Debt Financing in Local Self-governments in Poland

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Debt Financing in Local Self-governments in Poland

Journal Title: Krytyka Prawa. Niezależne studia nad prawem - Year 2016, Vol 8, Issue 4

Abstract

The purpose of this article is to present forms of financing investments and refinancing debt used by local government units in Poland. The catalogue of instruments that allow to cover the deficit or to finance a particular type of investment is relatively broad. Financial independence, however, is limited by the provisions of the Act of 27 August 2009 on Public Finance, which determines the nominal value of the debt, purpose and form of financial commitment. The study indicates that before every financial decision a local government unit must perform prior analysis of individual debt ratio, including the ability to repay obligations and the impact on its operational budget. The author emphasizes that the choice of the financing instrument for each case must be properly planned in the budget and in the multiannual financial plan. It is also necessary to conduct a thorough analysis on the appropriateness of this instrument. The study indicates that the Polish local governments most often use loans (incurred mostly in banks), and some of them also borrow capital by issuing municipal bonds.<br/><br/>

Authors and Affiliations

Patrycja Zawadzka

Keywords

jednostki samorządu terytorialnego dług publiczny finansowanie zwrotne instrumenty zaciągania długu local government units public debt debt financing instruments

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EP ID EP210533
DOI 10.7206/kp.2080-1084.137
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