Debt outstanding to central budget of Romania’s local authorities rose 3.6 pct in Jan-Feb to RON 195 million. See the most indebted rural communes

The amount of debt outstanding overdue for more than 30 days of local authorities to the central budget in Romania rose 3.6 percent at the end of February compared with December 2017, to RON 195 million (EUR 41.8 million), but there are huge differences between regions, Ministry of Finance data show.

At the end of 2017, the debt outstanding of Romanian local authorities reached RON 188.3 million.

The level of indebtedness of local authorities is highest in six out of 42 counties of Romania: Valcea (RON 30 million), Suceava (RON 17.9 million), Constanta (RON 17 million), Caras-Severin (RON 14.8 million), Timis (RON 11.8 million) and Vaslui (RON 11.1 million), with 53 percent of total debt outstanding overdue for more than 30 days.

The highest level of debt is recorded in large municipalities like Suceava (RON 10.3 million), Bucharest – District 6 (RON 8.4 million), Mangalia (RON 6.6 million) and Timisoara (RON 6.2 million).

But some rural communes also post large amounts of debt: Prundeni, Valcea county (RON 9.9 million), Dumbraveni – Suceava county (RON 5.6 million), 1 Decembrie – Ilfov county (RON 5.4 million) and Milcoiu – Valcea county (RON 4 million).

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In Prundeni, a rural commune with 4,128 inhabitants according to official data, each inhabitant owes RON 2,400 (EUR 516) to the state, while in Milcoiu each of its 1,228 inhabitants owes RON 3,225 (EUR 694).

Many small rural communes in Romania relies heavily on central government for funding, due to the lack of local businesses and tax payers.

Experts say Romania need to restructure the local administrative system, merging the poor communes into larger ones, in order to create sustainable local authorities.