Austria

YES direct effects

This involves investments with banks that will no longer be able to meet their commitments or that will no longer be able to meet them in full and with regard to which guarantees/insurance polices are also defaulted upon. Repercussions on the labour market: reduction of employment already tangible, part-time employment instead of full-time, etc.

No municipalities or regions unable to solve problems by themselves.

Belgique (Région de Bruxelles Capitale)

NON

Toutefois, il est impossible aujourd’hui de préjuger de la situation future ou d’évaluer objectivement l’impact futur de la situation bancaire en Belgique (notamment en ce qui concerne DEXIA et les dividendes que la banque offre annuellement aux communes actionnaires).

Belgium (Flemish Region)

-

The financial-economic crisis will have an impact on local government in the coming years.

Local government will receive fewer revenues and will face a decrease in dividends and a more expensive debt financing. At the same time, local government is confronted with rising costs related to employees (financing contractual workers and their pensions), to the investments for the construction of sewer systems and water treatment, to the public centres for social welfare, to the local police and to the reform of the fire service.

No municipalities or regions unable to solve problems by themselves.

Belgique (Région de Wallonie)

NON

Non, il n’y a pas des collectivités territoriales qui suite aux préjudices subis se sont trouvées dans la situation où elles n’ont pas pu régler de manière autonome les problèmes urgents.

Le Gouvernement de la Région wallonne a malgré tout décidé d’octroyer une aide financière.

Le Gouvernement de la Région wallonne a décidé d’octroyer une aide exceptionnelle de 20 millions EUR sous la forme d’une dotation libre de toute affectation pour aider les collectivités locales à faire face aux effets de la crise.

Bulgaria

YES direct effects

Among the municipalities, which have been worst hit by the adverse effects of the financial crisis, are those, which have suffered severe cut down of some production lines and that has had a negative effect on the incomings from own revenue and has led to an increase of unemployment rates and impoverishment of the local population.

Measures taken by central government

The major tool of the Government to counteract the crisis represents a set of proposed measures grouped in three packages:

1. The “Economic Activity” Package: These are the measures oriented towards expansion of the public investments programme, envisaging growth by some BGN 900 million of the capital expenditure under the consolidated fiscal programme for 2009 as compared to the 2008. By increasing the funds for public investments in the 2009 budget the Government will create favorable and stable conditions for development of the business sector and promotion of investments, In addition, the state will initiate the establishment of a state-owned company for building of business-parks with a view to creation of conditions for attraction of highly productive investments and for more favorable business environment.

2. The “Market Flexibility” Package: It comprises measures in support of economic sustainability, aimed at improvement of the access to financing for small and medium-sized enterprises, broadening of the public investments programme, improvement and optimization of the business climate. Measures are envisaged for motivation and development of small and medium-sized businesses – an opportunity for ensuring access to credit resources for small and medium-sized businesses through increase of the capital of the Bulgarian Development Bank plc. ; ensuring better conditions for municipalities for preparation and implementation of projects financed by the European funds, through increase of the equity capital of the FLAG Fund; improvement of the export opportunities and raising of the competitive capacity and the export potential of Bulgarian businesses through increase of the credit limit of the Bulgarian Agency for Insurance of Export; promotion and raising of the efficiency of research and development activities in support of technological renovation and restructuring of the economic sector through establishment of Research and Innovations Fund on the basis of the existing Research Fund and National Innovations Fund, coupled with increase by 50% of the allocated financial resources as compared to the resources available in 2008.

3. The “Flexibility of Social Networks” Package: This package aims at ensuring flexibility and safety on the labour market, whereat the envisaged measures are oriented towards promotion of employment opportunities, protection of employment and upgrading of the social networks and increase of their effectiveness for the purposes of facing the unfavorable consequences of the global crisis.

Estonia

NO

Finland

NO

France

NON

Le Gouvernement français a de manière permanente des dispositifs d’aide financière aux communes très classiques et financièrement très limités. Il les mobilise chaque année pour quelques collectivités qui sont exposées à des difficultés. Ces dispositifs n’ont été ni activés, ni renforcés en raison de la crise économique.

