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    Ukraine: Decentralisation success with many challenges

    CoR-Task Force on Ukraine met near Lviv. Decentralisation reform in Ukraine is
    currently focusing on the local level

    Ukraine has made considerable progress in a relatively short period of time in fiscal and sectoral decentralisation: Amendments to the budget and tax codes have given local government new budgetary powers. In 2016, the local budgets of amalgamated communities amounted to 281 million UAH. Their own local revenues increased by three times compared to 2015. This increased municipalities’ ability to improve services and infrastructure.  It is necessary that the Ukrainian government keeps continuity in funding for the newly amalgamated municipalities. Constant changes of funding from central government to local government and changes in rules for tax revenues are counterproductive. To get used to the new conditions municipalities need reliable revenue flows.

    An outstanding voluntary amalgamation process of small municipalities reduced the high number of small municipalities and villages. The new hromadas (communities) formed so far might be the “low hanging fruits”. These communities often unite the most active mayors and citizens and their amalgamation was voluntarily. Within less than two years over 1800 municipalities have merged voluntarily to create 413 communities (“hromadas”), a number much higher than experts ever expected.

    Franz Schausberger with the mayor of Lviv, Andriy Sadovyy
     Franz Schausberger with the mayor of Lviv, Andriy Sadovyy
    For the remaining ones we expect much more difficulty. We must remember that hundreds more are needed, so the amalgamation process needs to be continued. Sectoral decentralisation in a number of sectors e. g. in the areas of health and education were implemented with others to follow.

    Major obstacles – such as inexperience of local authority staff, especially in managing budgets and legal uncertainties on the rights and responsibilities of new municipalities – must be accounted for Rayon/oblast state administrations continue to block local initiatives and substitute functions of local self-government bodies. There are still weak links between regional planning, budget management and project formulation and a lack of public oversight alongside low citizen awareness and trust.

    One key element of the support of the EU, including the Committee of Regions, is to share relevant experiences about successes, but also about risks and even failures. This sharing is about learning from each other, not copying. The system of government and responsibilities at different levels in EU Member States are very different, and reflect very different administrative traditions. Ukraine needs to finds its own system of checks and balances between national and local levels.
    It seems that there is a need for careful reflection on how to proceed further with the reform of state administration and self-government bodies at a regional level. A careful step-by-step approach is recommended. But Government and Rada (parliament) seem not to be capable or sufficiently interested in adopting legislation in support of the decentralisation process.

    The European Union supports the decentralisation reform not only with words but with concrete actions, with technical assistance and significant financial support. One of the main EU programmes is U-LEAD, a joint programme of the EU and its Member States Denmark, Estonia, Germany, Poland and Sweden. The EU is committed to support the reform process with significant amount of funds, exceeding EUR 200 million, mostly (102 million) from U-LEAD. The assistance is delivered through 24 Regional Centres all over Ukraine. These regional centres are very important platforms, providing tools to support the bottom-up dimension of the reforms. 

    The goal is to bring decision making closer to the Ukrainian people and in this way, helping Ukraine to build a more effective and transparent system of multi-level governance, ensuring benefits for ALL citizens. The Decentralisation process is crucial for achieving this result and, therefore, an integral part of the European integration process of Ukraine.

    These were the main results of the Third Meeting of the “Task Force on Ukraine“, organised by the European Committee of the Regions, held in Khyriv, Ukraine, on 30th of June 2017. IRE-chairman Franz Schausberger, in his capacity as special adviser of Johannes Hahn, Commissioner on enlargement and neighbourhood policy, mentioned in his speech the European Court of Auditor’s criticism that the EU funds unfortunately are not always allocated to the intended beneficiaries in a proper, transparent and impartial way by the national authorities of Ukraine.



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