Portuguese intermunicipal organization - Basic principles

Portuguese territorial organization has two levels of territorial decision support legitimated: central and local/municipal government (municipalities). The lack an intermediate level of support decision between those levels is a central problem on territorial decision support system. Intermunicipal organization level can it play an important role as an intermediate level of decision-making process. After rejection of the regionalization process in 1998, trough popular referendum, Portuguese government has approved two laws of the Public Administration Framework Reform - Metropolitan Areas Act and Intermunicipal Organization Act (13th May 2003). Metropolitan Areas Act establishes two ways to promote the intermunicipal organization among municipalities: Great Metropolitan Areas (more than 350 000 inhabitants) and Urban Communities (more than 150 000 inhabitants). Intermunicipal Organization Act also establishes two ways to promote the intermunicipal organization between at least two municipalities: Intermunicipal Communities of wide Scope and Intermunicipal Communities of Specific Scope. This paper aims to present and discuss a set of basic principles towards success of this reform, and at the same time, to present some results of the research developed by the author of the paper.

New Constitution, New Europe: What About (Fiscal) Federalism?

More than fifty years after the Schuman Declaration, Europe is still far from a real Political Union. In fact, Europe faces an important imbalance between the two sides of the integration process, appearing as an important actor in the international economic scenario, but as a minor actor in the international political arena. In this paper, we start by arguing that the “small steps” strategy that led Europe until the present situation is no longer sufficient to let the Union efficiently overcome its present deficits and challenges. So, we call for an important change in the institutional and economic organisation of the EU, towards a model of largely decentralised federalism. By examining the present challenges for EU and the characteristics of the proposal for an European Constitution designed by the Convention, as well as comparing the main federal systems existing in the world today, we argue that the mentioned proposal is not enough to give the EU a strong voice both in the political and the economic areas. In this context, we discuss the design of an adequate institutional framework for the political organisation of the EU, presenting an alternative proposal based on the characteristics of a truly federal system, also as its consequences in what concerns the design and implementation of European economic policies. Keywords: European Union, Political Union, Federalism, Fiscal Federalism, European Constitution

COMPETITIVENESS OF NATIONS IN THE GLOBALIZATION ERA: IS THE (IN)EXISTENCE OF A COLLECTIVE STRATEGY RELEVANT?

Economic globalization puts businesses and countries facing new opportunities and challenges and engenders a high degree of uncertainty/risk. Portugal, facing this new global environment, has been experiencing poor economic performance, growing in the last decade at a rate lower than the European Union’s average. How to seize opportunities and overcome challenges, while at the same time ensuring the desired convergence? This challenge is put in terms of the relations between the regulatory and economic policies of States and the competitiveness of nation-States. Using concrete examples, in particular the Portuguese case, we will attempt to answer the question: does the existence (or absence) of a collective strategy, understood as a concerted strategy between the State and companies, their associations and other institutions, produce significant impact on the competitiveness of Nations? To answer this question, the analysis will focus on the following topics: challenges posed by globalization in terms of competitiveness of countries; evolution of the Portuguese economy, between 1975 and 2007, compared to those of Finland, Ireland and South Korea, countries of recognized success in the context of globalization; lessons that can be drawn concerning the presence or absence of a collective strategy and its impact on the competitiveness of these countries.globalization; competitiveness; institutions; total factor productivity; collective strategy; Portugal

How far from Just-in-time are Portuguese firms? A survey of its progress and perception.

As competition increases, Just-in-Time (JIT) manufacturing becomes an important issue in Portuguese industry. After a brief review of its history, elements, advantages and limitations, this paper presents the results of a postal questionnaire survey about JIT system sent to a sample of manufacturing firms in Portugal, with the aim of determining the degree of development, perception and status of JIT production in Portuguese industries. The findings suggest that the surveyed firms have a basic JIT perspective: a tool to reduce inventories, to increase quality and to eliminate waste. Despite the good perception of the JIT concept, less than 6% of the firms surveyed have the necessary conditions to successfully implement a JIT system.just-in-time, Portuguese industries, manufacturing

Financial Autonomy of the European Union after Enlargement

One of the most important and current problems in the European Union (EU) public finance concerns its system of own resources. Almost all economists involved in the subject agree that the present system needs a comprehensive reform, as it does efficiently allows to deal with the new reality of the enlarged European Union. However, there is quite a divergence on how to do the reform, the problem lying in its range and directions. In general some economists postulate to extend the EU tax base by the creation of one or more new EU taxes whereas others opt for simplifying the system by replacing traditional and VAT resources with the so called ”fourth resource”. These differences mainly result from dissimilar approaches of economists to the criterion of financial autonomy. The main aim of this paper is to evaluate the present system of EU own resources and the proposals of its reform owing to the criterion of financial autonomy.EU budget, own resources, financial autonomy

Fiscal Federalism in the European Union: How Far Are We?

In this paper, we compare the present process of definition and implementation of fiscal policies in the European Union with the main conclusions of the “fiscal federalism” theory. This is done in order to draw possible lessons for future evolution, particularly taking into account the possibility of creating a European “Federation of Nation-States”, which we supported in a previous work. We argue that these main conclusions are easily compatible with the emergence of a largely decentralised “Federation”, but are still far distant from the present situation. In this context, we argue for several important lines of change in the short-run, namely an effective change in the process of coordinating fiscal policies and a credible reform of the Stability and Growth Pact, and in the medium-long-run, namely an important increase in the size of the European budget.Fiscal federalism, fiscal policy, European budget, fiscal discipline

“To Deficit or Not to Deficit”: Should European Fiscal Rules Differ Among Countries?

The creation of the European Monetary Union has led to a substantial increase in the discussion of the importance of fiscal discipline and adequate fiscal rules in such a monetary union. The “European” solution has been challenged by many authors and politicians: among the main questions discussed in recent years, we find the use of the same rules for different situations in Member-Countries, particularly in terms of economic dimension and economic level of development. We develop a model of a monetary union between two countries that may differ in economic dimension and in the level of development. By solving transitional dynamics towards the steady state through numerical computation, the model allows us to examine the impact of fiscal shocks that may lead to excessive deficits. Our results suggest that the implications of such deficits depend on whether they occur in the small and less developed country or in the big and more developed one. In this context, we argue that an excessive deficit should be temporarily allowed in the case of the small and less developed country, in order to improve economic convergence and wages within the union.Monetary Union; SGP; Excessive Deficits; Technological-Knowledge Gap; Numerical Computation.