Greece

NO

Hungary

NO

The indirect effects in which not only the local governments but the whole public and private sector is affected are more vigorous than the direct ones. E.g.

- weakening of the credit market can cause hardening of loan terms to local governments (Although the local governments are not standing before problems in taking up credits, but this is also caused by that phenomenon that local governments prefer issuing bonds instead of applying loans, because bond issue not falls under legal borrowing limits)

- adjournment of the “13^th month” allowance  for the public servants in 2009  and the cancellation of this year wage development resulted considerable depriving of financial sources in the local governments subsystem of the budget too

Measures taken by central government

N.B. Although there was no necessity for intervention affecting a single settlement, but the central government made several measures for the general treatment of the problems arising/or can be arise from the crisis.

Ireland

YES direct affects

Funding from central Government has been affected by the ongoing pressure on the public finances. Local authorities had made adjustments to both their costs and income expectations in their 2009 budgets – including reductions in payroll, consultancy costs, etc.

No municipalities or regions unable to solve problems by themselves.

Italy

NO

The crisis has an indirect effect on a general national level.

Luxembourg

NON

Monaco

NON

Netherlands

YES direct effects

This involves investments with banks that will no longer be able to meet their commitments or that will no longer be able to meet them in full and with regard to which guarantees/insurance polices are also defaulted upon.

No municipalities or regions unable to solve problems by themselves. It is safe to say that central government has given support to joint action for reclamation.

Norway

YES but not severely

A few local authorities have suffered losses due to realization of financial investments. Some local authorities will have to post deficit on the annual accounts due to lower values on their financial investments. A few of the municipalities have had temporary problems raising loans.

No municipalities or regions unable to solve problems by themselves.

Portugal

YES direct effects

Increase of the average stated period of payments.

Municipalities were place in a situation where they were unable to solve acute problems by themselves.

Measures taken by central government

Credit facilities aimed at reducing the average stated period of payment of municipalities and regularizing short term debts to suppliers (specific program designed for all the levels of government in which 40% of the loans are assured by the central State and the 60% by private financial institutions).

Romania

-

Measures taken by central government

The Ministry of Administration and Interior has sent a circular to prefectures in the territory to collect data on income and expenditure of local authorities in order to perform an analysis of economic and financial current situation of local authorities.  The information requested by the Ministry of Administration and Interior from local authorities will be used in an analysis aimed at identifying a potential financial crisis or insolvency situation regarding law no. 273/2006 on local public finance, and art. 74 and art. 75:

“Art.74. – (1) The administrative-territorial unit is considered to be in a financial crisis if it founds itself in the following situations:

(a) non- payment of the cash and payment due obligations, older than 90 days and which exceed 15% of the annual budget;

(b) non-payment of salaries, foreseen in the budget of income and expenditure for a period longer than 90 days from the maturity date.

(c) when calculating the criterion foreseen at letter a), the cash or payment due obligations which are in contractual dispute are not considered.

Art. 75. – (1) The administrative-territorial unit is considered to be in an insolvency stage if it meets one of the following situations:

a) non-payment of the cash and payment due obligations older than 120 days and which exceed 50% of the annual budget, without taking into account the funds in contractual dispute;

b) non-payment of salaries, foreseen in the budget of income and expenditure for a period longer than 120 days from the maturity date.”

Once the review is finalized, the anti-crisis measures will be adopted by the Government with a view to improve the economic and financial situation of local authorities.

Currently the Government is in the process of drafting anti-crisis measures to be promoted through the law of the state budget and by separate acts.

Slovenia

NO

Sweden

YES

The answer is yes, but the direct adverse effects from the financial markets are limited. More important are the effects from the impact of the financial crises on GDP growth and employment, since 70 per cent of local government revenues are income tax, levied mainly on salaries and wages.

Local authorities may have made losses in terms of lower values on financial assets, but as long as such assets are not sold this effect does not have to be taken into account when assessing if a local authority has fulfilled the balanced budget requirement as stipulated in the Local Government Act.

Also, local authorities which have borrowed on short terms may face problems when negotiating new terms. However, there are no or few signs of such effects.

