Abstract
Fiscal consolidation in Greek and German local governments differs for many reasons. While some German local governments experienced a long period of austerity, driven by economic decline and federal and state measures, the global financial crisis and ‘troika’ programme caused the need for harsh austerity measures in Greece. In addition, there is a different institutional context for local governments in both states, accompanied by different revenue autonomy and state influence. Therefore, local options in Greece were limited, and local governments had to focus on spending cuts, whereas German local governments largely relied on increasing tax rates. The one commonality is in the field of regulation, when both states strengthened fiscal rules and supervision and established a bailout programme. However, intense monitoring, the implementation of fiscal rules and the ‘top-down’ actions of supervisory bodies in Greece fundamentally exceed German practice. Finally, fiscal consolidation in Greece was much more difficult and went hand in hand with minor local discretion.
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Notes
- 1.
The REPOS research project (Reformability of Political Systems in Times of Crisis) was financed in 2014–2015 by the German Federal Ministry for Education and Research and the Greek Ministry of Education, Research and Religious Affairs as part of the Bilateral R&D Cooperation in social science between Germany and Greece and extended by the German Federal Ministry for Education and Research for 2016.
- 2.
The ‘Fiscal Consolidation Plan’ (or ‘Special Economic Recovery Program’/Ειδικό Πρόγραμμα Εξυγίανσης) should not be confused with the ‘Financial Assistance Account of Local Government’ (Λογαριασμός Οικονομικής Ενίσχυσης Ο.Τ.Α.). The former is a ‘programme’; the latter is an ‘account’. Moreover, the ‘Fiscal Consolidation Plan’ was established by the Ministry of Interior, whereas the ‘Financial Assistance Account of Local Government’ was established by the Consignment Deposits and Loans Fund.
- 3.
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Kolliniati, MA., Stolzenberg, P., Hlepas, NK. (2021). Fiscal Consolidation in German and Greek Local Governments: Reform Attempts, Supervision and Local Measures. In: Geissler, R., Hammerschmid, G., Raffer, C. (eds) Local Public Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-67466-3_15
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