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Conference on the role played by local government authorities in developing the local economy

Published: May 25, 2016

On 25 May 2016, a conference was held in Moscow on “Developing the local economy: the role of local government authorities”. The conference was organised by the IRZ together with the Russian Committee for Civil Initiatives (KGI). This event was part of a project financed by the German Foreign Office on “Supporting legal collaboration in the Russian Federation”.

Leading Russian academics from the fields of community and tax law, experienced financial experts and local government agency representatives took part in the conference. From the German side, the former Mayor of Schweinfurt, Gudrun Grieser, and the Managing Director of GRIBS (a company offering advice and consultancy for innovations and start-ups based in Schweinfurt, Germany), Reinhold Karl, took part in the event.

The Russian speakers reported on the legal and administrative options for local communities to support small and medium-sized enterprises (SMEs). The individual mechanisms for providing legal support and the potential for providing informal support and advice were discussed. Questions were raised about the lack of efficiency in implementing legal measures for supporting SMEs. The Russian experts provided an in-depth insight into the fiscal and banking regulations for supporting SMEs. In this respect, the advantages and disadvantages of the Russian system of collecting taxes in the workplace rather than at the home of the tax-payer were discussed, amongst other things. Small communities situated close to larger and economically stronger towns (satellite communities) are at a particular disadvantage thanks to the current tax collection system, which means that there is no or insufficient motivation to support economic development at community level.

The German speakers presented both the legal foundations and their practical experience of community support for the local economy. They explained, amongst other things, the relevant provisions of the German Commercial and Civil Codes (HGB and BGB), the law on limited liability companies (GmbHG) and trade regulations (GewO). They also reported on community support for the economy through the optimisation of location factors, such as the designation of adequate commercial premises, the efficient exploitation of industrial estates, attractive local taxes and the development and support of business incubators sponsored by the community. Further potential for community support for the economy through the upkeep of location factors, such as the community allocation policy, town planning that takes start-ups into account and building permit processes, was also discussed. The German representatives also provided a comprehensive overview of the existing programme in Germany for supporting SMEs. Following the lectures, there were some lively discussions about the similarities and differences between the various measures and mechanisms for supporting SMEs in Russia and Germany.