No municipalities or regions unable to solve problems by themselves.

Suisse

OUI

Diminution des recettes fiscales.

Non, il n’y a pas des collectivités territoriales qui suite aux préjudices subis se sont trouvées dans la situation où elles n’ont pas pu régler de manière autonome les problèmes urgents.

United Kingdom

YES direct effects

Many local authorities had investments in Icelandic banks.

As a result of the economic downturn, authorities are experiencing a loss of revenue from planning fees, car parking and other revenues which authorities can charge.

There were no authorities facing immediate cash flow problems as a result of the failure of the Icelandic banks, and no effect on their delivery of key services, the payment of staff or their ability to meet contractual obligations.

However, Government has helped by introducing a regulation to allow authorities to delay accounting for the possible losses from the principal sums invested in Icelandic banks until 2010-11. It also helped by funding sector-led financial expertise for a small number of authorities following the collapse of the Icelandic banks.

Austria

YES, concrete arrangements

NO

Belgique (Région de Bruxelles Capitale)

NON

NON, car l’Administration centrale (c’est-à-dire fédérale) n’a plus aucune compétence sur les pouvoirs locaux bruxellois. Le gouvernement régional, quant à lui, s’est déclaré vigilant et solidaire avec les pouvoirs locaux, notamment en  intervenant dans l’augmentation de capital de la banque DEXIA.

Belgium (Flemish Region)

-

-

The Flemish Government will examine if local government will need more financial support to compensate for receiving fewer revenues.

Belgique (Région de Wallonie)

OUI

Négociation entre l’Etat fédéral et les Communautés et Régions pour négocier une intervention dans la recapitalisation de certains organismes financiers dans lesquels l’Etat était représenté.

NON

Bulgaria

YES, but no concrete arrangements

YES

Aspects considered:

By virtue of the Law on the State Budget of the Republic of Bulgaria for 2009 it is envisaged that the endorsed budgetary allocations from the central/state budget to the budgets of the municipalities during the year 2009 will be fulfilled up to 90% and the remaining 10% might be remitted partially by virtue of a specific act of the

Council of Ministers taking due account of the estimates and forecasts of the macro-economic and budgetary indicators for the current year.

Provided the effect of the global financial crisis on the Bulgarian economy was aggravated and the budgetary revenue began to diminish, the losses will be compensated through curtailing of certain expenses and utilization of part of the surplus revenue (laid down as 3% of the GDP).

The bumpers laid down in the 2009 budget will be able to meet between 4.7% and 0% deviations in the planned economic growth. A bumper of 10% has been envisaged in the expenditure part of the budget for limitation of non-interest-bearing expenditure and transfers under the state budget in the event of non-implementation of the revenue under the consolidated fiscal programme, which might lead to deterioration of the budgetary balance of accounts under the consolidated fiscal programme, expenditures and transfers from the budget.

Another protective mechanism has been established through the dispositions of Paragraph No. 25 of the Law on the State Budget of the Republic of Bulgaria for 2009. The servicing banks guarantee to the benefit of the Ministry of Finance the available monetary assets of the budgetary enterprises (including those of the municipalities) through freezing of state securities, amounts receivable under different accounts and other assets of the servicing banks.

According to Item 7 of the same Paragraph of the Law, in the event of insolvency of a bank servicing budgetary enterprises (including municipalities), the securities, amounts receivable under different accounts and other assets, which serve as collateral, shall not be incorporated in the insolvency mass and shall be placed under the ultimate disposition of the Minister of Finance.

Concrete policy measures:

-

Nature of these measures:

-

Estonia

YES, no concrete arrangements but ongoing discussions how to design measures to solve possible revenue shortcomings of municipalities (to direct small share of equalization fund money to municipalities in financial difficulties).

NO

Finland

YES, concrete arrangements

There have been discussions of the situation and some preliminary calculations have been made how the crisis is possibly going to affect municipalities. In Finnish legislation there is special state support for municipalities facing financial difficulties (valid also in other time than present crisis). This support has been distributed last time in December 2008 and those municipalities that applied the support were not actually yet affected by global crisis, but rather local difficulties of temporal nature. We will find more data from preliminary statistic accounts 2008 for municipalities in February 2009 and will receive final account statements for municipalities only in June 2009. Therefore, the official routine analysis will be made in June 2009.

