In this article you will find information about debt consolidation lead, debt free, debt international

Debt consolidation lead

The financial instability created by previous governments inevitably pushed the current government into a stabilising and restructur ing role. The debts of county local govern ments were assumed by the state in 2011, fol lowed by the decision on the comprehensive settlement of the debt portfolios of town local governments in 2012 and 2013. The mainte nance of institutions performing public func tions in towns and villages (schools, certain specialised social institutions, hospitals and outpatient healthcare institutions) were also transferred to the state’s scope of authority or liability.

The bailout of town local governments is quite common in the international arena as well.

The enforcement of soft budget limits is, therefore, a widespread global phenom enon.

Debt free

In these cases, the soft budget limit means that on the basis of past experience, local governments (and the banks financing them) trust that the state will save them any way. Those who believe that the soft budget limit, that is, state consolidation, is wrong argue that the government should not bail out economic entities that are lossmaking – whether they are market players or entities belonging to public finances – because it will not force them to observe the rules of respon sible financial management. However, as far as the indebtedness of the Hungarian local government sector is concerned, it is impor tant to stress that neither the centrally planned system, nor the neoliberal macroeconomic policy enabled local governments and market players to take a course that ensures sustain able development and modernise their infra structure.

Debt international

The new government in 2010 had to face nonviable local governments, which was the result of the bad macroeconomic pol icy pursued in the past few decades. In most cases, state authorities meant to supervise and regulate the activities of local governments rather than the local governments themselves should be held responsible for the financial problems that have emerged. The lack of ef fective state regulation and supervision, the poor fiscal policy that was forced to introduce decentralisation as well as the basic neoliberal philosophy which gave too much freedom to local governments, but at the same time used strong restrictions on resources, along with irresponsible budgetary practice, should be held responsible for these problems in the first place. However, leaving local governments to their fate would have resulted in even more se rious problems in the national economy, lead ing to the failure of the performance of local public services, socioeconomic conflicts and ultimately – if they escalate – total financial collapse of public finances. Therefore, the bail out using taxpayer money entails lower social costs than letting the local government system “sink” and leaving it in a nonviable state. Put ting the operation of local governments on a sustainable course, after they have been freed from their debts and their range of functions reduced, and keeping them on this course is the responsibility of a government that pursues an economic policy which supports active su pervisory and regulatory functions.