice, if the Province ask it to (Convenant 2000:2).

Monitoring Committee is composed of representatives of the three ministries and of the ministry for Settlement , Spatial Planning and the Management of Environment, DG Regional Policy of the European Commission, the Province (the queen’s commissar who is also the committee president and a member of the regional government responsible with European affairs), of the communities/gemeenten, of the water authorities [[with special competencies and benefiting of special decision-making autonomy in the field of water and dams management.]], Chamber of Commence Flevoland, Social-economic Consultancy and Advisory Board, Federation of Dutch trade Unions (FNV) Organisations, Regional Entrepreneurs Network Flevoland, North Land and Air Organisation, Environment Federation Flevoland, Foundation Axtion. The PME fulfils the secretary function of the MC, as being responsible with the management of the programme and with regularly reporting to the MC. The presence and activity of the MS assures that the partnership principle is respected, as it gives to all interested parties the possibility to express their agreement or disagreement vis-à-vis the programmes to be implemented, eventual changes in priorities or funds allocated to these and the regular reports submitted by the PME. Nevertheless, as the MC meets only twice a year, numerous issues have been already resolved through negotiations between PME and the Commission, or PME and the Ministries. Smaller actors taking part in these meetings tend to vote with the majority, not fully using their position and power in this body.

The Programme Complement was drafted again by the PME and approved by the MC and by the regional parliament which sends it to the three ministries. The Ministry for Economic Affairs forwards this to the Commission (Convenant 2000:3-4). In several other situations it is obvious that the MEA is the most powerful ministry among the three in the particular policy field., as channel of communication between the province and the Commission. Even if the Ministries and the Commission lack according to the legislation in power, the competency to approve separately the PC, the two actors have to agree with it otherwise the Monitoring Committe won’t consent to it.

The PME applies not more than three times per year to the Commission for further funds [[The application is accompanied by a declaration released by an independent expert (accountant) which attests that the figures are exact.]], while the three Ministries only receive a copy of the application. In the Council regulation 1260/1999 the Member State should apply for these trances. The different actor, regional, chosen to fulfil this very important role determines the degree of decentralisation of the system in place for implementing European Regional Policy.
8 weeks after each quarter of a year the Province/PME informs the three ministries about the progress registered with the implementation of the EPD. The MEA Secretary will keep the Parliament (2nd Chamber) informed about this progress, on the basis of this information and the yearly rapport submitted by the PME. (Convenat 2000: 5). Besides the three ministries, the European Commission and the European and the Dutch Court of Auditors, an external expert / accountant has to verify the implementation of the EPD. His rapport will be comprised in the yearly report to be approved by the Monitoring Committee.

The Province/PME is responsible with the drafting of the yearly and final report regarding the implementation of the EPD and submitting it directly to the Commission. The ministries receive a copy, too (see also WTES 2002:1). Following this the Commission and the Province (PME) are discussing together, directly the results of the reported year. The ministries can participate if wanted. The Province together with the three ministries decide the answer to be given to the remarks the European Commission made on the respective report. (Convenant 2000: 8)
The province is responsible with the ex ante evaluation of the EPD as well as with the mid term ex ante evaluation. The European Commission and the ministries are consulted in this process. If the ex post evaluation is to be made by the MS, the Province will be the one in charge with it. The ministries are informed about the results of the final evaluation. They can set out rules for the way the Province/PME fulfil their informing obligation, report periodically and are offering further information if required (WTES 2002:2).The ministries offer also advise to the Province if approached and consulted by the Province.

{{3. Some conclusions}}

The provinces position in the multi-level governance system in the Netherlands remains the one prescribed by Thorbecke 150 years ago and there are no facts indicating that maybe, one day, the provinces will become containers of significant power in this structure and surpass the gemeenten. In its unique position of Objective 1 region Flevoland tries to alter this balance of power in its favour, at least with regard to European Regional Policy, but it is not clear yet if successful. Nevertheless, despite the temporality of this structure, two aspects become obvious: the Dutch administrative traditions shape the policy-making process at national level and the European Regional Policy seems to affect the governance system in the Netherlands in the sense the European Commission wanted: it strengthens the position of the region against the central government.

Principles as subsidiarity, decentralisation, co-operation, consultation, consensus, flexibility, efficiency practised for centuries make a difference when one compares the Dutch system with, for example, the Romanian one (see previous papers). If the central government still keeps an eye on the activity of the province, the later, in collaboration with the gemeenten and social partners, takes full responsibility of the SPD management, has direct contact with the European Commission and posses the expertise in the field.

On the other hand this strong position vis-à-vis the central government and gemeenten was facilitated exactly by the Objective 1 Structural Funds implementation work in the region, by the region. The other provinces, still implementing SF but Objective 2 or 3, the political will could not concentrate against the central government around this issue as strongly as in Flevoland, even if all provinces, through the Inter-Provincial Conference (IPO) support the common position of preserving a “traditional” regional policy in all regions against focused economic policy in the urban Randstad.