With the presence of Manuel Chaves, Third Vice-president and Minister of Territorial Policy and Public Administration of Spain, Joan Clos, Executive Director of UN-Habitat, Pedro Castro, Mayor of Getafe and President of the Spanish Federation of Municipalities and Provinces, Antoni Fogué, President of the Diputación de Barcelona and Clarence Anthony, Acting Manager of United Cities and Local Governments, UCLG’s Second Global Report on Decentralisation and Local Democracy was presented in Madrid. Under the heading of “Local Government Finance: The Challenges of the 21st Century”, the publication examines the situation of local finance in the various regions of the world and presents the challenges that local governments face with the current global economic crisis.

Following the words of Pedro Castro who considered the GOLD II report a reference for his institution the FEMP, Antoni Fogué presented the report’s findings. He stressed that “without autonomy and adequate resources local democracy is in danger.” The current economic and financial crisis has revealed structural problems with relation to local democracy: “While local governments in the European Union spend on average € 3,250 per capita, in Africa this average is only 24 €. To meet the challenges of an increasingly urban world, UCLG estimates that more than 200 billion dollars annually will be required in urban infrastructure, in developing countries alone.”

Echoing these words, Joan Clos on behalf of UN Habitat emphasized that “countries that work best, and which have the most important growth indicators, are in many cases the most decentralized countries.” He warned of the implication of the unprecedented wave of migration towards cities which are being seen mostly in Asia and Africa and which poses a challenge for the development of urban infrastructure and services.

“Support to municipalities is fundamental in the fight for democracy” said the Vice president Manuel Chaves, pledging that his government “will not take steps back to (…) a centralized model, which in the past was a resounding failure.”

Clarence Anthony thanked the participants, on behalf of UCLG, and invited -in a meeting with Vice President Manuel Chaves- to deepen the cooperation between the Spanish government and the world organization of local authorities.

All agreed that to tackle the crisis it is necessary to optimize the use of resources, and to make progress in improving management and coordination mechanisms between different levels of government, be they local, regional, national, European or global.

Among the key recommendations in the report are the need to clarify the responsibilities of local governments, increase the autonomy of local governments in tapping sources of own income, diversify the local tax system, establish stable transfers based on results and promote innovative approaches to public management.