Thursday, July 18, 2024

Municipalities, 470 in crisis. South and small cities, the risk of default is increasing

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In the south and in small towns there is a red alert on municipal accounts. The effects of the pandemic present a catastrophic picture. There are 470 centers in a state of crisis: 257 in a state of near bankruptcy and 213 in a state of failure. This is a number equal to 6% of the total Italian municipalities. The alarm is triggered by one Research conducted by the National Institution of Accountantswhich highlights how the regions of southern Italy are suffering more than others and how this trend is increasing after the Covid crisis.

Municipalities are struggling to collect

But what are the reasons behind these numbers? “One of the factors that provoke financial crises – write the Foundation’s researchers – is the inability to collect and thus ensure that the Foundation has the resources necessary to ensure the sustainability of expenditures without generating a deficit.” The numbers make this clear, if we take into account the relationship between collection rates and centers in difficulty: the processing carried out on 2022 data highlights that in areas where local revenue collection is difficult, there is a rise in disruptions. The highest peaks were recorded in Sicily (32%), Calabria (24%) and Campania (22%).

Increased turbulence

Then, in an attempt to analyze the period 2012-2024, the cases of five entities that declared bankruptcy approximately ten years ago appear (a much longer period than the period stipulated by law, as the research indicates).
However, there is an increase in disruptions between 2018-2023 with a peak in 2019 (35), a slight decrease in the biennium 2020-2021 due to exceptional Covid measures and a recovery in 2023 (39).

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Municipalities with a population of less than 5,000 suffer

As expected, it is the small centers that suffer above all: almost 45% of cases concern entities with a population of less than 5,000 (of which 24% represent entities with a population of less than 2,000), while 55% Of them, they fall in the range of 5,000 to 99,999 people. More than 100 thousand inhabitants, the only provincial capital is Catania.

Pre-disaster for 12 municipalities with a population of more than 100 thousand inhabitants together with Naples

A very similar dynamic occurs to the pre-collapse institutions: 53% of them have a population of less than 5,000 and almost half of them are concentrated in the South, while 46% of them are grouped into strata with a population between 5,000 and 100,000, also in the South. In this case, 44% are concentrated in the south, and only 2% of the entities are placed in the demographic strata with a population of more than 100 thousand inhabitants, namely the capitals of provinces located mainly in the south (Alessandria, Andria, Avellino, Brindisi, Imperia, Lecce ). , Messina, Naples, Palermo, Pescara, Potenza, Rieti). As for the number of procedures in the north (12%), it is concentrated in municipalities with a population of less than 5 thousand people.

Karen Hines
Karen Hines
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