ECLSG

AcronymDefinition
ECLSGEuropean Charter of Local Self-Government
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A threshold value among countries with a high level of compliance with the studied basic principles of ECLSG or a high degree of decentralization according to the number of LGUs (high compliance of existing fiscal decentralization systems with the ECLSG 1 guidelines, hereinafter SSM1) and countries with a medium level of compliance with the studied basic principles of ECLSG or an average degree of decentralization in terms of LGU number (medium compliance of existing fiscal decentralization systems with the ECLSG 2 guidelines, hereinafter referred to as SSM2) is represented by countries ranked in most indicators (four out of five) to S1.
As seen in Table 2, only two of the EU-28 are ranked to S1 in four out of five CIFD indicators; Italy and Belgium consequently achieve high compliance of their existing fiscal decentralization systems with the ECLSG (SSM1) guidelines.
This implies that the fiscal decentralization systems of these countries are not fully in line with the ECLSG guidelines.
In continuation, we will thus check whether each country, which is classified as SFD1 according to the CIFD value, is also ranked as SSM1 according to the achieved level of compliance with the individual fundamental principles of ECLSG or the degree of decentralization according to the number of LGUs.
On the vertical axis the EU-28 countries are classified into one of the groups (SSM1, SSM2, SSM3) according to the evaluation of the achieved level of compliance with the individual fundamental principles of ECLSG or the degree of decentralization according to the number of LGUs.
A brief EU-28 review shows that Italy and Belgium demonstrate a high level of real effectiveness of existing fiscal decentralization systems, reflecting a high degree of fiscal decentralization (SFD1) and high compliance with the ECLSG (SSM1) guidelines.
Furthermore, we notice that countries such as France, Germany, Poland and UK achieve a high level of fiscal decentralization with respect to the CIFD (SFD1) value while achieving a medium level of compliance with the ECLSG (SSM2) guidelines.
The Netherlands and Finland are countries that are classified to SFD2 according to the CIFD value and to SSM3 according to the achieved degree of compliance with the ECLSG guidelines.
Countries, such as Bulgaria, Ireland, Luxembourg and Slovakia, are classified as SFD3 according to the CIFD value and to SSM2 according to the achieved level of compliance with the studied fundamental principles of ECLSG. Consequently, these countries are far from achieving a high level of substantive effectiveness of their already existing fiscal decentralization systems.
The purpose of this section is to present a simulation of the empirical CMFD that reflects a high degree of fiscal decentralization and a high level of compliance with the fundamental principles of ECLSG ([IF.sub.i], [IS.sub.i], [IA.sub.i], IL) or a high degree of decentralization in terms of LGU number ([IR.sub.i]).
Paragraph 3 of Article 4 of ECLSG states, inter alia, that public tasks should be exercised by those authorities which are closest to citizens.
For a country with CMFD value equal to or greater than 0.791, we can confirm that its existing fiscal decentralization system achieves a high level of efficiency as it reflects respect for the most important ECLSG guidelines.