'National governments declining in importance'

This is true for not only for policies such as local infrastructure but also for education, social protection, housing and health care.

Meanwhile, regional and local public spending has increased in most member states and local authorities are broadly accounting for a larger share of the general government deficit.

To this trend comes the transfer of core state activities such as budget planning and spending to the EU level.

"In my opinion national central governments will become less important and will lose more power. They will become more and more impotent," says Franz Schausberger, founder of the Austria-based Institute of the Regions of Europe.

Regions have to become stronger

To compensate, he notes, "regions have to become stronger so that the citizens can strengthen their identity and participate in regional and local democracy."

But Schausberger, who is also a professor of modern history at Salzburg University, says calls for decentralisation are not to be conflated with the "separatist" movements of Flanders, Scotland and Catalonia.

"The independence movements in these countries have different historical, political, economic and mostly nationalistic causes."

"If people with the regions are satisfied then the common Europe will be strong. If not, then we will have the contrary development. I always say that decentralisation is the contrary of separatism."

To the criticism that regionalism, particularly in richer areas, can seem like a call to close the door to less well-off regions, Schausberger answers that solidarity "must exist in Europe."

That richer regions such as Salzburg pay a bigger contribution to the common Austrian pot than poorer regions is clear to a "certain limit"

"In economically good times, it is no problem that the regions are paying into a common pool for the whole state, but if there is an economic crisis, then they also feel it," he says, in reference to Catalonia, where there is a strong independence movement and anger at the level of transfers its makes to the rest of Spain.

"They say: it is no longer so easy for regions to pay and they look for something in return – such as own taxes and fiscal decentralisation. Then the central government has to discuss with them. If they don't they will look for a radical solution."

The other danger the current economic crisis brings with it, according to Schausberger, is the "general trend" across Europe of central governments cutting back on regional spending.

New EU EU treaty

In Austria, which along with Belgium and Germany, is considered to be a fully federalised state, "there are a lot of discussions, as well as concrete moves, to reduce local and regional democracy."

"But you need to offset national governments losing power. People should have the possibility to identify more and more with their regions as a counterpart to the not very transparent but more powerful Europe."

His answer is a new treaty convention with a "major focus" on decentralisation. Brussels should stick to "major issues" such as economic governance and stop trying to regulate in the minutiae.

"The national level will never disappear but there should be an equal importance between Brussels, national and regional levels," he said.

This story was originally published in EUobserver's 2013 Regions & Cities Magazine.

Click here to read previous editions of our Regions & Cities magazine.