THE CURRENT AND FUTURE PERSPECTIVES OF INDEBTEDNESS OF THE MUNICIPALITIES

Abstract

The economic and financial crisis had a deep impact on all countries of the world, among them, Hungary, which was hit harder than expected, as is reflected by the budget plans of 2009. The soaring unemployment rate, recession at a record high, and the lack of revenues had a shocking effect on the government, leading the Hungarian state indebtedness from around 50% in the first decade of the 2000’s to over 80% in 2010, approaching the disastrous level of 90% (Reinhart –Rogoff, 2010), in which municipalities have had an increasing share. The aim of this study is to present the background of the indebtedness of municipalities at the peak of the crisis; our objective is to reflect upon its causes, which were proven right by the national data in 2010. Furthermore, we would also like to demonstrate the composition of municipalities possessing external sources and those wanting to draw in external sources in the light of a nation-wide study

Keywords

• local governments, public debt, the effects of the sub-prime crisis

References

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