2020/01/01 by László Vértesy · 1 citation
Economics, Econometrics and Finance · Social Sciences · #Bailout #Business #Consolidation (business) #Debt #Debt ratio #Debt service coverage ratio #Debt-to-GDP ratio #Economic policy #Economics #Euros #External debt #Finance #Financial crisis #Fiscal Policies and Political Economy #Government debt #Internal debt #Local Government Finance and Decentralization #Local government #Macroeconomics #Political science #Public administration #Regional Development and Policy
paper · pdf · doi:10.32575/ppb.2020.1.8
openalex publication_date 2020/01/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/02
A considerable part of public debt originates from the budgetary practices of local governments: this amounted to nearly 850 billion euros, which was 6.7% of the EU-28’s general government gross debt in 2018. This paper briefly presents the magnitude and relevance of local government debt at a national level, then it outlines the effective debt management strategies taking a multi-level governance approach. Four debt management categories can be classified: changing the conditions, repayment strategies, additional resources and, finally, state intervention. Unfortunately, there are no good/best practices for the first two methods. For additional resources, in some Mediterranean and Scandinavian countries, state or local government-owned specialised financial institutions were established, while in other European countries, the state pays the bailout or consolidation by overtaking the unsustainable local debts. In most cases, only the direct and/or indirect state intervention methods were proven to be successful solutions.