The introduction of EU funding programs in Greek cities has led to the emergence of local partnerships and democratic practices of the local community. Starting from a neo- institutional approach and based also on theories of Europeanization, this paper aims to trace the interactions horizontally, between the institutional context of partnerships and partners practices and vertically, between local government and the State. It is argued that it is not only formal institutional rules that matter but also informal rules and practices like unequal power and resources, prior history of democratic institutions and processes, existing networks, contextually specific values and beliefs of actors and level of decentralization. It is suggested that the local partnerships funded by EU programs have their own internal dynamics built on the emerging practices of actors and the impact of the larger political system and level of social capital. And it is finally these dynamics that influence the development of the democratic quality of local communities. The paper draws evidence from the case study of two local partnerships in the region of Crete (Greece) established by the EU Community Initiatives Programs EQUAL and LEADER coordinated by the Development Agency of Heraklion. The case study reveals the informal rules governing the relations of partners and criticizes the democratic credential of “partnership” regarding interest representation, community participation, accountability and local autonomy. However, processes of policy learning and capacity building have also arisen presenting new challenges favoring collaboration and empowerment of local civil society and local authorities vis a vis the State.
