Wpływ dotacji z funduszy europejskich na wzrost zadłużenia jednostek samorządu terytorialnego – studium przypadku
Impact of Subsidies From European Funds on the Increase of Indebtedness of Local Self-government Units – Case Study

Summary/Abstract: Purpose – The article aims to assess the impact of subsidies received by local governments from the European funds on the level and structure of their debt. In the analysis there were used financial data of the five most indebted in 2015 cities with county rights, i.e. Walbrzych, Torun, Lodz, Lublin and Wroclaw. The period of analysis covered years 2005–2015. The study erected following hypotheses: 1) The use of EU funds was the significant reason for the increase of debt of the most indebted self government units. 2) To finance the own contribution of projects co-financed by the European funds, local governments use primarily the loans. Purpose – The article aims to assess the impact of subsidies received by local governments from the European funds on the level and structure of their debt. In the analysis there were used financial data of the five most indebted in 2015 cities with county rights, i.e. Walbrzych, Torun, Lodz, Lublin and Wroclaw. The period of analysis covered years 2005–2015. The study erected following hypotheses: 1) The use of EU funds was the significant reason for the increase of debt of the most indebted self government units. 2) To finance the own contribution of projects co-financed by the European funds, local governments use primarily the loans. Design/methodology/approach – The study was based on an analysis of reports on budget implementation of individual cities, analysis of reports on activities of regional chambers of accounting and implementation of budget by local government units, as well as literature studies. Findings – On the basis of the research, the research hypotheses should be validated. The willingness of the self-governments to finance the investment projects or the development of human capital significantly influenced the increase of the indebtedness of the analyzed cities. Grants from the European funds, in most cases, do not cover the total investment costs as they are complementary to the contribution of the entity carrying out the project. In the case of self-governments with insufficient levels of income and budget deficits, coverage of own contribution means the need to obtain repayable financing in the form of loans or issuing municipal bonds, however, these are loans that dominate in the structure of revenues and liabilities. Originality/value – The study addresses the important and current problem of local government debt in the context of the possibility of using European co-financing for projects contributing to regional development, also important for the local community. On the one hand, the EU subsidies are an important source of financing for investment, but on the other they can contribute to over-indebtedness of local governments, as a result of the need to cover own contributions and ineligible costs, and later to maintain some investments.

• Details
• Contents