The financial crisis and the resulting austerity measures implemented in the recent years across Europe have had severe negative effects at the sub-national level, with a sharp decrease in funding available for public investment and pressures to cut the costs of the delivery of public policies at the local and regional level. These factors have triggered transformations of governance patterns across many of the EU member states and stimulated experimentation with new instruments and practices to overcome the budgetary limitations and attempt to deliver effective public policies despite the austerity measures. EU cohesion policy, being the EU’s key structural investment policy, also finds itself in the spotlight and under considerable pressure. On the one hand, in the ongoing EU budget negotiations the net contributor countries are keen to reduce the expenditure on supporting regional economic development in the lagging regions of the EU, while critics of the policy argue that it is not delivering tangible results in bridging the development gap between the leading and lagging areas.  On the other hand, cohesion policy, being a sophisticated investment policy aiming at achieving the EU’s strategic goals through targeted financial support, can (and is expected to) play a major role in efforts to stimulate growth and counterbalance the negative effects of the global economic slowdown and public debt crisis.

Against this background, this double session will look into the effects of the crisis and austerity measures from a sub-national perspective, which have so far been largely overlooked in the research to date.

This first part of the session will focus on the impacts of the crisis on the activities of the sub-national authorities and their capacity to deliver public policies. Chris McInerney and Maura Adshead will document the gradual deinstitutionalisation of local governance in Ireland and will question the degree to which the remaining, core local government structures have the potential or the desire to act as vehicles for social and economic cohesion. Judit Kalman will look into the Hungarian sub-national governments’ responses to the fiscal crisis in terms of changes in their management and governance styles. Arnau Gutierrez-Camps will use the example of Barcelona to show how the crisis increases competition at the local level but also stimulates transnational engagement. Mike Danson will investigate this issue from a comparative perspective by explaining how sub-national actors across Northern European countries engage in international networks and cooperations to overcome the funding squeeze resulting from the crisis, with a focus on the role of the North Sea macro-region as an innovative transnational governance instrument. Christopher Huggins will then address the important question of the added value of transnational networking at the local level, drawing on an in-depth comparative study of England and France and deepening the understanding of the dynamics of EU governance from a local perspective. Roger Lawrence will play the role of discussant and bring in the practitioner’s perspective to the debate.

The second part will focus on the effects of the crisis on EU cohesion policy and regional governance.