NO

France

OUI – Mais uniquement, fin 2008, dans le cadre de la crise du crédit engendrée par la crise bancaire. Cette crise risquait, en effet, de priver les collectivités locales de l’accès au crédit.

OUI – Pour associer les collectivités au soutien de l’investissement et de manière générale de l’activité économique.

Thèmes concernés :

Soutien à l’investissement local (représente 73 % de l’investissement public direct en 2008)

Mesures politiques concrètes :

Association des collectivités locales à un plan  de relance de l’investissement local – soutien financier par activation d’un système de dotations financières  de  l’Etat versées par anticipation dès 2009.

Nature de ces mesures :

Financières dans le cadre d’un plan de relance de l’économie nationale auquel les collectivités locales sont associées.

Greece

YES, concrete arrangements – regulations have been made concerning the funding of Local Government Organisations from the Central Autonomous Resources

YES

Aspects considered:

Funding regulations

Concrete policy measures:

Yes

Nature of these measures:

The particular measures concern the funding of Local Government Organisations from the Central Autonomous Resources, the purpose being to increase the percentage of general, rather than earmarked, grants.

Hungary

YES, concrete arrangements- the government has convened a social conciliating forum for the common determination of the necessary measures almost at the same time as the financial crisis had burst, in which all of the local governments interest representation associations have been admitted.

The interest representation associations of public servants has formed a strike committee because of the wage-policy measures (adjournment of the “13^th month” allowance for the public servants and the cancellation of this year wage development) taken place in consequence of the financial crisis. In the course of negotiations the government and the strike committee have come to an agreement according to which the adjourned 13^th month allowance will partly be compensated.

YES

Aspects considered:

The review and reform of local governmental system relating to several aspects is on the agenda in Hungary independently from the financial crisis too. According to it there is a continuous consultation with the interest representation associations of the local governments. The reinforcing of the system of legal control over the local governments, or the reviewing of the task and responsibilities of the local governments and the town clerks are particularly on the agenda for example.

Concrete policy measures:

Yes or the discussions are under process.

Nature of these measures:

The local governments will presumably count on the aid and support of the state (on the so called “supplementary support for the local governments in disadvantageous situation not by their own fault” /this kind of support named by the abbreviation “ÖNHIKI” in Hungary/) in a greater extent than before.

That is why the budget Estimates for assuring the capability of local governments for proper functioning has been arise by 500 million forint.

As another governmental measure the government has introduced a bill to the parliament about the modification of given acts on tax and social insurance contributions for decreasing the administrative burdens at the taxation field and ameliorating the competitory situation of enterprises.

This amendment comprises modifications affecting local taxes, thereof the forming of the local governments’ incomes (e.g. the whole tax assessment base reached at an abroad business domicile can be deducted from the tax assessment base of the business tax of the entrepreneur. The proposal has also planned to modify the Act on the tax on vehicles so that the autobuses for the local and intercity public transport services will be quit of taxation.

At the moment there is no reason for other measures, but the economic recession following the financial crisis will reduce the tax-incomes of local governments, which disadvantageous effect is tried to be diminished by the government with modification of acts determining tasks for local governments and newly implemented burden-decreasing measures in acts on taxes and social insurance contributions.

Ireland

YES, concrete arrangements

Most of the issues raised are under discussion between central and local government at present in the light of emerging financial developments.

YES

Aspects considered:

The focus has been on diversifying the funding base of local authorities.

Concrete policy measures:

Yes

Nature of these measures:

A new source of income is being introduced for local authorities in 2009 – a charge on non-principal private residences.  The Commission for Taxation is also considering options for the future financing of local authorities.

Italy

YES, concrete arrangements

On 20.11.2008 the Conference of the Presidents of the Regions and Autonomous Provinces sent a document with their requests in terms of financial and policy measures to be taken.

