Update: 2009-05-31

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Download the report on the perception of the local financial autonomy in Europe

The expenses of local governments represent in Europe 11 % of the European GDP. Their part in the GDP of every country varies strongly according to countries between 2,2 % of the GDP in Greece and more than 30 % of the GDP in Denmark.

We can distinguish several types of country, according to the part of the local expenses in the GDP:

This part varies according to the competence of local governments (role for example of the sanitary and social competence in Sweden and in Denmark, of the payment for the teachers), themselves variables according to the structure of the concerned State, that they are decentralized unitarian States or not, or still Unions. This part of the local spendings(expenses) is in a general way in increase. Furthermore, the spendings(expenses) of local governments are important if we compare them with the totality of the public spending. They represent 24 % of the public spending of functioning and more of 2/3 of the civil public investments.

The financing of the competence of local governments bases in every country on a rather complex system of taxations, subsidies and loans. This one is indeed the fruit of the numerous reforms which succeeded one another, following the example of what took place in France since the implementation of "four old women". These systems are confronted with the stake in their modernization today. This stake is coupled with a more and more strong questioning of the actors on the financial autonomy of their communities. Confronted with the increase of the competence and especially the increase of the social demand of intervention, the local governments in Europe are double restricted in their action by the legal constraints (not possibility of action except the strictly defined competence) and by the financial constraints (incapacity of financial means at arrangement). This leads an intensification of the questioning around the financial autonomy, the questioning which does not amount to the problem of the fiscal autonomy (especially for the small communities) and which is coupled with an interrogation on the equality between territories and adjustment. Finally, the question of the realization of texts governing the relations between the State and the local governments makes more and more strong.

In delà of this convergence of stakes, we can note a certain convergence of the systems of financing of local governments in Europe, but also certain points of difference. We so note the almost universal use of local taxes, and especially land tax in all the European countries, as mode of financing of local governments. The system of the subsidies is also very wide-spread, quite as the loan, which strongly diffused. However, we can note differences, according to countries, notably according to the degree of frame by the State of the modes of financing of local governments or freedom of management of these resources. To compare these models does not aim at building THE ideal model of financing of local governments because anyway, every system of financing of local governments can be only unique, because fruit of the history of the country. But it allows to open horizons on possible, and to enlighten the national debates, often calcified by years of reflection without reforms.

Every country will be the object of a monograph which presents first of all a synthesis of the history, the territorial structure and the weight of the local expenses of every country, then the lightings on the permanent and additional financial means of local governments, and finally some elements on the perception of the financial autonomy in every country.

1. Germany
2. England
3. Belgium
4. Spain
5. France
6. Hungary
   
   
7. Glossary