The European Committee of the Regions and the OECD, in a survey, highlight the lack of financial means affecting sub-national governments in the EU.
Of the 300 representatives of regional, intermediate and local authorities from the 24 EU Member States who took part in the survey, 86% expect this to have a negative impact on their spending.
Especially as regions and cities are hit by what the report calls “a dangerous scissor effect”. On the one hand, their spending has soared as a result of the health crisis, with increases in particular for social services (+65%), social benefits (+59%) and support for SMEs and the self-employed.
On the other hand, they expect their income to fall by as much as 90%, especially in terms of tax revenues. User fees are another source of income heavily affected by the crisis.
In response to the lack of financial resources, 24% of the respondents at the time of the survey were considering taking out new loans to be able to manage the crisis. 13% of respondents had applied for additional EU funding.
