Economics at your fingertips  

The Debt Consolidation of Hungarian Local Governments

Csaba Lentner ()
Additional contact information
Csaba Lentner: National University of Public Service

Public Finance Quarterly, 2014, vol. 59, issue 3, 310-325

Abstract: The total debt of Hungarian local governments accumulated during the 2002–2008 period was consolidated in full by the government between 2011 and 2014. Most of the debt assumed by the central budget was denominated in foreign currency, which involved high exchange risk and, therefore, financial instability for both the central and the local subsystems of public finances. According to some economists, the bailout of local governments by the state is another manifestation of the soft budget limit, showing that the Hungarian market economy is unable to break with the bad culture of centrally planned economy. The present study – building on primary research – presents the process that led to the indebtedness of local governments, as well as the theoretical and practical background of consolidation. The author believes it is unwarranted to enforce a hard budget limit for the local governments at any price.

Keywords: debt consolidation; local governments; soft and hard budget limit; transition to market economy; new systemic approach to state finances (search for similar items in EconPapers)
JEL-codes: E62 E69 H12 H70 P41 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) ... lentnercs-2014-3.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Public Finance Quarterly is currently edited by Erzsebet Nemeth

More articles in Public Finance Quarterly from State Audit Office of Hungary
Bibliographic data for series maintained by Pal Peter Kolozsi ().

Page updated 2018-06-23
Handle: RePEc:pfq:journl:v:59:y:2014:i:3:p:310-325