On 12.2.2009 the national Government and the Regions and Autonomous Provinces reached an important agreement about new measures on safety valves and use of the national fund for underdeveloped areas (FAS), for a total amount of 8 million €.

NO

The financial relations among the different levels of government in Italy are regulated by law and are not to be changed by the crisis.

Luxembourg

NON

NON

Monaco

-

-

Netherlands

YES, concrete arrangements

Action for reclamation and - in the future- tightening of regulations on yet more risk containment with regard to superfluous investments.

YES

Aspects considered:

Greater promotion of treasury banking/lending at the Ministry of Finance (but probably not mandatory)

Promoting improvements in the sharing of information

Facilitating improvements in the treasury function by local and regional authorities themselves

Tightening up on the regulations for local and regional government’s investments and derivatives (in Dutch abbreviated as: ‘Ruddo’).

Concrete policy measures:

The scheme has already been prepared in draft format. The various levels of government are presently preparing/making recommendations on this.

Nature of these measures:

Tightening up investment policy by making adjustments to ‘Ruddo’ in particular, within a few months.

Norway

NO

NO

Portugal

NO

YES

Aspects considered:

Reduction of short term debts to suppliers.

Promoting reproductive public investment and stimulating the economy.

Concrete policy measures:

Yes

Nature of these measures:

Credit facilities aimed at reducing the average stated period of payment of municipalities and regularizing short term debts to suppliers (specific program designed for all the levels of government in which 40% of the loans are assured by the central State and the 60% by private financial institutions) and also simplification of public procurement in specific areas of investment (schools and renewable energies).

Romania

-

Three working groups have been set up consisting of representatives of trade unions, employers associations and structures of local authorities at the level of Ministry of Public Finance, Ministry of Economy and Ministry of Labor, Family and Social Protection.

At the same time, Government wishes to bring on board representatives of associative structures of local authorities in the Economic and Social Council which is currently composed of representatives of trade unions, employers associations and Government.

-

Aspects considered:

Concrete policy measures:

Nature of these measures:

According to the answer to question. 1, the Ministry of Administration and Interior has sent a circular to prefectures in the territory with a view to gather data on income and expenditure of local authorities in order to establish cases of financial crisis that will be the basis of the analysis.

Slovenia

NO

NO

Sweden

NO

NO

Suisse

NON

-

United Kingdom

YES, concrete arrangements

We have set up a National Economic Council at central level, and a Regional Economic Council.

Regular opportunities for partners to discuss issues/ hear about barriers to policies/ share information at a high (Ministerial) level. There are also regular discussions with the local government sector on the economic downturn.

-

A review has been undertaken of the guidance which central government publishes on local authority investments. The general view at the moment – shared by the sector – is that no fundamental changes of approach are required, and that any changes would be only to strengthen the guidance in some areas.  The general approach to the financial relationship between central and local government also continues – that local authorities are responsible for their own financial decisions, and existing levels of funding under the three-year funding settlement remain appropriate.

Consideration is being given to how central Government might help local authorities to deal with the effects of the downturn, for example, in maintaining levels of capital spending. Government is bringing forward funding spent through the Regional Development Agencies to keep key schemes going.

Aspects considered:

The review of investments is considering the process of local authority investments and the parameters for that investment (liquidity, return, security). However, as set out above, the Government’s view is that no major change on the investment framework is required.

Concrete policy measures:

No

Nature of these measures:

-

Austria

NO

NO

Belgique (Région de Bruxelles Capitale)

NON

Pas de modification, la concertation étant la base des relations entre le gouvernement régional et les communes bruxelloises.

Il est impossible de le dire à l’heure actuelle que les modifications sont possible dans l’avenir ; néanmoins, le gouvernement bruxellois accorde une grande importance à la stabilité financière des pouvoirs locaux et des actions ponctuelles ne peuvent être, dès lors, exclues, malgré la faiblesse des moyens régionaux (sous-financement des institutions régionales).

Belgium (Flemish Region)

NO

The financial crisis has not led to any changes in the autonomy of local or regional authorities.

-

Central and regional government will have to discuss the structural rising of the costs related to employees (pensions, etc.).

Belgique (Région de Wallonie)

NON, l’autonomie des collectivités locales est reconnue dans la Constitution.

