Again about financial crisis and insolvency of administrative-territorial units Cover Image
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Din nou despre criza financiară şi insolvenţa unităţilor administrativ-teritoriale
Again about financial crisis and insolvency of administrative-territorial units

Author(s): Cristina Oneţ
Subject(s): Law, Constitution, Jurisprudence
Published by: Universul Juridic
Keywords: financial decentralization; financial crisis; administrative territorial units’ insolvency.

Summary/Abstract: In this paper we intend to resume and expand an old debate concerning the financial autonomy of administrative territorial units, as well as the one regarding the risks that it involves. Thus, after a brief analysis of the European systems of financial decentralization, the paper turns on how this is regulated at a constitutional level and implicitly how it is desired to be (at least in theory) the decentralization of administrative territorial units compared to how it is actually done, both on how it is regulated and, more precisely, in practice . From this point of view, this analysis continues with detailing the levels on which the fiscal decentralization is achieved, namely at budgetary level, overall, but also looking to the two components, the budgetary revenues level (or tax level) and the budgetary costs level. Last but not least, the paper aims to examine the most important consequences of the financial autonomy of administrative territorial units. The worst situation refers to the case where they would face, for various reasons, financial difficulties of such gravity as to produce a series of budgetary imbalances, as they are regulated by the Law no. 273/2006 on local public finances. This normative act contains extensive regulations regarding the financial crisis, and the insolvency of administrative territorial units. The critics given to the above legislation refer to both form and substantive aspects. Thus, we have shown that private law terminology such as insolvency is not only unfortunate, but even inappropriate in relation to the risks and confusions that can cause. It is surprising that the legislature, rather than review these errors, just retouches some aspects of content, seeming not to see and not to understand the dangers that itself causes. If we refer to the fact that, in the private law area, as a result of insolvency proceedings, the legal person may even cease their existence, it is enough to understand the dangers that the Romanian legislator assumed too easily. Finally, the paper contains a number of substantive observations regarding the administrative territorial units’ insolvency proceedings, such as involving the bankruptcy judge in this procedure, a matter which we consider a form of involvement of justice in the administration activity of the public law subjects.

  • Issue Year: 2013
  • Issue No: 01
  • Page Range: 196-208
  • Page Count: 13
  • Language: Romanian
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