NON

Bulgaria

-

-

Estonia

NO

It is planned to impose restrictions for investments to the financial instruments in legal acts.

NO

Finland

NO

It is not likely that any developments in the near future, such as an imminent economic crisis, will have an effect on autonomy of local or regional authorities in Finland.

More likely there might be some adjustment changes in State-municipality relationship. There might be some extra stimulating money for municipalities in some cases. But the Government should prepare such program first.

NO

Actually there are quite many reform developments in the co-operation and administrative sectors in various levels of government.

It is most likely that these reforms will keep going as planned in spite of crisis. It can be also possible that the crisis might have an accelerating impact on some reforms, for example by need to deepen co-operation and save resources.

France

Très difficile à mesurer à ce jour

Très difficile à mesurer à ce jour

Greece

NO

NO

Hungary

NO

The autonomy of the local governments is a fundamental constitutional right; the restriction of it has never been and will not be the aim of the government.

-

There was not a direct effect on the co-operational level, but the solidarity has increased, and the civil partnership too: a reform-alliance has formed by the representatives of the economic and science field who continuously monitoring the situation and make suggestions for the government for the taken measures. The cooperation with representation associations of the local governments is continuous and tight.

Ireland

NO

YES

More discussion and collaboration in respect of the pressures identified.

Italy

NO

The autonomy of regional and local authorities in Italy is regulated by law and is not to be changed.

NO

The federalist reform which has been taking place in Italy for several years has not been affected by the crisis and there is no reason to expect that it will be.

Luxembourg

 NON

NON

Monaco

-

-

Netherlands

-

The objective of the adjustments is to make transactions in investments more resistant to further turmoil in the financial markets and the consequences arising from this.

A more general financial crisis has begun in the interim. Arrangements are also soon to be made between the various levels of government in this regard concerning stimulation of the economy. This could also involve some stretching of EMU standards and government support. Government funding for small and medium-sized businesses might also be possible to some degree if banks are or become more reserved about extending commercial credit.

-

There have already been administrative consultations, these have, if anything, temporarily and as necessary, become more intensive.

Measures are indeed being taken with a view to a repetition so as to be better prepared for this. And, in the interim, there are soon to be discussions between the various levels of government concerning stimulation of the economy, as previously mentioned.

Norway

NO

NO

Portugal

NO

The measures pointed above (reduction of short term debts to suppliers, promoting reproductive public investment and stimulating the economy) are aimed at stimulating the economy. This could also involve some stretching of European Monetary Union criteria (the Growth and Stability Pact for Portugal has been revised in last January to accommodate for this).

Local authorities have the autonomy to develop local programs of assistance to businesses and/or families.

NO

Romania

-

The Government has as priority the strengthening of local autonomy and in particular the financial autonomy of local authorities via the 2009-2012 Plan of Government. Nonetheless, another priority contained in the 2009-2012 Plan of Government is aimed at accelerating the process of financial and administrative decentralization which will focus on the transfer of financial resources to ensure full funding duties, powers and public power.

-

There is close cooperation between the Government and the associative structures of local authorities to identify measures against the financial crisis which might affect governmental structures and local authorities.

Slovenia

-

We do not expect that financial crisis will have  influence on autonomy  of local authorities  in the country. Government action to overcome the crisis is focused on financial and tax instruments.

-

Due to the fact that the crisis has influence on all aspects of economic life including revenues of the state and municipalities we estimate that in the future more intensive dialog and cooperation between the state and local authorities will take place.

Sweden

NO

NO

Suisse

NON

NON; on pourrait toutefois imaginer que les conséquences de la crise amènent des communes à devoir fusionner, voir les cantons à repenser leur structure.

United Kingdom

NO

The existing level of devolution is considered to be appropriate for the current situation.

The level of autonomy is likely to remain unchanged. Consideration is being given to how central government can help local authorities deal with the impact of the recession in their areas (eg worklessness) and on their own finances (eg loss of revenues from things such as planning fees, car parking charges).

-

There have already been administrative consultations, these have, temporarily and as necessary, become more intensive.